Cash Balance Plan

Cash Balance Plan

A Cash Balance Plan or a Definite Benefit plan is a type of retirement plan that allows you to significantly reduce your taxes while you fund your own retirement. 

  • This plan provides an annuity benefit that is typically a percentage of compensation. 

  • As participants in the Plan work longer and their pay increases, their Defined Benefit grows. 

  • Upon termination, the final benefit is calculated and the participant is offered a lifetime annuity payable at the Plan’s retirement age or a single sum payout that is actuarially equivalent to the monthly payment stream. 

  • In almost all cases, the single sum payout is chosen.

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