Your 401(k) stops at $72,000.A cash balance plan doesn’t.

It is a pension plan that your own business sponsors for you. Each year the plan credits your account with a contribution and with what the plan's investments earned, and the business takes a tax deduction for the money it puts in.

A 401(k) has a flat dollar cap on what goes in. A cash balance plan is capped by what may come out at retirement, so the closer you are to retirement, the more you are allowed to contribute each year.

Yes, and most people do. Your own salary deferrals are not affected. The employer profit-sharing contribution is generally limited to 6% of your pay in years when you also fund a cash balance plan.

Your estimate shows both plans together. We don't set up Solo 401(k) plans ourselves yet, but we account for yours in every calculation.

Yes. A new plan can be adopted for 2026 up to the due date of your business's 2026 tax return, including extensions, and funded by that same date.

If you run an S or C corporation, the benefit is based on the W-2 wages you were paid during 2026. Payroll cannot be changed after December 31, so it is worth getting your estimate while you can still adjust your salary.

Each year you get a range with a minimum and a maximum. In a lean year you contribute the minimum. If the minimum itself is too much, the plan can be amended to reduce future benefits, frozen, or closed.

Timing matters: a change that lowers the benefit for a year usually has to be made early in that year. This is a real commitment, and it suits people who expect steady income for at least the next three to five years.

In a brokerage account that you open in the plan's name at Schwab or Fidelity. You are the trustee and the only person who can move money. If you connect the account, Maxed can read its value and holdings but can never move money.

When you retire or close the plan, the balance can usually be rolled into an IRA without tax.

That is your decision as trustee. It helps to know how the plan works: your account is credited with the actual return on the plan's investments, gains and losses alike. When the money is paid out, it can never be less than the total of the pay credits made to your account; if losses take it below that, the business makes up the difference.

The rules also require the plan's investments to be diversified, so a single stock or cryptocurrency is out. Many owners invest plan money more conservatively than the rest of their savings. Maxed does not give investment advice.

You are responsible for the plan, in the same way you are responsible for your tax return even when someone else prepares it. In practice it means reviewing and signing the documents and filings we prepare, filing them on time, and keeping copies.

We prepare everything the plan needs, including Form 5500-EZ once plan assets pass $250,000, and we remind you before each deadline.

Your contribution range is calculated by our software and then reviewed and certified by an independent enrolled actuary, a professional licensed by the federal government to sign pension valuations. The law requires that certification every year, and it is included in your fee.

Once an employee meets the plan's age and service requirements they generally have to be covered, and the plan falls under rules we don't support yet. Tell us before you hire. We will help you either move the plan to a provider that handles employees or close it and roll your balance into an IRA.

Yes. The IRS expects a plan to be set up with the intention of keeping it, so closing one after only a year or two without a business reason can raise questions. After a few years, or when your circumstances change, the plan can be terminated and the balance rolled over to an IRA.