The Retirement Individual 401k Plan offers innumerable perks and benefits for plan participants. However, it is still a wise choice if you first compare the Solo k retirement account with other retirement plans in the market to see if it is indeed the right choice. There are myriads of self-directed 401k companies out there. Hence, before you get overwhelmed with the choices before you, make sure you know what edge the Individual 401k has above other plans.
Why the Retirement Individual 401k Plan is better?
A wise selection of the retirement plan for you will help you enjoy the best retirement account and its numerous benefits. Check out how the self-directed 401k fares with other retirement plans in the industry:
Maximum Contribution Limits
In terms of the annual 401k retirement plan maximum contribution, it is ten times higher compared to the traditional IRA. Based on the updated yearly contribution limit of the Retirement Individual 401k Plan, salary deferral for plan participants below 50 years old is $18,000. Plan participants who are 50 years old and older are entitled to a $6,000 catch up contribution. For profit sharing contribution, participants could make up to $59,000 contribution inclusive of the catch-up add-on.
The Owner-only 401k allows plan owners to borrow up to $50,000 or half the total value of their retirement plan, whichever is less. The upside of borrowing from the retirement plan 401k is that borrowers have up to five years to repay their debt in full. Moreover, the Individual k loan option has the lowest rate which is Prime Rate + 1%. Repayment could be done at least quarterly although borrowers could also opt for a monthly repayment interval. This loan option is not permitted with any IRA or Roth IRA account.
The Solo k retirement plan also offers flexible and stress-free administration features. The plan owner is his own trustee thus there is no need to acquire custodian consent before you can access and use your retirement money for investment. This means you are also free from additional custodial fees and charges as well as heaps of paperwork. Accessing and investing your money is convenient and hassle-free just as you are merely writing a check. This feature is not offered in other retirement plans.
With the countless features of the Retirement Individual 401k Plan, you can clearly find what retirement account is the viable choice. Compare and see the difference between the Solo 401k and other plans out there.
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