A 412(i) or employer sponsored, tax qualified plan, is either a defined contribution or defined benefit plan. 412(i) plans are funded with life insurance and annuity contracts. There’s no limit on contributions to a 412(i) plan, provided it covers the minimum insurance annuity premiums. One advantage of the 412(i) plan: you can make significantly larger annual contributions than under other retirement plans. This, of course, adds protection. Still, a 412(i) plan isn’t for everyone. However, we do recommend it for older self-employed or professionals who earn above $250,000 a year; have few employees; and want significant tax, as well as lawsuit protection benefits.
