Solo 401k Options Self Employed Retirement Savings
Do you qualify for Solo 401k options self-employed?
Self-employed individuals are growing in number today. Millions are eschewing the traditional 9-to-5, 40 hour a week route and carving a new, creative path for themselves. Many assume that saying goodbye to employment in a larger company also means saying goodbye to having a 401k.
What are the Solo 401k options for the self-employed?
The Solo 401k is an IRS-approved 401k that has been simplified for the self-employed, small business owner. In order to qualify, you must be self-employed, with a business that is intended to generate income, and without full-time employees (besides yourself and potentially, a spouse).
Self-employment can take on many forms. Sole proprietors, LLCs, corporations are eligible as long as they represent your self-employment. And the business activity of your self-employment can vary, from consulting to real estate.
What are the advantages?
The advantages are many:
- High contribution limits
In 2013, you can contribute a maximum of $51,000 to your Solo 401k. And those age 50 and above can contribute an additional $5,500 in catchup contribution.
- Participant loan feature
You can borrow up to $50,000 or 50% of your Solo 401k funds, whichever is less, through its participant loan feature. This gives quick access to funds for the self-employed. You can use the funds for any purpose once it is in your account. And, you make the payments back to your Solo 401k. The account grows as a result of the participant loan.
- No custodian needed
The Solo 401k by Sense Financial is structured without a custodian. No custodian is needed- this eliminates custodial fees, delays, and restrictions on investments.
- Unlimited investment options
The IRS does not tell you what you can invest in, only what you can’t. This leaves a wide range of investment options. Both traditional and non-traditional assets can be part of your Solo 401k investment portfolio.
- Rollovers into the account
You can rollover almost all retirement accounts into the Solo 401k. The IRS has one exception: the Roth IRA. The Roth IRA cannot be rolled over into any 401k per IRS rules.
In conclusion, the Solo 401k is a powerful option for the self-employed to grow their retirement savings.
Related Terms:
- qualified plans
- qualified retirement plans
- qualified pension plan
- solo 401k contribution
- solo 401k limits
- solo 401k contribution limits
- solo 401k contributions