Transform Tax-Deferred Wealth Into Tax-Free Legacy
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​Multiply What You Leave Behind—While Paying Zero in Taxes
For high-net-worth business owners, physicians, and professionals with large tax-deferred retirement accounts, one of the most powerful planning opportunities is converting tax-deferred income into tax-free wealth—both for yourself and for your heirs.
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At Oakwood Summit, we design coordinated strategies using Cash Balance Plans and Roth conversions to help clients eliminate taxes on conversion income and build multi-generational, tax-free wealth—all while staying fully within the IRS code.
The Problem: The Hidden Tax in “Tax-Deferred” Accounts
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Traditional retirement accounts—like 401(k)s, profit-sharing plans, and IRAs—help you defer taxes today, but not avoid them. Eventually, every dollar withdrawn is fully taxable, and when passed to heirs, it becomes ordinary income to your beneficiaries.
Without planning, that means:
30–40% of your retirement account could be lost to taxes
Heirs could face accelerated distributions under the SECURE Act’s 10-year rule
Your lifetime of savings could fund future tax bills instead of your family’s legacy
There’s a better way.
The Advanced Strategy: Cash Balance Plan + Roth Conversion
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This strategy allows you to convert tax-deferred accounts into tax-free Roth accounts—without triggering an additional tax burden.
Here’s how it works:
Establish a Cash Balance Plan through your business.
Make large, tax-deductible contributions to the plan—often $200,000 to $400,000+ per year.
Simultaneously, convert an equivalent amount of tax-deferred retirement assets (IRA, 401(k), etc.) into a Roth IRA, which would normally create taxable income.
The deduction from the Cash Balance Plan contribution offsets the taxable income from the Roth conversion—effectively zeroing out the tax bill.
You’ve just moved funds from tax-deferred to tax-free status—without paying additional taxes.
Why This Strategy Works So Powerfully
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Eliminate Taxes on Roth Conversions
Use Cash Balance Plan deductions to completely offset the income from a Roth conversion.
Create Lifetime Tax-Free Income
Once converted, Roth assets grow and distribute tax-free—forever.
Multiply Tax-Free Wealth With Life Insurance
Fund life insurance inside the Cash Balance Plan using pre-tax business dollars to create tax-free death benefits for heirs.
Protect and Diversify Retirement Assets
Blend guaranteed income from the Cash Balance Plan with tax-free Roth growth and legacy wealth.
Control the Timing and Amount of Conversions
Our team designs a phased conversion plan that aligns with your contribution schedule, ensuring tax neutrality each year.
Example: Turning Tax-Deferred Into Tax-Free
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A business owner has:
$2 million in tax-deferred retirement accounts
$500,000 in annual business income
They establish a Cash Balance Plan contributing $300,000 annually—fully deductible to the business.
Simultaneously, they convert $300,000 from their IRA into a Roth IRA.The deduction from the Cash Balance Plan cancels out the Roth conversion’s taxable income.
The result:
No additional tax owed
$300,000 moved into tax-free Roth wealth
A $300,000 deduction that reduced taxable business income
An expanding, tax-free inheritance for their heirs
Over 5 years, that’s $1.5 million converted tax-free—plus additional tax-deferred savings in the Cash Balance Plan itself.
Build a Tax-Free Legacy That Lasts Generations
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You’ve already built your wealth. Now it’s time to make sure your family keeps it—without losing it to future taxes.
Discover how a Cash Balance Plan and Roth Conversion strategy can help you move from tax-deferred to tax-free wealth—without paying extra tax today.