Solo 401k

    2012 Solo 401k contribution limit is $50,000 ($55,500 if age 50+ due to a "catch-up" provision).

    Tax free loans are permitted with a Solo 401k plan. Loans are permitted up to 1/2 of the total value of the Solo 401k up to a maximum of $50,000.
    Roth 401k - There is an option to make Roth 401k contributions with the salary deferral portion of the Solo 401k. Contributions into a Solo Roth
    401k are not tax deductible, but withdrawals are tax free after age 59 ½.

    Potentially greater administrative responsibilities and administrative fees compared to a SEP IRA.

    The term Solo 401k is commonly used to refer to the Individual 401k  (also known as a Self Employed 401k, Personal 401k, Uni-k and Single k).
    The SEP IRA and Solo 401k are popular because both plans have high contribution limits and have completely discretionary annual funding
    requirements. In 2012 a SEP IRA has a maximum contribution limit of $50,000 and a Solo 401k has a contribution limit of $50,000 ($55,500 if age

    A SEP IRA is easier to setup and has less administrative costs than a Solo 401k, however a Solo 401k may allow a greater contribution at the
    same income level due to the way the contribution is calculated.

    After tax Roth contributions can be made into a Solo 401k. Roth 401k contributions are not tax deductible, but are received tax free when withdrawn
    after age 59 ½.  SEP IRA contributions can only be made pre-tax and does not have a Roth option.

    Another important distinction between these self employed retirement plans is a Solo 401k has a loan provision.  IRS rules do not allow loans with a
    SEP IRA.  Solo 401k loans are permitted up to 50% of the total 401k value with a $50,000 maximum.

Individual (SOLO) 401k
Home About Us Certifications
Privacy Policy | Terms of Use | © 2012 Retirement Choices of California. All Rights Reserved.
a Hamlett Benefits Group Company