The Cash Balance Tour: The Most Profitable Cut You’ll Ever Make
When you’re competing at the highest level—whether it’s on the PGA Tour, LIV Golf, or the DP World Tour—your focus is on performance, travel, and maintaining your competitive edge. Then the tax bill arrives. Double bogey.
For professional golfers with high and often fluctuating earnings, Cash Balance Plans can be one of the most powerful tools to accelerate retirement savings, reduce taxes, and create additional income for the future.
What Is a Cash Balance Plan?
Think of a Cash Balance Plan as a hybrid between a traditional pension and a 401(k):
Like a pension, it promises a defined benefit at retirement (e.g., “$X per year for life” or “$X lump sum”).
Like a 401(k), your account balance grows with annual contributions and interest credits.
The key difference? Contribution limits are much higher than traditional retirement plans—meaning you can potentially move hundreds of thousands of pre-tax dollars out of your taxable income each year.
Why It’s a Perfect Fit for Tour Professionals
Professional golf income can be unpredictable. You might have multiple years at the Tour Championship or Race to Dubai, then a year fighting to maintain status. Minimizing taxes in your peak years is highly valuable—but so is protecting cash flow during leaner seasons. That’s why the flexibility and high contribution limits of a Cash Balance Plan are so appealing.
1. Massive Tax Deferral
For top earners in the highest federal tax bracket—plus state and jock taxes—the ability to contribute an extra $100K (or more) to a tax-deferred account can create six-figure annual tax savings.
2. Accelerated Retirement Savings
Because you can contribute far more than the $23,500 401(k) cap, you can build a retirement war chest quickly—especially valuable in a career that may peak in your 30s or 40s.
3. More Predictable Future Income
The “defined benefit” structure provides greater certainty about retirement income than relying solely on market performance.
4. Customizable for Your Career Timeline
If you expect a 10–15 year window of high earnings, you can front-load contributions while your income is strongest.
Final Thought
The career cycle of a professional golfer often features a cluster of extremely high-earning years that taper into the late 30s or early 40s. While every player’s approach to life after competitive golf is unique, the ability to keep more of what you earn is universally appealing.
When the tournament schedule slows, strategies like Roth conversions can help shift tax-deferred dollars into tax-free dollars at lower rates than the taxes you saved during your peak years.
It’s like winning a FedEx Cup bonus every year—only it’s tax-deductible and guaranteed.
