Maximum contribution to 401k self employed retirement plan is way higher than the traditional IRA. If you are a self employed person running a small business without any fulltime employees, taking advantage of this Solo 401k retirement plan could help you effectively plan for retirement. The high limit of your Solo 401k contributions means that you can save more for retirement and make more investments into different assets that could diversify your own retirement portfolio.
Contribute up to the maximum contribution to 401k self employed retirement plan so that you could maximize its full potential to offer you the best retirement life possible
Being a small business owner could be difficult. Aside from the effort running your business, budgeting business expenses, providing for your household, and other important living expenses, putting funds up to the maximum contribution to 401k to guarantee a comfortable retirement could be hard to maintain especially when emergencies arise. If you will understand how important maximizing your Solo 401k is, you will be delighted to know how far this plan could bring you in retirement. Also, being compliant to the solo 401k contribution deadline is equally important.
The contribution to the Solo 401k has two parts—the salary deferral from the business owner and the profit sharing contributions based on the business’ adjusted net income. In 2014, the first part’s maximum contribution limit can reach up to $17,500 for participants below 50 years old and $23,000 for 50 years old and above. For the second part, the maximum could reach up to 25% of the net adjusted business profits. If you would plan to combine them, the total maximum contribution limit per year could reach up to $52,000 to $57,500.
If you are a holder of self directed Solo 401k, just imagine the numerous investment opportunities you can make with that kind of annual contribution. Investment choices are stable with values that are less likely to depreciate. If your business is doing well and you are capable to contribute up to the maximum limits, you can guarantee that a comfortable retirement awaits you once you decide to quit working or pass on your business to your heirs when you reach the old age.
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