Every plan participant knows the importance of complying with the Maximum Contribution for the Solo 401k. It is definitely important not to miss your annual contribution if you want to enjoy the features of this lucrative retirement account. What then are the benefits of establishing the Individual 401 k plan in the first place?
Wide Range of Investment Options
The Owner-Only 401k retirement plan allows plan owners to explore numerous fields of investment for wealth-building. You can basically use your retirement savings to invest in real estate such as purchasing rental buildings and properties, mortgage notes, tax deeds and tax liens, multi-layer units, and so much more. Other investment options include precious metals, foreign currencies, stocks and bonds.
Checkbook Control
One of the most attractive features of the self-directed retirement account 401k is that it frees you from custodian fees and consent when accessing your retirement funds. Plan participants are the very trustee of their account. Hence, you can access and use your retirement money as easy as writing a check. There are also no heaps of paperwork and documentation required for such privilege.
High Maximum Contribution for the Solo 401k
Unlike SEP accounts, the self-employed retirement plan offers high contribution limit particularly ten times higher than the IRA retirement accounts. For instance, participants who are younger than 50 years are allowed to make $18,000 salary deferral contributions. Plan owners who are 50 years old and older are entitled to an additional $6,000 catch up contribution making their total employee deferral contribution of $24,000. With the profit sharing, the maximum contribution limit for age-qualified participants is up to $59,000.
Loan Options
Just like other retirement plans, participants are allowed to borrow money from their account. The allowed loanable amount is up to $50,000 or 50 percent of the account’s overall value, whichever is less. The Maximum Contribution for the Solo 401k offers easy and flexible repayment wherein borrowers can repay the borrowed amount within 5 years or sooner. Moreover, they can repay at least quarterly and with the most reasonable interest rate of Prime Rate + 1%. Borrowers can use the loaned amount to pay bills, student loans and others.
The remarkable features of the self-directed 401 k retirement plan are designed to help plan owners maximize their retirement plan and see their money grow. Complying with the Maximum Contribution for the Solo 401k is one of the first steps to unlock the full potentials of the Individual k.
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