The max contribution Solo 401 k is absolutely much higher in comparison to the traditional IRA. There are numerous retirement plans out there but only a few such as the Self-Directed 401 k offers remarkable benefits for plan owners. Retirement investment is a great way to financially save up and prepare for the future. However, retirement investors must also be more careful when it comes to choosing their plan providers and the kind of plan they invest on. For instance, a Fidelity Solo 401k plan follows a different format which does not include Checkbook Control features of the Owner-Only 401 k.
Understanding the Max Contribution Solo 401 k
The bigger the contribution, the more investment options you can choose from. This is quite true when it comes to investing with the Individual k retirement plan. The updated max contribution Solo 401 k rule for the year 2015 states that plan participants are allowed to contribute an amount of up to $18,000 in salary deferrals in a yearly basis. Moreover, plan owners have the luxury to choose between a Roth after-tax account and a regular tax-deferred account.
The max contribution Solo 401 k limits also allow profit sharing contribution in sole proprietorship or single member LLC and corporation option. For single member LLC or sole proprietorship options, the 2015 Solo 401 k contribution is up to 20% of the business owner’s compensation. Corporation contribution, on the other hand, is up to 25% of the compensation the business makes per annum.
The Solo k Contribution Limit in Detail
For the salary deferral contribution, the Self-Directed k plan allows up to $18,000 per year. However, for plan holders who are over 50 years old, a catch-up contribution of $6,000 is allowed, making his total yearly contribution up to $24,000. The combined total max contribution Solo 401 k for profit sharing option is up to $53,000 without the catch-up value. Participants over 50 years old could make a maximum of $59,000 for their profit sharing contribution limit. If the business owner’s spouse makes the same max contribution Solo 401 k, both could contribute a total of $118,000 to the Owner-Only 401 k retirement plan.
Saving for your golden years starts right here, right now. The Solo k retirement plan gives you tremendous ways to put your hard-earned money in productive investments with high ROI. The max contribution Solo 401 k makes huge savings for wealth-building.
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