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412(i) Defined Benefit Plan

Do you have a client who could benefit from making large tax deductible contributions to a retirement plan? 

The 412(i) Defined Benefit Plan is a very attractive option for business owners and professionals whose businesses have certain  characteristics.   

We can help you design and implement this plan for your clients. Please call us for a "no obligation" conference.

Unlike more sophisticated plans available to these prospects, these plans are simple and inexpensive to administer and are easy to understand.  Because these plans are fully financed through traditional life insurance and annuity products, there is no market risk associated with these plans.  This type of insurance-based plan also affords the participant protection of assets from lawsuit or bankruptcy.  This is quite often an attractive feature for doctors.  In addition, this insurance-based plan avoids the complication associated with OBRA ’87.  These plans can often be fully funded in as little as six years. 

The most attractive feature of the 412(i) plan is derived from the funding rules in the tax code.  Because this is a defined benefit funded by life insurance with low but guaranteed rates, very large amounts can be put in the plan to meet the defined benefit income goal for retirement.  Many individuals can literally put more money in the plan than they earn.  While this is rarely done, it does demonstrate the enormous tax savings potential of 412(i).

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