Cash Balance Pension Plan?

[Vilgan]

Has anyone set one of these up? Can they share experiences with how much it cost to set up, what the reporting/admin on it is like, etc? It seems like a potential way to shelter more money pre-tax, but having trouble finding any blog posts on the subject explaining the process. This would be for a small owner-only business.

Thanks!

[katsiki]

following

[Frugalman19]

I know we have one at our office, only 3 participants. I think our owner shelters close to $200k a year. I know its very expensive for him tho. He has to contribute for the other 2 as well as pay the TPA and a lawyer annually, I think he pays close to $5k a year for it. I think it really needs to be worth it to do it. You can do 401(k) with profit sharing. How much are you looking to shelter?

[Vilgan]

I know we have one at our office, only 3 participants. I think our owner shelters close to $200k a year. I know its very expensive for him tho. He has to contribute for the other 2 as well as pay the TPA and a lawyer annually, I think he pays close to $5k a year for it. I think it really needs to be worth it to do it. You can do 401(k) with profit sharing. How much are you looking to shelter?

We are already doing the 401k with profit sharing and will be sheltering 53k each there.

I would love to be able to shelter another 50k or so especially pretax which lines up with what I see here for early 30s: http://www.cashbalancedesign.com/calculators/chart_limits.html

5k sounds like a lot given that we would only be able to shelter something like 90k total and it would undoubtedly make taxes more complicated. I wonder if its cheaper if there are no employees that need to be excluded? We already have a TPA in order to enable the mega backdoor roth, so I might also address it with her when she has more bandwidth after the end of year rush recedes.