Los Angeles, the capital of entertainment industry in the US, is the home of many small business owners and independent contractors. Los Angeles Solo 401k is the solution specifically designed for this group. It is the ultimate retirement plan that can help self employed individuals to achieve financial security.
Los Angeles Solo 401k works just like any qualified retirement plan, but has its own differences. For example, Los Angles Solo 401k doesn’t follow California state laws regarding retirement plans as employee benefits. The plan is regulated by the federal government instead.
Most Los Angeles natives choose a Los Angeles Solo 401k for the following advantages:
Generous contribution limit
In 2014, a Los Angeles Solo 401k plan can receive contribution of up to $52,000 per year in salary deferral and profit sharing contributions. Plan holders of 50 years or above is allowed an additional catch-up contribution of $5,500, which brings the limit to $57,500.
After-tax Contribution allowed within a Los Angeles Solo 401k Plan
A Los Angeles Solo 401k can have a Roth Solo 401k account within the plan. Therefore, participants can choose to make salary deferral contribution in Roth or after-tax amounts. Which means, for 2014, account holders of a Los Angeles Solo 401k can put as much as $17,500 into his or her Roth account, or $23,000 if he or she is over 50 years old.
Penalty-free loan from Los Angeles Solo 401k
With the Los Angeles Solo 401k, people can borrow from their retirement savings for whatever reason. The amount is limited to $50,000 or 50% of the account value, whichever is less. There is no tax or penalty charge on this loan, so account holders can easily utilize this feature for some extra cash when in need.
Convenient banking
Small business owners can easily open a Los Angeles Solo 401k account at any bank or credit union that they prefer.
Non-recourse financing available
Investors with a Los Angeles Solo 401k can now buy real estate within or outside the city with a non-recourse loan, and without tax charges for using the loan.
For the many benefits listed above, many investors are now making the switch to Los Angeles Solo 401k plans to start investing for their future.