Hi Everyone,
Was reading a recent post about cash benefit plans and was confused about certain aspects of such plans. Here is some info about me:
1. 37 years old
2. Current pretax salary: 400k; Assuming i'll make partner in 1.5 years, salary will be between 600-700k
3. max out my 401k (i do a roth); max out profit sharing (35k); max out HSA; max out backdoor Roth
4. this year started contributing 50k pretax to a cash benefit plan (i think the max i could contribute was around 80k)
I was always under the impression that one could have a max of 2.8 million in these CBP plans, but recently after reading a post, I was confused because it stated that if a person is younger, he/she can only have approximately 1.5 million (depending on age). Obviously this is a big difference. I would like to know which one is it and if it's the lower amount, what is the reasoning for it.
Also, our group plans on closing the current plan in about 5 years at which time participants can roll their balances into 401ks. A new cbp will then be set up for each participant. Does the lifetime limit of 2.8 million (or whatever that amount is) apply to each individual plan or is it specific to each individual person, assuming the participant is with the same employer? in other words each time my group opens up a new CBP, can each participant theoretically have 2.8 million in each new plan or is it capped at 2.8 million per person, no matter how many plans are opened.
Thank you for your help. These CBP confuse me!
Was reading a recent post about cash benefit plans and was confused about certain aspects of such plans. Here is some info about me:
1. 37 years old
2. Current pretax salary: 400k; Assuming i'll make partner in 1.5 years, salary will be between 600-700k
3. max out my 401k (i do a roth); max out profit sharing (35k); max out HSA; max out backdoor Roth
4. this year started contributing 50k pretax to a cash benefit plan (i think the max i could contribute was around 80k)
I was always under the impression that one could have a max of 2.8 million in these CBP plans, but recently after reading a post, I was confused because it stated that if a person is younger, he/she can only have approximately 1.5 million (depending on age). Obviously this is a big difference. I would like to know which one is it and if it's the lower amount, what is the reasoning for it.
Also, our group plans on closing the current plan in about 5 years at which time participants can roll their balances into 401ks. A new cbp will then be set up for each participant. Does the lifetime limit of 2.8 million (or whatever that amount is) apply to each individual plan or is it specific to each individual person, assuming the participant is with the same employer? in other words each time my group opens up a new CBP, can each participant theoretically have 2.8 million in each new plan or is it capped at 2.8 million per person, no matter how many plans are opened.
Thank you for your help. These CBP confuse me!
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