Individual (Solo) 401(k)
If you don't have any employees other than your spouse or a partner, an individual 401(k) plan may be the right choice for you. An individual 401(k) has many of the same benefits as a traditional 401(k), but typically costs less and requires less administration. Substantial pre-tax salary deferrals and profit-sharing contributions make building your retirement savings faster and easier.With the 401(k) option, you can make salary deferral contributions of up to 100% of your income or $16,500 ($22,000 if over age 50). Additionally, you can make a profit sharing contribution of up to 25% of your compensation for a combine annual maximum contribution of up to $49,000 ($54,500 if over age 50)
Unlike SEP-IRA plans, loans are available with a Solo 401(k) plan. You also have flexibility in designing the vesting schedule. An annual IRS Form 5500 filing is required after plan assets exceed $250,000. Solo 401(k) plans must be established by December 31 (or by your business fiscal year-end.Contact Scott Brookes, AIF® for more information.
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