If you are a business owner, two concerns hit most of us pretty hard. How can I save the most I can on taxes today, and how can I have as much money as possible for retirement? If part of your goal is to delay taxes for the future, then there is a program available today that is taking the industry by storm. Cash Balance Plans.

A recent favorable IRS ruling has generated some buzz on cash-balance retirement plans, and their popularity is going to increase for business-owning clients and other highly paid professionals.

These plans allow highly compensated participants to accelerate tax-deferred savings at a much higher rate than is possible with more common 401(k) plans, Simple Plans, and IRAs.

While most defined-contribution plans (like 401(k)s), can help clients shelter compensation from taxes, the plans must follow federal limits for participants’ annual pretax contributions. Participants in cash-balance plans, which have defined benefits, need not adhere to any government-set maximums for their annual pretax contributions. Instead, maximum pretax contributions are calculated for each participant based on age and earnings, and according to a preset targeted return on the plan’s assets. Some cases can allow clients to shelter $200,000 + per year for the owners.

Other benefits can be no risk returns and the employers, and in most cases walking away with most of the plan assets. In many properly designed cases 90%+ of the assets end up with the employer. Employees still receive a benefit as well, but the intention is to maximize employer benefits while reducing tax exposure.

The end result is less taxes today and a substantial boost in retirement assets. To see if these plans may work for you, consider letting a CBC representative evaluate if this strategy would benefit you and your business.