Defined Benefit Plans Quick Links
- 412(i)
A 412(i) plan is a type of defined benefit retirement plan. They are designed to create a "defined" amount of money by the time you reach retirement age. The amount you contribute to the plan each year depends on the progress toward that specific amount. - Traditional Defined Benefits
Under the traditional defined benefit pension plan, an employer promises to pay their employees a specific benefit for life beginning at retirement. The benefit is calculated in advance using a formula based on age, earnings, and years of service.
Financial Services Retirement Planning Defined Benefit Plans
Defined Benefit Plans
A defined benefit plan is a specific type of plan whereby the benefit is defined in advance. The two most common forms of defined benefit plans are flat benefits and unit benefits.
Small businesses are excellent candidates for defined benefit plans. For aging business owners who had little chance to save for retirement, the defined benefit plan is an excellent way to catch up for lost time.
Because the defined benefit plan promises a specific benefit, that benefit must be funded over the available time to retirement. For older participants with fewer years until retirement, this means that larger contributions must be made into the plan. As a qualified plan, these larger contributions are tax deductible to the business owner.
Dugan & Lopatka Financial Services, LLC104 E. Roosevelt Rd., Wheaton, Illinois 60187Phone: (630) 665-0914Fax: (630) 665-5030
DUGAN & LOPATKA FINANCIAL SERVICES IS NOT AN AFFILIATE COMPANY OF LPL FINANCIAL. SECURITIES AND ADVISORY SERVICES OFFERED THROUGH LPL FINANCIAL, A REGISTERED INVESTMENT ADVISOR, MEMBER FINRA/SIPC.
