Investment Advice for Realtors: What is a Solo 401k Plan?

Retirement is like a long vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money.”

~ Jonathan Clements

The best retirement is the one in which you don’t have to think about your finances. Saving for retirement is not a choice but a necessity that one should not ignore. For a majority of small business owners, investing for retirement is not a priority as they consider themselves capable enough to work at an elderly age. Real estate professionals fall under the same category and they prefer owning rental properties to funding their retirement. There is nothing wrong with this strategy except the lack of a cover for unforeseen financial troubles. Solo 401k is a retirement plan that fits perfectly under such circumstances. What is a Solo 401k plan?

Retirement Plans for Small Business

Solo 401k is a retirement solution that offers captivating investment opportunities to small business owners and self-employed individuals. The majority of real estate professionals are self employed. This plan allows them to invest in real estate along with other investment options.

What are the key features of Solo 401k retirement plan?

One of the most interesting features of Solo 401k plan is the ability to choose different types of investment options including real estate, precious metals, tax liens, tax deeds, and other similar investment opportunities. It allows realtors to include real estate in their portfolio unlike other retirement plans.

The majority of the real estate professionals avoid traditional IRA because of its lower contribution limits. Solo 401k has overcome this barrier by offering annual contributions of up to $53,000 in 2015 along with catch-up contributions of $6,000 for individuals who are above 50 years of age. Higher contribution limits allow them to grab different types of investment opportunities.

Real estate professionals need investments that offer liquidity and financial support. Solo 401k has a provision to offer participants loan. Under this, a plan participant can borrow up to 50% of the account balance to a maximum limit of $50,000. Further, you can use these funds as per your requirements without answering to your custodian or any other authority. In short, if you are contributing towards your retirement plan, then you can rely on it under financially challenging circumstances.

It only takes a couple of hours to open a Solo 401k retirement account and even lesser in its management. There are no annual filing obligations for retirement accounts holding less than $250,000 in assets.

  • Solo 401k for self employed
  • Solo 401k for business owners
  • Solo 401k for sole proprietor
  • Self directed 401k
  • how to open a Solo 401k
  • solo 401k for consultant