We assist small business owners with the establishment of profit-sharing and defined benefit plans, as well as combination plans that bring together both options, such as a combination 401(k) and cash balance plan.
When we work with small business owners, we provide assistance with 401(k) plans and generally recommend and provide investment management services to trustee-directed plans, rather than participant-directed plans.
In trustee-directed plans, participants’ money in the plan is co-mingled and professionally managed as a whole. The professional management of plan assets often produces better results than can be achieved by plan participants managing their own assets and choosing from the available investment options.
In our work with self-employed professionals, we specialize in the establishment and management of combination or hybrid plans. For example, a self-employed professional may be permitted to contribute to both a defined benefit plan, usually a cash balance plan, and a defined contribution plan, usually a 401(k).
In using a combination strategy, self-employed professionals may be able to build a substantial retirement nest egg in a relatively short period of time while significantly reducing their taxable income along the way.
