Planning area
Maximize your retirement. Minimize your taxes.
Defined-benefit pension plans for high-income professionals and business owners — the most powerful, and most underutilized, pre-tax wealth-building tool still available.
Up to $290K
2026 annual benefit limit (IRC §415(b))
$2.95M+
Illustrative accumulation needed to fund the maximum benefit by age 62*
100% Protected
Shielded from creditors and fully IRS-approved
Overview
Are you leaving hundreds of thousands of dollars on the table every year?
For high-income self-employed individuals, professionals, and small business owners, a Defined Benefit (DB) Pension Plan is one of the most powerful — and most underutilized — wealth-building tools available.
With the potential to contribute and deduct far more than any other retirement vehicle, a DB plan can add $1 million to $2.6 million to your retirement savings in just 5–10 years — while slashing your current tax bill.
Is it right for you?
DB plans deliver their greatest advantage to people who need to catch up on retirement savings quickly — and have the income to support larger contributions.
Pro tip
The older you are, the higher your allowable contribution — and the larger your tax deduction. If you're 50+ and serious about retirement, there may be no better plan available to you.
How it works
Predictable benefits, powerful deductions.
An enrolled actuary calculates your future projected retirement benefit each year.
A contribution amount is set to fund that benefit — fully tax deductible.
You contribute and deduct that amount, reducing your current-year taxable income substantially.
Your benefit grows tax-deferred, with no dependence on market performance.
Why DB plans stand apart
The benefits that set defined-benefit plans apart.
Unlike a 401(k) or profit-sharing plan, a defined-benefit plan focuses on the outcome — a specific, guaranteed retirement benefit — rather than the contribution.
Contribute — and deduct — far more than any other retirement plan. Under IRC §415(b), your annual benefit can be funded up to 100% of your highest 3-year average compensation, not to exceed $290,000 (2026).
Your benefit is pre-established, not subject to market swings. You know exactly what you'll receive at retirement — no guessing, no volatility risk.
Most benefits are federally insured up to an annual maximum through the Pension Benefit Guaranty Corporation (PBGC).
Assets in your DB plan are fully shielded from creditors and legal judgments — critical protection for professionals in high-liability fields.
A DB plan can coexist with other retirement plans you already have, giving you multiple tax-advantaged accounts working simultaneously.
Even with a compressed timeline or early retirement target, substantial benefits can be accrued quickly — no decades-long runway required.
Know the difference
Defined benefit vs. defined contribution.
Many business owners default to a 401(k) or profit-sharing plan without realizing they may qualify for significantly higher deductions through a DB plan.
| Defined Benefit | Defined Contribution | |
|---|---|---|
| Contribution limit | Actuarially determined; annual benefit up to $290,000 (2026) | Up to $72,000/year (2026 §415(c) limit) |
| Tax deduction | Potentially massive — age-based | Moderate |
| Retirement benefit | Guaranteed, pre-set formula | Depends on investment performance |
| Ideal candidate | Older, high-income owners catching up | Younger owners or those with fluctuating income |
| Market risk | None — benefit is fixed | Full — tied to portfolio returns |
| Annual contribution | Generally required | Flexible / optional |
| Creditor protection | Fully protected | Varies |
Bonus option
Want the security of a defined benefit with the simplicity of an individual account? A cash balance plan may be the answer.
Cash balance plans are a hybrid: they guarantee a retirement benefit like a traditional DB plan — with federal insurance backing — but display that benefit as an individual account balance you can track in real time.
Portable. When you leave, your vested balance is portable — roll it to an IRA or a new employer's plan. Significant tax implications apply; consult your tax advisor.
Ready to put more of your money to work?
Let’s review the opportunity together.
A defined-benefit plan is one of the most strategic moves a high-income professional can make. Our team specializes in designing, implementing, and managing DB plans tailored to your income, timeline, and retirement goals.
* The $2.95M+ accumulation figure is an actuarial illustration based on IRS mortality tables and assumed earnings rates. Actual amounts will vary. Dollar limits reflect 2026 IRS thresholds under IRC §415 and are subject to annual cost-of-living adjustments. This material is for informational purposes only and does not constitute tax, legal, or investment advice.
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