Get The Advantages of SOLO(K) and Cash Balance PlanS for Your Self-Employed ClienT

With the landscape of retirement planning constantly evolving, financial advisors are constantly seeking innovative strategies to help their clients achieve their retirement goals. One such strategy that has gained significant popularity in recent years is the Solo(k) Cash Balance combination plan. This unique retirement savings vehicle combines enhanced saving opportunities with potential tax benefits. 

 

If your business owner clients with a Solo(k) are already maximizing their contributions, a cash balance plan could help make a positive impact on both retirement accumulation and tax liability by accommodating a higher yearly contribution.

A Solo(cb) is a cash balance plan designed specifically for the self-employed individuals. Because Solo(cb) is a type of defined benefit plan, it offers access to contribution limits which may not otherwise be accessible in another retirement plan, such as a Solo 401(k), SEP or SIMPLE IRA. A self-employed individual’s ability to start a Solo(cb) plan is driven by two key requirements: business type and income. 

Eligible businesses include:
» An unincorporated business that employs only the business owner and spouse
» A partnership that employs only partners or partners and their spouses
» Corporations (or an LLC taxed as a corporation) that employ only shareholders and their spouses

A cash balance plan may be the right fit if your client:

  • Already maximizes Solo(k) plan contributions at $70,000 
  • Can comfortably contribute more than $100,000 a year, including current savings
  • Has a consistent business profit pattern and available surplus

                   LOCATE YOUR DESIGNATED SALES CONSULTANT BY REGION

Discovery >

We help identify the needs and gather data to develop the right solution.

Solution >

We assist in developing the client presentation and recommendation.

Implementation

Once the plan is adopted, together, we implement it and provide plan services.

Financial professional's use only. Provided for discussion purposes only and in no way represents legal or tax advice. Plans discussed above may not be appropriate in all cases. For advice regarding specific circumstances, the services of an appropriate legal or tax advisor should be sought.

NOTE: Individual results will vary based on plan design, census data, earnings history, actuarial calculations, and governing regulations. Because cash balance plan is a type of a defined benefit plan, minimum funding rules apply. Failure to meet minimum funding requirements leads to excise tax until funding requirements are met. The figures quoted are statutory maximums based on compensation as illustrated; lower compensation will result in lower contributions. IRS regulations limit the combined contribution to certain plans. The illustration provided is for informational and educational purposes. It is not intended to provide, and should not be construed as ERISA, tax, investment, legal or financial advice or guidance.

Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59½, may be subject to an additional 10% IRS tax penalty.

Affiliated Entities
Cetera® Retirement Plan Specialists may provide third-party administrative services (TPA) to clients of financial professionals who are affiliated with its family of broker-dealers and registered investment advisers. Cetera Retirement Plan Specialists is part of Cetera Financial Group.® Cetera Retirement Plan Specialists and its related entities operate independently and there is no requirement for retirement plan clients of Cetera Financial Group firms to engage with Cetera Retirement Plan Specialists.

About Cetera Financial Group®
Cetera Financial Group” refers to the network of independent retail firms encompassing, among others, Cetera Advisors LLC, Cetera Advisor Networks LLC, Cetera Investment Services LLC (marketed as Cetera Financial Institutions or Cetera Investors), Cetera Financial Specialists LLC. All firms are members FINRA/SIPC. Located at 655 W. Broadway, 11th Floor, San Diego, CA 92101.

Individuals affiliated with Cetera firms are either Registered Representatives who offer only brokerage services and receive transaction-based compensation (commissions), Investment Adviser Representatives who offer only investment advisory services and receive fees based on assets, or both Registered Representatives and Investment Adviser Representatives, who can offer both types of services.