401k and Cash Balance Plans

Key Takeaways:

• The CARES Act allows business owners to receive up to a $5,000 tax credit for the next three years to offset administrative costs of setting up a 401(k) plan.
• Requiring auto enrollment for employees in a 401(k) plan can result in a $1,500 tax credit for the business owner in the first year.
• Cash balance plans allow business owners to contribute a significant amount of money towards retirement, potentially several hundred thousand dollars per year.
• Cash balance plans require a five-year commitment and annual contributions, even in years with poor cash flow.

Chapters:

| **Timestamp** | **Summary** |
| ------------- | ----------- |
| 0:00:07 | Introduction and disclaimer |
| 0:00:38 | Discussion on tax planning |
| 0:02:20 | Benefits of 401K plans for business owners and employees |
| 0:03:41 | Tax credits available for setting up a 401K plan |
| 0:04:21 | Additional tax deductions with profit sharing component |
| 0:04:52 | Exploring cash balance plans for higher contributions |
| 0:06:11 | Considerations for implementing a cash balance plan |
| 0:06:54 | Using defined benefit plans for lifestyle businesses |
| 0:08:19 | Layering different retirement plans for maximum benefits |
| 0:09:54 | Contact information for further discussion on tax planning |