In a defined benefit plan, an actuary calculates the amount of your annual deductible contribution. The magnitude of the deduction is a function of the benefits provided.1 The deductible contribution must be consistent with the limitations of law and sufficient to fund the benefits promised to you by the plan. At retirement age, the maximum monthly retirement benefit under current law is $17,500 per month. In order to guarantee that retirement benefit is funded by your normal retirement age, you must have a total of $6,909,262 in your retirement fund by the time you retire. We noted above that defined benefit plans may contain life insurance and that the cost of this insurance is in addition to the cost of providing the monthly retirement benefit of the plan. The Benefit Focused Plan fully utilizes this ability, making it an essential part of the overall strategy because: By funding the plan death benefit with life insurance, you are able to increase your contributions to the plan with resulting income tax savings. At plan inception, it will double your contribution with only a third of the increase going to insurance premiums. A Benefit Focused Plan without a death benefit will permit a   Read more…