Cash Balance Plan Contribution Limits

Funding a $290,000-per-year lifetime benefit takes a large pool of assets at retirement. The actuary spreads the cost over your remaining working years, so fewer remaining years means larger annual funding. A 40-year-old and a 60-year-old funding the same maximum benefit will have very different annual contributions, and both are within the rules.

Maximum-funded owner contributions commonly run roughly $100,000–$150,000 in the 40s, $150,000–$300,000 in the 50s, and higher still approaching retirement age, before adding the 401(k) and profit-sharing stack. Your specific number depends on compensation, the plan's assumptions, and any past service; the calculator models it from your inputs.

Three statutory numbers frame every design: the 415(b) annual benefit cap ($290,000 for 2026), the 401(a)(17) compensation cap ($360,000), and, for the paired 401(k), the 415(c) total-additions cap ($72,000) and the deferral inside it; age-based catch-ups sit on top of that cap rather than within it. The full verified table above carries every 2026 figure, with the prior year for comparison and the IRS source linked.

The actuary's range has a ceiling as well as a floor. IRC 404 sets the maximum the business may deduct for the year; for a defined benefit plan it is generally the amount that funds the plan to its full target plus a cushion, computed on the plan's assumptions. Contribute more than that and the excess is not lost; it is simply not deductible this year, and IRC 4972 imposes a 10% excise tax on nondeductible contributions for each year they remain in the plan undeducted.

The nondeductible amount carries forward and can be deducted in a later year to the extent that year's limit has room, which usually clears it within a year or two; the excise tax applies to the balance until it is absorbed. Exceptions exist, including for the amount needed to satisfy the minimum funding requirement and, in combined designs, for certain 401(k)-side contributions, and the actuary tracks them. This is why a well-run plan funds inside the certified range rather than at a round number: the range is built so the maximum is deductible and the minimum is sufficient.

Two habits keep the numbers useful. First, the compensation cap binds high earners, since pay above $360,000 adds nothing to plan math, which is why W-2 planning and plan design travel together. Second, the limits adjust most years for cost of living, so a design built to the ceiling should be revisited annually, which is part of what plan administration is for. We update this page when the IRS publishes each year's adjustments.