When a 401(k) or SEP is not enough, a Defined Benefit Plans has a much higher potential contribution limit. The Defined Benefit Plan limit varies on a number of factors, including the business owner's age and earned income. An actuarial calculation can determine how much you can contribute to a Defined Benefit Plan.
* Highly Compensated Employees are determined using the prior year compensation. For example, an employee is generally Highly Compensated in 2022 if their 2021 compensation exceeds $130,000. Employees also may be Highly Compensated based on business ownership or attribution of business ownership.