Solo 401k Plans

Solo 401k plans are rapidly becoming the self employed retirement plan of choice due to this plan’s advantages and benefits. Solo 401k plans are available to self employed individuals and to business owners with no full time W-2 employees other than a spouse.  Sole proprietorships, partnerships, subchapter S corporations, C corporations and LLCs qualify for Solo 401k plans.

Benefits of Solo 401k Plans

• Solo 401k Loans - Tax free loans are permitted with a Solo 401k plan. Loans are permitted up to 1/2 of the total value of the Solo 401k up to a maximum of $50,000. IRS rules do no allow loans with IRAs, SEP IRAs, or Keogh (Money Purchase/Profit Sharing Plans).
   
• High Solo 401k Contribution Limits  -  In 2008 contributions of up to a maximum of $46,000 or up to $51,000 if age 50+ can be made into a Solo 401k plan.
   
• Flexible Annual Contributions  - Solo 401k plan contributions can be increased or decreased or stopped on a year by year basis.
   
• Tax Deductible Contributions  - In general, contributions into Solo 401k plans are 100% tax deductible.
   
• Tax Deferred Growth  -  Contributions and investment earnings grow tax deferred.  After age 59 1/2 withdrawals can be withdrawn without penalty. Federal and state taxes if applicable will apply.
   
• Solo Roth 401k  - There is an option to make Roth 401k contributions with the salary deferral portion of the Solo 401k.  Contributions into a Solo Roth 401k  are not tax deductible, but withdrawals are tax free after age 59 ½.

Learn more about Solo 401k plans.

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Disclosures:

*  The information on this page is for informational purposes only and does not constitute, and should not be construed as, professional, legal or tax advice. To determine your individual tax situation and specific needs, please consult a professional tax advisor.

* Information contained in these sections merely highlight some benefits. There are risks involved with all investments that could include tax penalties and risk/loss of principal.