The Individual k retirement plan is undoubtedly one of the most attractive investments especially for small business owners and self-employed. This retirement account is not like any other pension plans or IRA plans available today. There are numerous benefits you can get out of a Solo 401 k plan. It is a remarkable option if you want to safeguard your retirement money and watch it grow through wealth-building activities and investments.
The Individual k Retirement Plan Qualifications
In order to have a retirement plan that works, you must first comply with the eligibility qualifications of the self-directed 401 k. Here are two major requirements needed to establish the retirement account:
- Self-Employment. You must have proof that you are self-employed. Self-employed persons such as consultants, independent contractors, physicians, real estate agents, and the likes are qualified for the plan.
- Small Business. You must own small business without any full time employees. The business owner and his/her spouse are the only exemptions to the rule.
Why Set Up a Solo 401k Plan?
If you are qualified for the retirement plan 401 k, then you can enjoy the following benefits:
- Checkbook Control. This feature of the Individual k retirement plan offers convenience and hassle-free access of your retirement savings. Plan owners could have easy control of their assets and make investments using their retirement funds as easy as signing a check. There are no custodian consents necessary and no custodial fees and charges incurred.
- Investment Choices. Plan owners have flexible and several options where they could invest their money. Some of the most lucrative and highly recommended investments where you can use your retirement savings include real estate. Options such as commercial buildings, rental homes, tax liens, tax deeds, raw land, and foreclosure properties are great wealth-building sources.
- Roth Sub-Account. If plan owners opted for a Roth sub account rollover, contributions to the retirement plan can be made without any tax obligations and income restriction. Plan holders are allowed to make after-tax contribution which is also much bigger compared to IRA.
- High Maximum Contribution. The annual maximum contribution for the retirement plan is $59,000 as profit-sharing for participants more than 50 years old. This amount is almost ten times higher than IRA contributions.
The Individual k retirement plan is the key to securing your retirement and even boosting your financial growth. There are numerous upsides to setting up this retirement plan and the best time to start is now.
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