Spectrum Resource Center

Advice, Articles, Events, Insights, News, Newsletters, Opinions, Press Releases, Updates, and More from Spectrum.


Maximizing a Business Owner’s Retirement Benefit

Maximizing a Business Owner’s Retirement Benefit

It's a common story - business owners put everything into their businesses for years before being in a financial position to put real money away for retirement. Once you're ready to really get going, we can suggest a number of retirement plan designs and individual plan features that can help you reach your goals. Depending on your situation, here's a quick snapshot of some of the most popular:

First, a 401(k) plan with a Safe Harbor feature can be a great vehicle. With this plan, you can make significant contributions as long as the rank and file are guaranteed a meaningful base contribution. The safe harbor is a free pass on the testing that is otherwise required to demonstrate adequate coverage and fairness.

For some business owners, an Age Weighted plan design can be advantageous because, as its name implies, it takes the age of employees into consideration when calculating annual contributions. This can be especially helpful if owners are older and your workforce is relatively younger as the contribution calculations favor those closer to retirement.

A traditional Defined Benefit plan can also work to your advantage as it's meant to guarantee a promised benefit at retirement and is calculated to contribute to fund that liability. DB plans permit much higher annual contributions than 401(k) type plans, but it's important to note that annual contributions to fund their results are mandatory, not discretionary.

A Cash Balance plan is something of a hybrid. It's has the mandatory provisions of a Defined Benefit plan, but provides an accumulated balance like a Defined Contribution plan - rather than a promised benefit at retirement. It, too, allows you to save much more than is possible under a 401(k) or Profit Sharing plan.

And one more popular idea is the pairing of a 401(k) with a Cash Balance plan. This provides the opportunity for rank and file employees to participate while giving you a more generous savings path.

And don't forget, the IRS provides all employees over the age of 50 the opportunity to make what are called catch up contributions. This might be the best named featured ever as it truly means that you can catch up for years when you were building your business or raising a family and weren't able to put away enough for retirement. Catch up contributions raise the annual deferral limit for older savers.

We have many tools in our arsenal and you can count on us to work with you to create a custom approach to help you optimize your path to long-term financial success.

blog comments powered by Disqus


professional plan design practice 401k defined benefit pension loan participant loan investing margin spectrum open golf pano cancer event tournament philanthropy retirement readiness fiduciary rule tax cuts newsletter cybersecurity plan termination merger acquisition gender retirement gap lifetime income investment returns women men fees dol documents compliance press release bi cloud technology azure plan intelligence docusign microsoft myretirement limits irs retirement plan contribution plan faq participant questions payroll finwell plan education financial wellness employees financial stress education entreprenuers business accumulation startup wealth asset allocation investments fis innovation ira technology charity award 40th anniversary celebration impact fiduciary tax deduction participant outcomes uncashed checks distributions automation recordkeeping case study millennials soc-1 portal psoy cash balance plan sponsor of the year abg mfa enrollment escalation video automatic qdia qualified default investment alternative roth debt credit saving safe harbor nondiscrimination adp acp top-heavy plan sponsor 3(16) erisa hardship withdrawal audit bond owner bundled unbundled forfeiture forfeit vested vesting consulting employer connect reports student loans db/dc providers services guide erisawrap welfare benefit plan fundraiser document cancer reserach retirement confidence unvested vested account balance wrap spd wrap document plan document welfare benefits employee benefits healthcare wrap market volatility participant behavior socially responsible esg plan participation spectrumopen spd wrapspd spectrumplatform qaca participation restate restatement erisa bond fidelity bond bonding goals plan amendment secure act SECURE secure act of 2019 legislation secureact secureact2019 secureactof2019 election 2020 coronavirus covid-19 business continuity cares act cares covid19 relief retirement plan relief the cares act covid the secure act workforce demographics older employees engagement SECURE 2.0 Act Retirement Plan Legislation 401(k) cbpp defined contribution

ERISA Workplace Retirement Plan Limits

The federal government annually publishes updated qualified retirement plan limits, which impact the contributions, benefit accruals, and compliance of ERISA covered qualified retirement plans. The below tables summarize the most significant changes in recent history.


Keep up on our evolving products, services, solutions, and technology through our Newsletters.

About Our Firm

Spectrum is a B2B consulting firm, which enables American Workers to plan and save towards a dignified financial future by designing, administering, and operating the ranges of retirement and financial plans for U.S. employers.

Get in touch

  • Address: 6402 19th Street, Tacoma, WA 98466, USA

  • Phone: +1 (253) 565-2100

  • Email: Contact Us Form