A good investment of your money with the Solo 401k retirement plan starts with knowing the maximum individual 401k contribution limit and complying with the deadlines. A lot of qualified plan participants have experienced how this type of Qualified Plan could boost their money with exponential growth. There are several reasons why more and more self-employed individuals and small business owners establish a 401k account.
Top Benefits of the Owner-Only 401k
The self-employed and small company retirement plan 401k is a highly recommended option for qualified participants. There are numerous perks and advantages to enjoy if you choose to establish this type of account:
- Employee deferral and profit sharing solo 401 k has a maximum contribution ten times higher than Roth IRA or Traditional IRA.
- Investment opportunities are not limited and wide including real estate, precious metals, tax liens, tax deeds, mortgage notes and many others.
- Plan participants can loan from their retirement account. Up to $50,000 or 50% of the total value of the plan is allowed for loan options.
- Tax free transactions and growth is offered with the Roth sub account rollover.
- The Checkbook Control feature allows plan owners to make investments using their retirement money without any approval or consent from any custodian.
- Financing a real estate investment is possible using a non-recourse loan in order to avoid triggering Unrelated Business Taxable Income.
Maximum Individual 401k Contribution Limit Facts
One of the most important components of the self-directed 401k is its high maximum contribution limit. Plan owners could elect what type of contribution they wish to make. For employee deferral, the updated contribution limit as of 2015 is $18,000. This amount is applicable for participants below 50 years old. Those who are older are allowed to have an additional $6,000 for catch up contribution.
The profit sharing component of the Maximum individual 401k contribution limit allows additional 25% on top of the aforementioned contribution limit. Plan owners aged 50 years and older are allowed to contribute but not exceed $59,000 for their annual contribution. The actual contribution for salary deferral and profit-sharing must be made before or by the tax-filing deadline.
A great investment with the 401k Solo retirement account starts with knowing your maximum individual 401k contribution limit. Comply with the deadline and start making money through investments without tax restrictions.
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