What Is Solo 401(k)?
This retirement account is specifically designed for self-employed workers, freelancers, and independent contractors. It offers you an opportunity to legally mitigate taxes and save for retirement while enjoying many of the benefits and features of traditional 401(k) plans. With generous contribution limits, a solo 401(k) allows you to self-direct your account and make solid contributions to your retirement.
Eligibility and Contribution Limits
According to the Internal Revenue Service regulations, you are eligible for a solo 401(k) plan if you have no employees. There are no age or income restrictions to be able to open an account. If you are planning to go for this option, the maximum account you can contribute is $58,000. For individuals aged 50 and older, an additional $6,500 catch-up contribution is optional.
How It Can Help You
A solo 401(k) allows you to choose a plan with the tax advantage that works best for you. Depending on your preferences, you can pick between traditional pre-tax and Roth format. In traditional 401(k), contributions are made pre-tax that reduces the taxable income for the year.
Helping You Understand 401(k) and Other Employer-Sponsored Plans
At ANEW 401k TPA, we are committed to guiding you as you navigate your retirement journey. Our team of highly skilled and experienced consultants will provide you with insights into different types of employer-sponsored retirement plans.