A cash balance plan is a defined benefit plan that describes your benefit as an account rather than as a monthly pension. Each year the plan adds a pay credit and an interest credit, and at retirement or when the plan ends you can take the balance as a lump sum.
The business funds the account and deducts what it puts in. There is no flat cap on contributions as in a 401(k). An enrolled actuary works out a range each year, from the minimum required contribution to the maximum deductible contribution, and the ceiling comes from what the plan may eventually pay under the 415(b) limit. The fewer years you have until retirement, the more you can put in each year.
For an owner aged 55 with ample pay and long service, the illustrative first-year maximum in 2026 is about $260,000, against $80,000 for a Solo 401(k) on its own. See the limit at every age.
When the only people covered are the owner and their spouse, the plan sits outside Title I of ERISA, which makes it simpler to run. The full explanation is in what is a cash balance plan.