A Defined Benefits plan tends to be well-matched for owners of small, profitable businesses, who are closer to retirement age and would like to catch up on their savings. Generally the owner is at least fifty years old or within 10 years of retirement.

One main limitation is that you’re locked into the program once it’s started, and it requires an additional expense to maintain the plan with the IRS and the Department of Labor.

Contributions in 2016 can result in a retirement benefit of no more than 100% of the average pay during the three highest-paid income years or $210,000.