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CASH BALANCE PLANS ALLOW CONTRIBUTIONS of UP TO $433,500 PRE-TAX

Who is an ideal candidate?

Any highly compensated individual who desires to contribute more than $61,000 ($67,500 with catch-up) to their 401(k) accounts. Contribution limits are based on the age of the business owner.


Dentists, lawyers, medical professionals, accountants, or closely held family businesses are excellent candidates. Cash Balance Plans work well for both large and small businesses.

Young Business People Discussing Over Laptop — Fishers, IN — Norwood Economics

WHAT IS A CASH BALANCE PLAN?

A Cash Balance Plan is a type of IRS-qualified retirement plan. Cash Balance Plans are known as “hybrid” plans. They're called "hybrid" plans because even though they're defined benefit plans, they allow participants to roll their money into an IRA when they leave or retire. Assets are creditor protected and portable.


Many professionals and entrepreneurs neglect their personal retirement savings while they’re building their practice or company. They often need to catch-up on years of missed savings opportunities. Adding a Cash Balance Plan allows them to rapidly accelerate savings with pre-tax contributions resulting in tens of thousands of dollars in tax savings annually.

recent blog posts

High Level of Uncertainty Surrounding Trade Policy

By Christopher Norwood • June 2, 2025
Executive Summary The S&P 500 rose 1.9% last week to finish at 5911.69 The S&P 500 rose 6%, the Dow rose 3.8% and the Nasdaq climbed nearly10% in May Could see another test of support around 5,800 this week Several longer-term negative divergences may be pointing to a tough summer Declining new highs during an advancing market is a negative Earnings estimates for 2025 and 2026 have been trending lower Earnings drive the stock market over the long run

A Trading Range Market Most Likely

By Christopher Norwood • June 2, 2025
Executive Summary The S&P 500 fell 2.6% last week to close at 5,802.82. The 20-Year Treasury auction went poorly. The yield rose above 5%. The 5% threshold has twice this year resulted in the administration adjusting its stance on tariffs. (Make that three times as Trump over the weekend gives the U.K. until July 9 th .) Longer-term inflation expectations are rising. Moody’s downgraded the U.S. to Aa1 on 16 May. The credit default swaps market sees the U.S. as a Baa1/BBB+ credit, on par with Greece. The tax cut bill will add to the deficits and debt. Long-term interest rates might well continue to rise.

Buying Companies on Sale is a Successful Strategy

By Christopher Norwood • May 19, 2025
Executive Summary The S&P 500 rose 5.3% last week to finish at 5,958.38 The Dow advanced 3.4% and the Nasdaq added 7.2% A falling VIX means investor confidence is increasing A 90-day pause in the trade war sent the S&P higher Earnings estimates are falling along with GDP growth forecasts Earnings and interest rates drive the stock market over the long run Investors are chasing performance Small business hiring plans and job openings haven’t improved Norwood Economics continues to look for good companies on sale The Stock Market