Defined Benefit Plan
A defined benefit plan tends to be well-matched for owners of small, profitable businesses, who are closer to retirement age and would like to catch up on their savings. Generally, the owner is at least fifty years old or within 10 years of retirement.
One of the main limitations is you’re locked in once it’s started, and it requires an additional expense to maintain the plan with the IRS and Department of Labor.
Contributions in 2015 cannot exceed 100% of the participant’s average compensation for his or her highest 3 consecutive calendar years, or $210,000.