# How much can a business owner actually put away?

> Plain-language guides to Cash Balance plans for financial advisors, CPAs, and business owners, with a lifetime limit calculator.

Source: https://askactuary.com/  
Author: Mike Rutkowski, FSA, EA, MSPA

A 401(k) tops out near $80,000 a year. A Cash Balance plan can take an owner's tax-deferred savings into the millions, up to a lifetime limit set by IRS Code section 415(b). This guide explains how the plan works. We also include a live calculator so you can see a potential pattern of contributions for a specific business. Our three branded design styles are noted in the guide as well, with each plan custom designed for your specific needs.

[Run the Lifetime Limit Calculator](https://askactuary.com/calculator) [Start the guide](https://askactuary.com/how-it-works)

## The lifetime cap for one owner

Owner born 1970, paid $300,000, in a new plan.

Columns show the most this owner's Cash Balance account could pay out as a lump sum in each year under 415(b). It climbs fast because the limit phases in over the first 10 years of participation.

## Who a Cash Balance plan works best for

These are the patterns we see most often. None is a hard rule; the calculator, followed by a formal proposal, will show what is possible.

### Owners in their 40s, 50s, and 60s

The older the owner, the faster the 415(b) limit allows the account to grow, so contributions can be larger.

### High, steady profits

The plan needs a contribution every year. It suits businesses that reliably earn well above what the owners spend. Our Flex Plan™ design works for businesses where this isn't the case.

### 401(k) is already maxed

Owners who hit the 401(k) limit every year and want a bigger deduction get the most from adding a Cash Balance plan.

### No employees, or a small team

Owner-only plans are simplest. With staff, the plan must also provide meaningful benefits to them, and the design determines that cost. Typically an owner will receive 90+% of the total benefits.

## Read it in order, or jump to a question

Each page takes just a few minutes to review and ends with a link to the next.

1. [How it works](https://askactuary.com/how-it-works): Pay credits, interest credits, and why an account-style plan is legally a defined benefit plan.
2. [Interest credits](https://askactuary.com/interest-credits): Fixed, Treasury-based, or actual return. How the choice affects owners and staff.
3. [The contribution range](https://askactuary.com/contribution-range): The minimum required and maximum deductible contribution, and why there is a range.
4. [Timing and changes](https://askactuary.com/contribution-timing): Deposit deadlines, quarterly contributions, plan amendments, and the expectation that the plan is permanent.
5. [Our custom designs](https://askactuary.com/custom-designs): Every plan is built around the deduction target, how stable contributions need to be, and how much flexibility the business needs. Pro, Flex, and Max designs.
6. [Lifetime limit](https://askactuary.com/415b-limit): The cap on what a Cash Balance account can pay out, and the four things that set it.
7. [Lifetime limit calculator](https://askactuary.com/calculator): Project the maximum Cash Balance lump sum an owner can accumulate under IRC 415(b), year by year for the next 10–15 years.
8. [Investments and risk](https://askactuary.com/investments): What investment results do to participants, to the owner's contributions, and to the plan at the finish line.
9. [In-service and RMDs](https://askactuary.com/distributions-while-working): In-service distributions at 59½, and required minimum distributions for 5% owners.
10. [Leaving and plan termination](https://askactuary.com/distributions-at-termination): Lump sums, annuities, rollovers, spousal consent, and what happens when the plan itself terminates.
11. [Adding employees](https://askactuary.com/nondiscrimination): Why staff must share in the plan, the main tests, and what staff typically receive.
12. [Pairing with a 401(k)](https://askactuary.com/cash-balance-and-401k): Why the combination is the standard design, and how the pieces stack up for an owner.
13. [FAQ](https://askactuary.com/faq): Short answers to the questions advisors and owners ask most.
14. [Getting started](https://askactuary.com/get-started): What we need from you, the deadlines, and what the first year looks like.
15. [Ask Mike or Max](https://askactuary.com/ask): Two ways to get an answer. Max, our AI assistant, answers instantly. Mike answers personally by email.

## Written by a practicing pension actuary

Mike Rutkowski, FSA, EA, MSPA is a Fellow of the Society of Actuaries and an Enrolled Actuary with 25 years of experience designing and certifying defined benefit and Cash Balance plans, most of them for owner-only and small businesses. Mike has extensive experience with all types and sizes of pension plans over his career, and is available to answer your questions personally.

[Talk to us about a plan →](https://askactuary.com/get-started)

---

Educational information only. Not tax, legal, or investment advice, and not an actuarial valuation.
Questions for the author: https://askactuary.com/get-started · Full guide index: https://askactuary.com/llms.txt