The Best Kept Secret for High Revenue Business Owners

Matt Butler and Colin Kelty |

Cash Balance Plans 

The Best Kept Secret for High Revenue Business Owners 


Did your company just have a significant increase in revenue?  You may want to consider exploring the options of a Cash Balance Plan.  Compared to a 401(K) or SEP IRA, with a Cash Balance Plan you can contribute more money pretax, which will reduce your current income taxes.   

 A Cash Balance Plan is a retirement savings plan that combines features of traditional pensions and 401(K) plans. Like a traditional pension, a Cash Balance Plan promises a specific benefit at retirement. This can be expressed as a lump sum or an annuity, which pays monthly income for life.  

Like a 401(K) plan, a Cash Balance Plan is funded by employee and employer contributions. The contributions are made pretax, which reduces your current income taxes.  Both the employee and employer contributions grow tax-deferred until you withdraw the money at retirement.  From there, you will pay income taxes on the money when you withdraw it. 

It is important to do holistic financial planning to determine if a Cash Balance Plan is right for your company.  A good planner will look at current contributions to 401K’s, IRA’s, or other retirement plans, your company’s current tax bracket, and will consult with a third party administrator to determine contributions limits which will help you decide if a Cash Balance Plan is the right move for you.   

Here is a scenario based on a real case, there was a company with 6 owners who typically generate $2 million per year in revenue, but for this particular year, the company had generated $4 million in revenue.  The company did not want to pay the extra taxes on this untypical increase in revenue.  Rather, they opted to stash more money away for their retirement.  After some holistic financial planning, it was determined that the owners were able to contribute $1.5 million each to a Cash Balance Plan.  The owners were able to save money on taxes and contribute a significant amount to their retirement nest egg. 

If you are thinking about starting a Cash Balance Plan for your business, talk to a financial advisor to get started.  

If you would like to know more please visit or contact: 


Colin C. Kelty 

President/Co-Founder,  Senior Financial Advisor 

AFIN Family Wealth Management 

1220 Kensington Rd, Suite 220, Oak Brook, IL 60523 

T: 630-686-1463    C: 312-505-9698 


Matt Butler 

Investment Executive  

AFIN Family Wealth Management 

One Northfield Plaza, Suite 521, Northfield, IL 60093 

T: 630-686-1463 


Securities and insurance products are provided by Cetera Investment Services LLC, member FINRA/SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Advisory services are only offered by Investment Advisor Representatives. Cetera is under separate ownership from any other named entity. For a comprehensive review of your personal situation, always consult with a tax or legal Advisor. Neither Cetera Investment Services, nor any of its representatives may give legal or tax advice. Examples are for illustrative purposes only and the return is not indicative of any actual investment.  Actual investment results may differ substantially.