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Question - when is the best time to terminate DBP now, 2019, 2020, etc? Client 52 year old, wholesale business owner where he is the sole employee. The business is setup as a sole proprietorship and he has a DBP, Solo401(k) and PSP. Client wants to retire at age 55 - July 2020. DBP is already overfunded by 2.5%, as of today 2/26//2018, for the Lump Sum @ Ret calculated for age 55. Client has not made any contributions to the DBP for 2016 and 2017 due to the anticipated overfunding. Thus is he receiving no tax benefit having the DBP other than time passing. The assets of the DBP are presently in money market account earning 1% in Vanguard Federal Money Market Fund (VMFXX) since why risk with equities when any gains results in overfunding tax. Business owner anticipates 2018 Business profit at least $130K 2019 Business profit projected at $50K 2020 Client would sell some of their premium web domain names and therefore would have a business profit Client has never reported a business loss, but could report 2 years before finally closing business. So that would be 2022 to terminate DBP, then roll over to a IRA and by then there would be no overfunding issue. Think keeping the DBP going until 2022 would allow deferring income earned in 2018 & 2019 for $61,000 each year (DBP $0, 401(k) $18,500, catch-up $6,000, PSP $36,500), 2020, 2021, 2022 the business is not expected to make much of a business profit. I feel this is the best approach but interested an anyone’s feedback. There would be no more contributions to the DBP and the business would have no income in 2021 and 2022. If we terminate the DBP now excess assets revert to the employer, they are subject to two taxes: 1. Business income tax because the excess assets have not been previously subject to taxation. 2. A non-deductible excise tax of 50% of the amount of the excess assets. The way to potentially avoid paying the excise tax is to transfer the excess assets into PSP. The excess assets will be used to make the employer allocations. Since they had been deducted, would not be able to deduct these amounts again on client’s tax returns. Client will start paying expenses for the DBP maintenance and accountant fees that would draw down some of the excessive funding. If we did terminate the DBP now the excess assets would be used for (401(k) $18,500, catch-up $6,000, PSP $36,500). The issue here client knows business income will be over $130K for 2018 and could push some business income from 2018 into 2019 so business income of $55K is possible. But there would not be enough time or business income to use up the transferred excess assets and client wants to retires from the business. Client does not see selling the business is possible and will just close down. Some of the other strategies for mitigating overfunding DBP are not applicable to client’s situation Increasing plan benefits since client is at the maximum permissible (415) benefit level Bring new participants into the plan. Client is 1 person business, single, no kids Thank you for your time reading my post and your feedback is welcomed.