The maximum Solo 401 k contribution offers higher retirement savings and better wealth-building opportunities. When it comes to using your retirement money, the Participant-Only retirement plan makes it easier and more accessible. Plan participants can check the 401 k calculator for a more accurate and reliable information regarding their maximum contribution limits. More than the maximum Solo 401 k contribution, you can also know and understand the basic difference between the profit sharing and employee salary deferral electives.
Fundamental Details about the Maximum Solo 401 k Contribution
Before you make the best Solo 401 k investment, it helps to have a comprehensive understanding about the maximum Solo 401 k contribution. Knowing your contribution limits help you adjust your finances and allocate the amount before you miss the contribution deadline. If you prefer an employee salary deferral contribution, your updated contribution limit is $18,000 if you are under 50 years old. On the other hand, the maximum Solo 401 k contribution for 50 year old plan participants or older is a total of $24,000, inclusive of the $6,000 catch up contribution.
The amount of the maximum profit sharing contribution mainly depends on the kind of business the plan participant owns. The maximum Solo 401 k contribution for single member LLC or sole proprietorship business type is 20% of the overall compensation. Corporation or multi-member LLC businesses contribute 25% of the profit or compensation of the company.
Proven Benefits and Advantages
Aside from the high contribution limit which is 10 times higher than Traditional and SEP IRA retirement plans, the Individual k also offers tons of other upsides for plan owners. Here are some of the perks you will surely enjoy on top of the maximum Solo 401 k contribution:
- Checkbook Control or easy access of retirement funds without custodian consent and paper works.
- A wide range of investment opportunities including real estate, private businesses, precious metals, stocks and bonds, and hard-money lending.
- Loan options particularly from reputable plan providers.
- Roth sub account or tax-free income generation, withdrawal, and other transactions.
- UBTI Exemption for real estate retirement investors.
Nothing beats a lucrative investment you can make from using the Solo k retirement funds. Comply with the maximum Solo 401 k contribution and you can certainly enjoy numerous other perks from the retirement plan. A lot of plan owners use the Individual 401 k plan for wealth-building with the help of their plan provider.
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