01
401(k)
A familiar defined contribution foundation for employee deferrals, employer contributions, and day-to-day savings.
401(k) + Cash Balance
Combine everyday flexibility with a bigger retirement objective.
Many business owners explore a 401(k) alongside a Cash Balance Plan so the overall retirement strategy can serve both current savings habits and a more ambitious long-term target.
How the pieces can work together
One strategy, with different jobs to do.
A 401(k) can provide familiar employee savings features and flexibility. A Cash Balance Plan can create additional defined benefit capacity for owners who have the cash flow and timeline to support it.
02
Cash Balance
An additional retirement layer designed around a targeted benefit and the owner’s age, income, and funding objective.
03
Connected administration
A coordinated process that keeps plan documents, census data, testing, and communications aligned.
Questions to bring to the table
The right combination depends on the whole picture.
- How stable is your business cash flow?
- What do you already contribute to a retirement plan?
- Who is eligible for each arrangement?
- How many years do you expect to fund the plan?
- Which advisors should be part of the decision?
The two plans do not share one ceiling
In 2026 the 401(k) elective deferral is $24,500, with catch-up on top for those who qualify. Employer profit sharing sits inside the $72,000 annual-additions limit. The cash balance piece is not stacked on top of that number as a second published cap. It is a defined benefit formula, measured against the $290,000 annual benefit limit, and it has to pass coverage and nondiscrimination with the 401(k) in view. The figures are on limits. The testing idea, without pretending this page is a test, is on staff cost.
Adding a cash balance plan in December and leaving last year’s 401(k) safe harbor untouched is how combo designs get messy. Safe harbor timing, the census, and the actuary’s data request have to be one conversation. If the 401(k) is already at a bundled recordkeeper, Sterling still administers the pension and coordinates the actuary. We do not replace the recordkeeper, and we do not sign the valuation.
Let’s evaluate the combination against your actual facts.
Bring the current plan document, last year’s Form 5500 if you have one, and the census.