Retirement plan design is a good subject for scenarios, because the right plan depends on income, age, staffing, and cash flow. This category presents four hypothetical owners and shows how an advisor might think through the choices.
Each scenario is a composite hypothetical, labeled as such. No scenario describes a real owner or plan, and contribution limits are described in general terms because they are indexed and change over time. Dollar figures are assumptions for teaching and should not be read as limits or recommendations.
How to Use This Category
Owners with no employees can start with the solo 401(k) scenario. Owners of small practices who want to contribute more can read the cash balance scenario. Owners who missed a year-end deadline can read the SEP funding scenario. Owners with employees can read the defined benefit scenario, which shows why modeling employee cost is essential.
The recurring lesson is that a retirement plan is a long-term commitment. The best plan is one the business can fund consistently, not necessarily the one with the largest headline limit.
Contribution limits shown in these scenarios are assumptions. Confirm current limits and deadlines with a plan provider before making decisions.
Guides in Retirement Plan Scenarios
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These scenarios are illustrations only. Book a discovery call with AE Tax Advisors to discuss the facts of your own business or portfolio.
Book a Discovery CallEducational purposes only. This page is an illustrative educational scenario, not tax, legal, or accounting advice, and it does not describe a real client or a real result. Tax laws change and outcomes depend on individual facts, so consult a qualified professional before acting. No result is guaranteed.