Get a Defined Benefit plan and contribute as much as $300,000 pre-tax to boost your retirement savings. Send Enquiry and our pension consultants will guide you and help you set up the plan in a matter of minutes.
Retirement benefits under a defined benefit plan are calculated using the formula. Our Calculator is designed to estimate your total retirement income, including benefits you may receive that enable you to estimate your projected super balance and how long it may last in retirement.
Defined benefit contributions are generally calculated by an actuary based on the individual’s age and yearly income. However, our one-of-a-kind Defined Benefit Calculator can ease the pain for you. Use our defined benefit calculator to get an approximate estimate of your annual contributions to a defined benefit plan.
If you fall in any of the categories above, it might be worth a lot of money to use our Defined benefit calculator and find out how much you can contribute to the defined benefit plan. Our actuaries can design and administer a defined benefit plan with minimal cost when you’re ready to begin. Our DB calculator is the only one available on the Internet that can calculate complex actuarial figures in a fraction of a second and report on contributions.
If you are interested in learning more about the DB-based self-employed tax deductions, please click here.
Under IRS rules, an individual can make 100% of their compensation in retirement. For example, a self-employed individual has a business that is registered as an S-Corp. The compensation from the business is a W-2 income of $100,000 and the remaining portion is K-1 income for the business owner.
If we were to apply the IRS rule to this individual, he can earn $100,000 each year from his own defined benefit plan after retiring at an assumed retirement age of 62. The IRS then requires a defined benefit plan to estimate the lifespan of this individual. There are IRS prescribed mortality tables that are meant to be used. For example, the mortality table that is used in this case estimates that this participant will live until age 82. Without interest rates, when the person retires at age 62, he will need $2 million in his account to be able to withdraw $100,000 each year.
The mortality estimates may not play out accurately for a single individual, but this is the concept of the defined benefit plan. This individual will now have to fund for the $2 million pot which is called the lump sum at retirement.
If they’re 52 years old, they have 10 years to fund that $2 million, which basically means they have to contribute $200,000 a year.
That’s exactly how a DB calculator works, although with a lot of interest rate assumptions. There is no better example of a definite benefit plan than this one.
Contributions to a defined benefit plan are based on the age and compensation of the individual participant. To calculate your personal contribution limit, you will need to use our defined benefit plan calculator.
