Aside from the high 401 k contribution limits, the One Participant retirement plan also offers a wide array of features that appeal to contemporary retirement investors. This cost-effective approach to fast-track your retirement savings is easy to establish as long as you comply with the eligibility requirements. Take note of the different features of the Self 401 k retirement account as well as the steps to maximize the savings from the highest 401 k contribution limits.
More about the 401 k Contribution Limits
There are basically two types of contributions for the Individual 401k retirement account namely employee deferral and profit sharing contribution. The 401 k contribution limits for salary deferral option is up to $18,000 as of 2015. However, the limited contribution for participants over 50 years of age is $24,000 due to the additional $6,000 catch up contribution. The profit sharing contribution limit is 20% to 25% of the overall business compensation or profit which is limited to $53,000 per annum. With the inclusion of the $6,000 catch up contribution, the overall 401 k contribution limits for profit sharing amount to $59,000.
Spouse Solo 401 k Limits Contribution
If your spouse is part of your small business, then he/she could participate in the Self-directed k plan. The allowed contribution limit is the same as the one applied to the primary plan owner. Thus, the combined overall contribution for the couple could reach up to $118,000 for the same retirement plan. This is also the updated amount for the 401 k contribution limits for 2015.
Minimum Contribution Requirement
Plan participants are not required to contribute to the 401 k contribution limits every year. In fact, you can make contributions as little as your budget allows or even opt for a suspension of contribution for difficult years. However, make sure you have substantial contributions from time to time if you want to enjoy the different features and perks of the Solo k retirement plan.
Contribution Deadline
Profit sharing and salary deferral contributions are allowed up to the next tax-filing deadline. However, participants need to elect what type of contribution they are going to make within the year up to December 31st.
With the highest 401 k contribution limits, plan participants can see surefire growth in their retirement savings. Establish a Solo 401k retirement account now and participate in a wealth-building quest that all retirement investors should know about.
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