California Solo 401k
Californians love their variety, so why should their retirement plan be any different? A California Solo 401k plan is an IRS-approved retirement plan specifically for the self-employed and small business owners. It’s the ideal retirement plan for any California small business owner without full-time employees.
The plan functions under the Employment Retirement Income Security Act of 1974 or ERISA. It is established on the federal level and is regulated by the federal government.
With a California Solo 401k plan, participants can enjoy the following retirement benefits:
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High contribution limits
In 2013, Solo 401k contributions were increased. Plan participants under the age of 50 can make a maximum contribution of $51,000 with an additional $5,500 catch up contribution for those over age 50 for a total amount of $56,500.
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Roth contributions included
The plan includes a Roth sub-account where participants can opt to make Roth contributions using the salary deferral portion of the Solo 401(k). In 2013, the salary deferral contribution limit was $17,500 or $23,000 if age 50 or older.
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Borrow money without penalty
Self-employed small business owners are also able to borrow from their plan, tax and penalty-free. They can use as much as $50,000 of their retirement fund to pay off any accrued debt. The plan loan feature is the best way for small business owners to alleviate the burden of financially suffocating debt.
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Hassle free banking
Our recommended banks can easily open the accounts for your plan.
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Exempt from taxation on non-recourse financing
One of the more appealing benefits to California investors is the ability to purchase real estate with non-recourse financing tax-free in California or other states.
Because of these and many other popular features offered, the California Solo 401k plan has become the desired benefit plan among that state’s self-employed business owners.