If you are a CPA advising high-net-worth individuals, you understand the complexities of retirement planning for clients with substantial incomes.

The ever-changing market dynamics and intricate tax regulations can make it feel like someone else is pulling the strings of your clients’ financial future.

However, there is a solution that empowers both you and your clients to regain control and accelerate their savings: the Defined Benefit Plan.

By understanding the intricacies of this retirement planning tool, you can guide your clients towards maximizing their finances for retirement, while also solidifying your position as a valuable resource in their financial journey.

The Defined Benefit Plan helps your clients take control of their financial future in six meaningful ways:

1. Flexible contribution: Ever wished you had a retirement plan that could adapt to your clients’ unique financial situations?
With a Defined Benefit Plan, they can do just that. This plan allows them to design their own contribution structure, choosing an amount that suits their specific needs. You can work with your client to establish a planned range for annual contributions, saving up to several hundred thousand each year on a pre-tax basis. It’s important to select a range that reflects their confidence in meeting future earnings while also accounting for unexpected circumstances that might arise.

2. Control over investment choices: Imagine having the ability to handpick how your clients’ retirement funds are invested. That’s precisely what a Defined Benefit Plan offers! Open architecture allows you to put your clients in charge of their investment decisions. They can choose from a wide range of investment options, including stocks, bonds, and alternatives, tailoring their portfolio to match their risk tolerance and retirement goals. With the help of a financial advisor, they can make informed decisions and ensure stability in their investments.

3. More control over tax obligations: When it comes to taxes, having more control is always a good thing.
With contributions to a Defined Benefit Plan, your clients gain greater control over their tax obligations. By strategically targeting the planned contribution range, you can help them manage their tax liabilities effectively.

And guess what? There might even be opportunities to contribute outside those ranges, resulting in larger tax write-offs and reduced overall tax burdens. Talk about a win-win!

4. Flexible contribution timing: Cash flow is a real consideration when it comes to retirement planning. Fortunately, a Defined Benefit Plan offers flexibility in contribution timing.

You can advise your clients to make no more than 50% of their contribution during the plan tax year. After that, they have until the tax filing deadline (including extensions) to make the remaining contribution.

This extended timeframe gives them the wiggle room they need to manage their cash flow efficiently while optimizing their retirement savings.

5. Combine Defined Benefit and Defined Contribution lans: Now, here’s a power move: combining a Defined Benefit Plan with a Defined Contribution Plan, such as a 401(k).

This dynamic duo can maximize retirement savings and tax benefits for your clients. During lean years of lower profitability, we can suggest prioritizing funding the Defined Benefit Plan while temporarily pausing contributions to the Defined Contribution Plan. Once profitability rebounds, they can resume contributions to both plans, giving your clients the best of both worlds and turbocharging their retirement savings.

6. Control over retirement payouts: When your clients finally reach the end of their Defined Benefit Plan, they receive a lump sum amount. And guess what? They regain full control over how to manage those retirement funds.

They can choose to roll the amount into an Individual Retirement Account (IRA), allowing them to maintain control over investments and make changes aligned with their retirement goals.

Alternatively, they can opt to annuitize the amount, securing a steady stream of income for a worry-free retirement. The choice is theirs, giving them ultimate control over their financial future.

Help your clients control their retirement savings. Download a helpful guide to see if they qualify for a Defined Benefit Plan. Or you may schedule a conversation to discuss your client’s needs: Calendly - James Alexander.