More information on Pension Protection Act

Dave, a 52 year old real estate broker.
Income: 2005, $500,000; current year, not sure.
Target retirement age: 62.
The Pension Protection Act gives Dave the flexibility to design a program that suits him perfectly. He can establish both a defined benefit plan and a 401(k). Rather than commit himself to the maximum allowable contribution— initially $164,000 -- Dave decided to contribute $130,000 annually to his defined benefit plan to allow for fluctuations in future income. He can set up a 401(k), to which he may contribute as much as $33,200 for 2006 ($220,000 * 6% + $15,000 + $5,000), but isn't obligated to make any contribution at all to it. Note: if there is an employee, Dave probably would be obligated to make a contribution to the 401(k).