Solo consultants and two-person advisory firms are good cash balance candidates when the work is durable and a poor ones when one client is the whole year. A pay credit is a promise. If revenue disappears, you still have minimum funding to discuss with the actuary, not a SEP-style choice to skip.
The defined-contribution ceiling, $72,000 in 2026, is what a SEP or solo 401(k) can approach. Many consultants are already there. The pension is the additional layer, illustrative amounts depending on age. See the comparison and who should wait.
If a spouse is the only other employee, say that plainly. It is a different plan from a firm with associates. Compensation has to be real W-2 or earned income, not a distribution you would like to reclassify in December. Publication 560 is the IRS starting point. The dated version of this conversation is the two-week briefing. When the income is real, start with last year’s return.
