What are the different options for consultancy services by a retiree having commerce, law, HRM, Banking qualifications and experience?

1. SEP IRA (NO ANNUAL ADMINISTRATION) (approximately 20% of self-employed income): $54,000 maximum contribution

2. A SIMPLE IRA requires no annual administration: $12,500 plus $3,000 “catch up” for a maximum of $15,500

3. The solo 401(k) (REQUIRES ANNUAL ADMINISTRATION) carries a contribution limit of $24,000, plus $6,000 “catch-up”, for a maximum of $18,000.

4. Other/Combo Defined Contribution Plans (401(k) is a form of Defined Contribution Plan) (REQUIRES ANNUAL ADMINISTRATION): total may not exceed $59,000 and may include 401k and profit-splitting contributions. Since the profit-sharing plan represents less than 20% of income, if you have a 401k plan ($24,000), the profit-sharing program will make up the difference ($35,000).

5. Defined Benefit/Cash Balance (REQUIRES ANNUAL ADMINISTRATION): This is the most fun and complicated option. It is estimated that the client could contribute up to $140,000 to a Cash Balance Pension Plan in 2017. A 401(k) plan may also allow him to contribute up to $24,000, for a total contribution of $164,000. He may have to use some of his current savings after taxes to pay for living expenses in this situation.
However, there is still an opportunity to protect a large portion of earnings from unnecessary taxes. Our client chose the ease of a SEP-IRA since this is his first year in business. When he sets up a monthly withdrawal, his funds will be deposited straight into his chosen investments.

Nonetheless, as his company grows, there are many ways for him to save (and defer taxes). In particular, the client is interested in how option #5 works. Professional firms often complain about Defined Contribution Plans (e.g., 401(k) and Profit-Sharing Plans) and their inability to accommodate participants once they retire.
Professionals who earn more than $59,000 per year (over the age of 50) worry that it will take away the lifestyle they have become accustomed to.
Professionals making over $250,000 or seeking a contribution to their retirement plan of more than $59,000 are ideal candidates for a Cash Balance Plan. Families and closely held businesses with a relatively consistent profit pattern. When a practice is being built, retirement savings are neglected. The elderly need to catch up on their retirement savings.
As an alternative to traditional defined benefit plans, Cash Balance Plans ensure that participants know what is going into the project and what will be paid out when they leave. Knowing that what you put in will be returned to you is a primary concern for most participants. Partners’ accounts are 100% vested in most professional firms, so vesting is generally not an issue.