The Solo 401 k limits are not just the only important details you need to learn and understand about the Individual k retirement plan. Before you establish the Solo k and shell out cash for your retirement policy, make sure you have an informed decision to begin with. With reputable plan providers, you get viable resources such as the 401 k calculator. Along with the Solo 401 k limits, you will also learn about the different contribution electives as well as your contribution deadline.
About the Solo 401 k Limits
One of the reasons why the Participant Only retirement plan is gaining popularity and approval is because of its high maximum contribution Solo 401 k limits. According to the Individual 401 k experts, the maximum contribution limit of the 401 k retirement policy is in fact 10 times higher than Traditional IRA retirement plans. Qualified participants choose between employee salary deferral and profit sharing contribution. The Solo 401 k limits for salary deferral as of 2015 is $18,000. However, participants who are 50 years old and older may choose to add $6,000 catch up contribution to make their total limit up to $24,000.
The Solo 401 k limits for profit sharing on the other hand is 20% to 25% of the earned compensation, depending on the type of business the plan participant owns. As of 2015, the maximum combined Solo 401 k limits for profit sharing elective is $59,000 and up to $118,000 if the plan owner’s spouse choose to contribute to the same plan.
About Eligibility
Those who are eligible for the Self-Directed plan are self-employed individuals and owners of small businesses. A plan participant can still keep his full-time day job and still qualify as long as he can prove his self-employment activities such as consulting work. Small business owners on the other hand must not have full-time employees except for the owner and his spouse. Full-time employees basically render up to 1,000 working hours to the company per year.
You need not to wait until you are fully retired from your work to establish the self directed Solo k retirement plan. Enjoy the wealth-building investment such as the Solo 401 k real estate option if you establish a retirement plan today. The Solo 401 k limits and all the remarkable perks of the retirement plan are reasons enough to establish your plan and enjoy its wealth-building benefits.
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