For millions of people, the traditional 9 to 5 route is not something that they are getting involved with, in fact, millions of people today forego that path and work for themselves or start their own businesses. Those that are not on the grid of a larger employment firm, often times figure that they do not qualify for 401k options. The truth of the matter is that there are a lot of different people that can end up utilizing a solo 401k options self employed individuals to contribute to their retirement savings. Sure, there are some IRS rules to abide by, but there are definitely options to consider, even if not employed in the traditional 40 hour a week option that many are moving forward with.
Solo 401k Options Self Employed
Understanding the solo 401k options and rules is a good starting point to understand how this option can help with moving forward with the proper options of investment. For instance, the biggest draw of this type of account is that contribution amounts that are of high dollar amounts are allowed! The the year 2013 the limit is $51,000. Those over 50 year of age can contribute an additional $5,500. If that’s not attractive enough, tax-free loan option makes Solo 401k plan even more appealing. With that funds can be accessed up to a maximum of 50,000 dollars tax-free and penalty free!
That is a good starting point to start to think about solo 401k rules, but the deal sweetens with some of the other IRS rules that must be abided by. For one thing, taxes related to the debt that is financed as part of a larger real estate purchase are exempt. That’s right, tax free debt, only with qualified real estate purchases, which is something that is definitely attractive. A custodian will not be needed with this type of plan, which is definitely an attractive option as well.
In order to qualify for this type of retirement saving plan, you’ll need to have a business that has no full time employees. LLC, partnership, and sole proprietorship can apply and best of all, the business doesn’t even have to be profitable to begin with. For that reason alone, many are looking at retirement options that rely heavily on solo 401k accounts because the plan can end up being started and funded from other retirement accounts that already in existence.
No matter what you decide to do, make sure that you look closely at the rules and regulations that are required to establish this type of investment option for the future.
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- solo 401k contribution
- solo 401k limits
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