Schwab’s Personal Defined Benefit Plan helps self-employed and small business owners save aggressively for retirement by allowing you to make very high contributions. Just target a desired level of retirement income, and contribution amounts are adjusted each year to help you reach your goal.
What are the fees and commissions?
- Variable fees starting at $1200 for setup, plus annual service fees
- Commissions: $8.95 per online trade1; $0 per Schwab ETF online trade in your Schwab account2
There are no fees to open or maintain your account. Other fees may apply; please see Account Pricing.
What do I get with this defined benefit account?
Every Schwab account comes with one-on-one investment help and guidance. With this plan, you’ll also get:
- A customized funding proposal
- High contributions that are generally 100% tax-deductible, within IRS limits.
- A way to contribute to employee accounts
- A predetermined benefit at retirement
- Expert recordkeeping and plan service
- Retirement planning tools and resources in our IRA Center
Account fees and commissions
The following fees apply to the Schwab Personal Defined Benefit Plan:
- Variable fees based on the total number of participants, starting at $1,200 for one person
- Annual service fees based on the total number of participants, starting at $1,200 for one person
- Plan termination fees
- Trade commissions: $8.95 per online trade;1 $0 per Schwab ETF online trade in your Schwab account2
| Type of Business |
| |
One person only |
Key employees only* |
Employers with staff* |
| Starting a new Schwab Personal Defined Benefit Plan |
Setup fee: $1,200 |
Setup fee: $1,500 |
Setup fee: $1,500 + $200 per participant |
| Annual service fee: $1,200 |
Annual service fee: $1,500 |
Annual service fee: $1,500 + $200 per participant |
*A key employee is defined as an employee who is at least a 5% owner or who is a 1% owner with annual compensation of $165,000 or more. Staff are any employees who are not key employees.
Want complete pricing details?
Find out more about our fees and minimums.
Quick answers to related questions
Have questions about our Personal Defined Benefit Plan? Here are responses to some of the most common questions we hear. If you have a specific question that’s not answered here, please call us at 800-435-4000.
This plan can take up to three months to set up, so you’ll want to start early. The first step is to complete a complimentary Funding Proposal Worksheet. Schwab must receive the form by November 15 in order to establish a plan effective for the current year.
Call us at 800-435-4000 anytime for assistance.
A Personal Defined Benefit Plan may be best for professionals age 50 or over who can make annual contributions of $80,000 or more for at least five years and who have few, if any, employees. It’s for people who are looking for a quick way to increase their retirement assets, most likely highly compensated business owners, partners, and key employees who are in their peak earning years.
Contributions are generally 100% tax-deductible, within IRS limits. Earnings grow tax-deferred and are taxable when withdrawn.
A Personal Defined Benefit Plan is funded with employer contributions only and must be funded annually. Annual contribution levels are calculated based on several factors, including age, compensation, and retirement age. If you have employees, you must contribute for all eligible employees.3 Plan contributions are adjusted each year and may be amended (for additional fees) if the desired contribution level needs to be revised.
The plan must be opened by the end of your business’s fiscal year (usually December 31) in order to make contributions for that tax year. To open your plan by year-end, make sure you complete and submit your by November 15. For plans with a January 1 through December 31 plan year, contributions must be made before you file your business’s tax return for the year, but not later than September 15 of the following year.
While Personal Defined Benefit Plans have some of the highest contribution limits, there are also substantial costs and administrative requirements based on the terms of your plan, including annual actuarial calculations, required annual funding, and filing fees for IRS Form 5500.
Penalty-free distributions may be received upon retirement or termination of service. Required Minimum Distribution (RMD) withdrawals must begin by age 70½, even if you are still working. You may receive your benefit payout by rolling assets into an IRA, setting up an annuity, or receiving a lump-sum distribution. If you don’t start RMDs when required or take less than the required amount, you will face a 50% penalty on the total amount of the distribution. Withdrawals before age 59½ are subject to a 10% penalty.
There are certain circumstances in which you may be eligible to withdraw funds before age 59½ without taking a 10% penalty, including:
- Rollover of distributions to another IRA or employer plan
- Termination of employment at or after age 55
- Death or disability
- Non-reimbursed medical expenses exceeding 7.5% of adjusted gross income
- Withdrawals made in equal installments over the account holder’s life expectancy
Start here to establish your plan.
Our dedicated team of actuaries will design a detailed customized funding proposal to give you the information you need to decide if this plan is right for you. Next, Schwab will contact you to review your proposal and work with you to establish your account. Follow these instructions to receive your complimentary funding proposal. Need help? Call 800-435-4000.
| 1. Download and read the Schwab Personal Defined Benefit Plan fact sheet. |
Fact Sheet |
| 2. Download and read our Q&A Guide. |
Q&A Guide |
| 3. Download, print, and fill out the Funding Proposal Worksheet. |
Funding Proposal |
| 4. Return your completed Schwab Personal Defined Benefit Plan Funding Proposal Worksheet to Schwab. |
Schwab Personal Defined Benefit Department
Charles Schwab & Co., Inc.
P.O. Box 407
Richfield, OH 44286-0407
Fax: 330-908-4414 |
Take the next step.
Open a Personal Defined Benefit Plan today. Get detailed instructions above in Establish Your Plan.
Or call 800-435-4000 to speak with a Schwab investment professional.
See all Schwab accounts
1. Restrictions apply: The $8.95 commission does not apply to foreign stock transactions, large block trading transactions requiring special handling, or restricted stock transactions. All broker-assisted and automated phone trades are subject to service charges. See the Charles Schwab Pricing Guide for details. Employee equity compensation transactions are subject to separate commission schedules.
2. Restrictions apply: Online trades of Schwab ETFs™ are commission-free at Charles Schwab & Co., Inc. (member SIPC), while trades of third-party ETFs are subject to commissions. Broker-assisted and automated phone trades are subject to service charges. A minimum deposit of $1,000 is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for details. All ETFs are subject to management fees and expenses.
3. A key employee is defined as an employee who is at least a 5% owner or who is a 1% owner with annual compensation of $165,000 or more. Staff are any employees who are not key employees.
Investors should consider carefully information contained in the prospectus, including investment objectives, risks, charges, and expenses. You can obtain a prospectus by visiting www.schwabetfs.com. Please read the prospectus carefully before investing.
Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF.
This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends consultation with a qualified tax advisor, CPA, Financial Planner or Investment Manager.
Account must be approved and funded before trading can occur.
Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with Charles Schwab & Co., Inc.
