Traveling Doctor working LOCUMS; Deferred/Saved $101,850 in federal and state income taxes annually, by setting up a customized 401K / Pension Plan
$101,850 Taxes Saved | Solo Professional
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Unlock up to $3 Million
In Business
Tax Deductions
*Over the duration of the funding of the pension plan per person.
Tax‑optimized retirement plans delivering measurable results for small business owners.
$0
Average Annual Tax Deduction
$0
Total Client Savings
Trusted by 1,000+ small business owners
Real Results, Real Businesses
Orthodontist Practice cut taxes by 60%, with 92% of company contributions funding the owners' retirement.
60% tax reduction | Dental Practice
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Johnson Consulting Reduced Federal and State Tax Burden by 50% & Guaranteed the funding of his pension plan
50% tax reduction | Consulting Firm
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Meet Our Advisors
Alexander Tecle
18 years experience • 200+ clients
Specializes in tax-efficient retirement strategies
Charles Zimmerer
25 years experience • 250+ clients
Expert in high-net-worth retirement planning
Pension Plan vs. SEP IRA: Understanding the Real Savings
While a SEP IRA offers simplicity, a well-structured pension plan can offer significantly greater tax deductions and savings, especially for high-income professionals. It's not just about contribution limits, but the actual impact on your tax liability.
SEP IRA
Typically allows contributions up to 25% of compensation or $69,000 (2024).
Tax Savings Example: If you contribute $50,000 and are in a 35% tax bracket, your tax savings are $17,500 ($50,000 * 0.35).
Good for straightforward, lower contribution needs.
Cash Balance Pension Plan (with 401(k))
Can allow for much larger tax-deductible contributions, often exceeding $100,000, $200,000, or more, depending on age and income.
Tax Savings Example: If you contribute $150,000 and are in a 35% tax bracket, your annual tax savings are $52,500 ($150,000 * 0.35). The key is the ability to contribute much more.
Ideal for maximizing tax deductions and accelerating retirement savings significantly.
The above are simplified examples. Actual savings depend on individual circumstances, income, age, and specific plan design. Consult with a tax professional for personalized advice.
Compare Plan Options
| Plan | Max Contribution | Tax Deduction | Complexity | Admin |
|---|---|---|---|---|
| SEP-IRA | $69,000 | Up to 25% comp | Low | Minimal |
| 401(k) | $69,000 + catch‑up | Salary deferral + PS | Medium | Annual 5500 |
| Cash Balance Pension | $100k – $265k+ | Above‑the‑line | High | Actuarial req. |
Client Success Metrics
Data that speaks for itself.
Average Tax Savings by Business Type
“We never imagined saving this much until we saw the numbers.”– Dana R.
Retirement Fund Growth Trajectories
“The projections convinced me to start ASAP.”– Chris M.
Frequently Asked Questions
Why is a Cash Balance Pension Plan better for tax savings than a SEP IRA for high earners?↓
For high-income individuals, Cash Balance Plans allow for significantly larger tax-deductible contributions compared to SEP IRAs. While a SEP IRA might cap contributions around $69,000, a Cash Balance Plan can enable deductions well over $100,000, sometimes $200,000+, depending on age and income. This larger deduction directly translates to greater tax savings in your current high-income years.
How does combining a 401(k) with a Cash Balance Plan maximize my contributions?↓
Combining these plans creates a powerful synergy. You can make your usual employee salary deferrals to the 401(k) (including catch-up if eligible), your business can make a profit-sharing contribution to the 401(k), AND your business can make a large, defined benefit contribution to the Cash Balance Plan. This multi-layered approach pushes your total tax-deductible contributions much higher than either plan could achieve alone.
Is it complicated to set up and manage a Cash Balance Plan?↓
Cash Balance Plans are more complex than SEP IRAs and do require actuarial calculations and more administrative work. However, that's where MyPensionTree steps in. We handle the complexities of design, setup, and ongoing administration, so you can focus on the benefits: massive tax deductions and accelerated retirement savings.
Can I really use life insurance within my pension plan?↓
Yes, in certain types of pension plans, life insurance can be included as a plan asset. This can provide a way to use tax-deductible plan contributions to pay for life insurance premiums, offering both a death benefit and potentially tax-advantaged cash value growth within the plan. It's a specialized strategy that we can help you explore.
Expert Analysis
Data‑driven recommendations tailored to your business.
What you get in the first 30 days
- Comprehensive tax-savings analysis
- Custom retirement plan blueprint
- Implementation timeline & milestones
- One-on-one advisor session