A husband and wife near age 50 with W-2 wages at the max ($285K in 2021) have 7 employees from age 25 to 57 with wages from $10K to $51K. The owners are able to contribute $337K for their own benefits, supported by $17K for employee benefits--thus garnering 95.3% of their $354K total cost. (Their personal 401k maximum deferrals for the year are included in these numbers.)
The table below is based on:
The contribution amounts are additive for a 2-person plan.
A defined benefit plan:
Employers can generally contribute
(and, therefore, deduct) more than for
other types of plans.
Owners of small companies often find defined benefit pension plans to be the best vehicle for accumulating funds for retirement.