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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

Reversion to the Mean is a Fact of Life

By Christopher Norwood • February 10, 2025
Executive Summary The S&P finished the week at 6025.99 The S&P has been trading sideways since 11 November Volatility (VIX) has spiked five times since last fall each time falling quickly back to mid-teen levels Microsoft, Alphabet, and Amazon have contributed to the negative tone with cautious guidance The Equity Risk Premium has been falling over the last 14 years Bonds have been a horrible investment over the last three, five, and ten years The jobs market continues to show strength Consumers' inflation expectations are increasing The stock market is expensive and will return less than its long-term average over the next decade Good stock picking will be critical if investors are to earn a return close to the long run average. The equity risk premium is too low which may make Treasury bonds a better investment than stocks on a risk adjusted basis over the next decade. Treasury bonds may outperform stocks over the next decade but not necessarily over the next few years since the 10-Year could rise another 100 basis points in the short term. The Stock Market

Don't Expect Extraordinary Returns to Continue

By Christopher Norwood • February 3, 2025
Executive Summary The S&P fell 1% last week, closing Friday at 6,040.53 The index hasn’t been able to break clear of resistance The AI space took a big hit Monday Tariffs on Canada, Mexico, and China GDP grew 2.3% annually in Q4 The futures market expected the funds rate to remain at 4.25-4.50% and it did The employment cost index (ECI) for Q4 2024 rose 0.9% QoQ Pending home sales took a hit in December The stock market continues to trend higher There is a relationship between the stock market and the economy More Interesting Charts to review 

S&P Hits All Time High

By Christopher Norwood • January 27, 2025
Executive Summary The S&P hit a new high on Thursday, reaching 6,128.18. The Volatility Index (VIX) fell to a low of 14.85 The VIX has declined sharply from 27.6 The 5.4% decline from 6 December to 13 January doesn’t qualify as a correction Watch Earnings, Inflation, and Interest Rates for the stock market's near-term direction Don't miss the Charts Worth Seeing at the bottom
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