Cash Balance & Defined Benefit Plan Calculator (2026)

A cash balance or defined benefit plan can add $90,000–$330,000 of additional annual tax-deductible contributions on top of your Solo 401(k) — the exact amount depends on your age. Enter your details below to see your estimated 2026 maximum and how much federal tax you would defer.

How cash balance and defined benefit contributions are calculated

Unlike a 401(k) — capped by the IRC §415(c) annual additions limit ($72,000 in 2026) — a cash balance or defined benefit plan is governed by IRC §415(b), which limits the maximum annual benefit at retirement to $290,000 per year for 2026.¹

An enrolled actuary works backward from that $290,000 target: how much must be contributed annually, at a conservative assumed investment return (typically 4–6%), to fully fund that benefit by your retirement date? Because older owners have fewer years to accumulate the same target balance, their required — and maximum — annual contributions are much larger.

This is the mathematical reason a 60-year-old can shelter three times what a 40-year-old can: at 60, you need to fund the same $290,000/yr benefit in 5 years instead of 25.

2026 estimated maximums by age

Estimates below assume an owner-only plan designed to fund the §415(b) maximum, with income at or above $360,000 (the §401(a)(17) compensation cap).³ Actual contributions require actuarial certification.

Age	CB / DB plan approx. max	+ Solo 401(k)	Combined total	Tax saved at 37%
40	~$90,000	$72,000	~$162,000	~$59,940
45	~$115,000	$72,000	~$187,000	~$69,190
50	~$155,000	$80,000	~$235,000	~$86,950
55	~$200,000	$80,000	~$280,000	~$103,600
60	~$265,000	$83,250	~$348,250	~$128,853
65	~$330,000	$80,000	~$410,000	~$151,700

Solo 401(k) figures: $72,000 under age 50; $80,000 ages 50–59/64+; $83,250 ages 60–63 (SECURE 2.0 super catch-up per IRS Notice 2025-67). CB plan amounts are approximations from actuarial modeling — verified against Emparion 2026 CB Contribution Table and IRS §415(b) $290,000 limit.⁴

Who benefits most from a cash balance or defined benefit plan

The setup pays off when all four conditions are true:

Age 45+. At 60 you can shelter three times what a 40-year-old can — because the actuarial clock is ticking faster. Owners under 40 still benefit, but the advantage over a Solo 401(k) is smaller.
Income consistently above $300,000. You need enough net income to fund both the Solo 401(k) and the cash balance plan without straining cash flow. Minimum funding requirements are legally binding — you cannot skip a year.
Few or no employees. If you have employees over age 21 with 1+ year of service, they generally must be covered. Owner-only and owner+spouse businesses capture the most value. Adding key employees is possible but adds cost.
5+ year income horizon. Setup and annual actuary/TPA costs run $2,000–$3,500/year. A plan you maintain for 3 years produces far more tax savings than one you terminate after 18 months.

Cash balance vs. traditional defined benefit plan

Both are defined benefit plans governed by IRC §415(b) — the annual benefit limit and PBGC premium rules are identical. The key difference is presentation:

Cash balance plan: Each participant sees a hypothetical account credited annually with pay credits and a guaranteed interest rate (often 4–6%). At separation, the balance rolls to an IRA. More intuitive for employees; preferred by most modern plan administrators.
Traditional defined benefit plan: Benefit is a formula-based monthly annuity ("2% × years of service × final average salary"). No visible account balance. Slightly higher maximum contributions in some actuarial scenarios for older owners who want pure pension income.

For most private business owners, a cash balance plan is the default choice — cleaner IRA portability, more intuitive for employees, and easier to explain at a business sale. A traditional DB plan makes sense only if you specifically want annuity-form retirement income or your actuary finds a numerical edge in a specific interest-rate environment.

Break-even on setup costs

Cash balance plan setup costs roughly $1,500–$2,500 to establish plus $1,500–$2,500 per year in ongoing actuary and TPA fees. At a 37% marginal rate, you need about $8,000–$14,000 in additional tax-deferred contributions (beyond Solo 401(k)) to break even on the annual cost.

A 45-year-old adding ~$115,000 through a cash balance plan generates approximately $42,550 in annual federal tax savings from the plan alone. The break-even calculation is not close at any age above 40 with income over $250,000.

Related calculators and guides

Model your exact plan with an enrolled actuary

Contribution estimates shown here are approximations based on IRS limits and typical actuarial assumptions. An enrolled actuary working with a fee-only financial advisor who specializes in business-owner planning will determine your certified annual contribution, design the plan around your employees (if any), and coordinate it with your Solo 401(k), S-corp salary structure, and §199A QBI deduction to maximize after-tax benefit. Free match, no obligation.

IRC §415(b)(1)(A) — 2026 annual benefit limit $290,000. IRS: Defined Benefit Plan Benefit Limits. Confirmed via IRS Notice 2025-67 (October 2025).
IRC §415(c) — 2026 defined contribution annual additions limit $72,000, plus catch-up contributions per SECURE 2.0. IRS Notice 2025-67.
IRC §401(a)(17) — 2026 maximum compensation limit $360,000. IRS Notice 2025-67.
Cash balance contribution estimates by age. Emparion: 2026 Cash Balance Plan Contribution Table. Estimates verified against §415(b) $290,000 benefit limit and independent actuarial sources.

Tax values verified as of June 2026 against IRS Notice 2025-67 and IRC §415.