Hello, I am a 1099 independent contractor who has incorporated with an S-corp (one person/employee, which is myself). I've set up a solo-401k in order to make salary deferrals and employer profit-sharing (up to 25% of employee gross pay) to maximize the 55,000 contribution limit. This solo-401k is currently with Fidelity.
Recently I have learned about the cash balance plan. I thought I could just open an account at a place like Schwab, which offers a Personal Defined Benefit Plan, and be able to contribute some amount each year. I am aware this amount is based on age (currently 32 y/o). Upon some other discussions online, it sounds like the total contributions (401k salary deferral, 401k employer contribution, cash balance plan) may not exceed 31% of payroll.
If my annual 1099 income is somewhere in the range of 300-400k, would it make sense to consider adding a cash balance plan? I haven't been able to find clear-cut answers to this. For example, from this calculator (https://www.dedicated-db.com/defined-benefit-plan-calculator/) with a 350k income, I can only do 401k salary deferral of 18,500, 401k employer 6% contribution of 16,500 (not profit-sharing), and the defined benefit contribution of 33,400, which is only 68,400 so not really worth it.
My goal is to save up at least 120k annually in these accounts. With Schwab, it would cost $1500 annually for their plan. Someone suggested I find a full service provider to manage both my 401k and cash balance plan to ensure everything is in order. Would these companies run numbers for me and let me know if it's worth it or how much I would realistically be able to contribute?
Thank you.
