In today's world of increasing taxes and expenses, people are finding it more difficult to save money and prepare for the future. Right now, 401(k) and profit sharing participants can only contribute and tax defer about $50,000 per year.

However, many people are desperate for larger tax deductions and accelerated retirement savings. This presents an opportunity for advisors, who can help clients accomplish their objectives through a cash balance plan, which allows contributions of up to $250,000 per year (depending on age).

A cash balance plan qualifies for tax deferral and creditor protection under ERISA. In a cash balance plan, each participant has an account. The account grows annually in two ways: first, through contributions and second, through an interest credit, which is guaranteed rather than being dependent on the plan's investment performance. The interest credit rate is usually tied to the yield on the 30-year Treasury bond, which is about 3 percent to 4 percent.

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