Optimal PS Contribution

[austin3515]

Does anyone know of a model that will assist in determining how much a profit-sharing contribution should be optimize the tax benefit to the principals? The variables I can think of would be:

1) Marginal tax rate (i.e., how much do I save in taxes for each additional dollar contributed)

2) Valuing the impact of deferral of capital gains taxes, and the impact of taxing as ordinary income versus capital gains income. I guess you would need to know years to retirement as well?

3) Amounts allocated to employees.

So it seems to me that perhaps someone has put together a model that at least attempts to address some of these issues. Has anyone seen anything like it?

[JanetM]

Austin;

Back in my public accounting days I worked with CFA who developed one. It was so complicated and the results contained so many caveats and ranges in numbers that the clients found it confusing and about useless.

I think you should find out the clients primary goal in sponsoring a plan and go from there.