Defined Benefit Plan for Self-Employed Calculator
Calculate the maximum tax-deductible contribution to a defined benefit pension plan for your self-employment income. Compare to SEP IRA, Solo 401(k), and cash balance plans to find the most powerful retirement savings strategy.
Personal Information
Benefit Design
Plan Balance & Costs
DB Plan Tax Efficiency Score
A defined benefit plan offers meaningful advantages over a SEP IRA or Solo 401(k), though administrative costs should be weighed against the extra contribution capacity.
Annual Contribution
$82,688
Advantage Over Solo 401(k)
$13,688
Annual DB Contribution
$82,688
maximum tax-deductible amount
Annual Tax Savings
$30,595
37% combined rate
Projected Monthly Benefit
$10,000
pension income at retirement
Contribution vs SEP IRA
+$20,188
additional annual savings
DB Plan Value Growth Over Time
Projected plan balance from contributions and investment returns
Projected Retirement Income Sources
Annual income breakdown from DB plan, Social Security, and other savings
Total
$156,360
DB Plan Pension
77%$120,000/yr
Social Security (est.)
21%$33,600/yr
Other Retirement Savings
2%$2,760/yr
Annual Max Contribution: DB Plan vs Alternatives
How much more you can save with a defined benefit plan
Year-by-Year Projection
Detailed breakdown of contributions, plan growth, and tax savings
| Year | Age | Contribution | Tax Savings | Plan Balance | Total Contributed | Total Tax Saved |
|---|---|---|---|---|---|---|
| 1 | 50 | $82,688 | $30,595 | $188,188 | $82,688 | $30,595 |
| 6 | 55 | $82,688 | $30,595 | $707,443 | $496,128 | $183,570 |
| 11 | 60 | $82,688 | $30,595 | $1,386,090 | $909,568 | $336,545 |
| 12 | 61 | $82,688 | $30,595 | $1,545,012 | $992,256 | $367,140 |
Personalized Insights
Actionable recommendations based on your numbers
DB plan lets you contribute $13,688 more per year than a Solo 401(k)
Your annual DB plan contribution of $82,688 exceeds the Solo 401(k) maximum of $69,000 by $13,688. Over 12 years, this compounds into significantly more retirement wealth.
Total projected tax savings: $367,140
At a combined federal and state tax rate of 37%, your DB plan contributions will save you $30,595 per year in taxes. Over 12 years, that totals $367,140 in tax savings.
Admin costs are just 4.8% of your annual contribution
At $4,000/year for actuary and TPA fees, the overhead is very reasonable relative to your $82,688 annual contribution and $30,595 annual tax savings.
Your age is a major advantage for DB plan contributions
At age 50 with 12 years to retirement, you have a shorter funding window. This means the IRS allows much larger annual contributions to fully fund your benefit — often $100,000 to $300,000+ per year, far exceeding other plan limits.
Projected plan balance at retirement: $1,545,012
With $992,256 in total contributions and investment growth at 5.5%, your DB plan is projected to hold $1,545,012 at age 62. This funds a projected monthly pension of $10,000.
Consider pairing your DB plan with a Solo 401(k) for maximum savings
You can maintain a DB plan alongside a Solo 401(k). The combined contribution could reach $151,688 per year — the DB plan contribution plus up to $69,000 in the Solo 401(k). Consult your actuary and tax advisor to confirm compatibility.
DB plans require strict IRS compliance and ongoing commitment
You must make the required minimum contribution each year — underfunding triggers penalties. The plan requires annual actuarial certification, Form 5500 filing, and PBGC premiums may apply. Plan termination involves distributing all assets and can be complex. Work with an experienced actuary and ERISA attorney.