Use this table to determine maximum contributions (assumes $285,000 in W-2 compensation or net self-employment income after contribution).

Age 401(k) 401(k) with Profit Sharing Cash Balance Total
70 $26,000 $63,500 $292,000 $355,500
65 $26,000 $63,500 $271,000 $334,500
60 $26,000 $63,500 $264,000 $327,500
55 $26,000 $63,500 $204,000 $267,500
50 $26,000 $63,500 $158,000 $221,500
45 $19,500 $57,000 $122,000 $179,500
40 $19,500 $57,000 $95,000 $152,000
35 $19,500 $57,000 $74,000 $131,000
30 $19,500 $57,000 $55,000 $112,000

 

Guess What? There’s Still Time to Save on 2020 Taxes!

  • Plan Establishment: As a result of the SECURE Act, plan documents must be signed no later than the employer’s tax filing deadline.
  • Plan Amendments: The deadline to alter 401(k) provision is typically 12/31. However, if a Safe Harbor is being employed, the deadline may vary.
  • Funding: Employee deferrals into a plan must be made during the calendar year, whereas employer contributions may be made up through the company’s tax filing deadline, including any applicable extensions.

Note: Use this as a guide, it is not tax advice. Contact me for a consultation and to discuss your questions. We can also discuss this with your CPA or tax professional to make it easier on you.

What is a Cash Balance Plan?

A Cash Balance plan is a type of retirement plan that belongs to the same general class of plans known as “Qualified Plans.” A 401(k) is a qualified plan which means this plan “qualifies” for tax deferral and creditor protection under ERISA.

In a Cash Balance Plan each participant has their own account. The account grows annually in two ways: Contributions from employer or An interest credit – this is guaranteed rather than being dependent on the plan’s investment performance. Learn more about Cash Balance Plans.

Have questions or want to discuss your 401k?

Book a Consultation
 

Disclosures:

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

#05081429