A L I & Retirement Plan Services
This page allows you to calculate the MAXIMUM possible contribution (tax deduction) to a conventional (not a 412(i)) defined benefit pension plan, for an individual, given certain key pieces of information:
Current Age
Annual Compensation (or earned income for a sole proprietor)
Retirement Age
Years of past service with the employer
Assumed rate of salary increases
This maximum contribution calculation assumes a NEW PLAN in the first year of operation. In subsequent years, the maximum contribution may change slightly due to a number of factors, including investment performance, change in pay, and changes in legal benefit limits.
This link takes you to an Excel spreadsheet that shows allows you to enter the calculation parameters above, and provides a detailed summary of annual contributions and assets accumulated. Requires a current version of Microsoft Excel.
Click here for the Calculation Spreadsheet.
For the higher deductions available in a section 412(i) plan, see the KINDS OF PLANS button.
If you have any questions after performing your contribution estimate, read about KINDS OF PLANS or ADOPT A PLAN and, if need be, CONTACT us here at ALI Actuarial & Retirement Plan Services.