This Spring our team at EBG Systems has worked hard to bring you a brand new report that will help you analyze the principal’s account balance as it grows to retirement. We’re calling it the Smart Projection.
What is the Smart Projection?
Offering more than just a projection, you’ll be able to see what any individual’s proposed Cash Balance contribution might look like going forward, as well as some alternative options.
The Smart Projection offers 3 unique columns giving insight into your options. First the cash balance contribution – as calculated and shown in your contribution report – is projected to retirement or until the 415 maximum lump sum limit is reached. Next, a level contribution is calculated that could be continued to retirement without reduction in any funding years. Finally, a variable credit column illustrates the contributions necessary to meet the 415 maximum lump sum each year.
How do I use this report?
We’ve created a few sample cases where the Smart Projection might come in handy. Take a look at the examples below.
This is a younger owner, age 45, whose contribution credit is projected to continue for 13 funding years before the 415 lump sum is reached and the contribution must be reduced.
This 67 year old owner has a much different situation due to the greater limits and lesser funding years. As the Smart Projection shows, there is an increasing credit opportunity each year that may be considered during plan setup.
Here is a case of an owner’s spouse whose Cash Balance contribution is far greater than her compensation. The Smart Projection illustrates that this high credit lasts for just 2 funding years before it reduces and eventually the account may become over-funded.
We hope these examples illustrate the significant advantages provided by the Smart Projection. As always, we welcome feedback from our clients and would love to hear from you!
Visit the RPC Cash Balance to check out the Smart Projection – available today!