Frequently Asked Questions about the Small Business Retirement 401k Savings

Small Business Retirement 401k Savings

Small Business Retirement 401k Savings

With significantly bigger Small Business Retirement 401k Savings, plan participants could have more financial edge for a better and more secured future. The 401k plans for self employed individuals offer a wide range of upsides and benefits. There are however frequently asked questions about the retirement account that must be answered.

Maximizing the Small Business Retirement 401k Savings

Here are some of the fundamental things you need to learn and pertinent questions regarding the Solo 401k retirement plan:

What are the qualifications to establish an account?

There are two important requirements to comply with in order to be eligible for the self-directed 401k account:

  1. Self-Employed – Provide proofs that you are self-employed or have activities that could qualify you in this category. Self-employed individuals are those who work as independent contracts and consultants such as physicians or real estate agents. Participants could still be full time employees of a certain company as long as they can prove their self-employment activities.
  2. Small Business Owner – Entrepreneurs and business owners are eligible to establish the Qualified 401k retirement account as long as they do not have any full time employees. The business owner and his/her spouse are the only exemptions to this rule.

What is the Individual k retirement loan option?

Plan owners are entitled to borrow from their retirement account up to $50,000 or half the total value of their retirement plan. Borrowers are obliged to repay the full amount within five years and in a rate of Prime Rate + 1%. Repayment term is at least quarterly or monthly whichever is more convenient to the plan holder.

How much is the maximum contribution limit?

The Individual 401k maximum contribution limit is ten times higher than other retirement plans in the industry. This allows plan participants to have higher Small Business Retirement 401k Savings. For salary deferral, the maximum contribution is $24,000 inclusive of the $6,000 catch up contribution for plan participants 50 years and older. For profit sharing, the annual maximum contribution limit is $59,000 inclusive of add-ons for age-qualified participants.

Can you use your retirement money?

The Checkbook Control feature of the self-directed self-employment 401k retirement plan allows easy access of the retirement funds to invest in fields such as real estate, stocks and bonds, precious metals, and so much more.

Secure your financial future. Start with a viable Small Business Retirement 401k Savings and watch it grow through lucrative investments.

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