Who’s eligible for a Solo 401(k) plan? Watch our 1 minute (or less!) video to learn more. A Solo 401(k) can benefit you, and a spousal employee, and you can invest in crypto, real estate and more!
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IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(K) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

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1min Closer to Retirement – Solo 401(k) Self Employment

retirement planning is a crucial aspect of financial well-being. As individuals approach the golden years of their lives, having a stable source of income becomes even more important. This is why retirement plans such as the Solo 401(k) have gained popularity among self-employed individuals.

The Solo 401(k), also known as an individual 401(k) or a one-participant 401(k), is a retirement plan specifically designed for self-employed individuals or small business owners with no full-time employees other than themselves or their spouse. It offers numerous benefits and advantages that can put one minute closer to retirement.

First and foremost, the Solo 401(k) allows for high contribution limits. In 2021, individuals can contribute up to $19,500 ($26,000 for individuals over 50) as an employee and an additional 25% of their compensation as an employer. This means that individuals can potentially contribute a significant amount each year, helping them save more for their retirement compared to other retirement plans.

Additionally, the Solo 401(k) offers an opportunity for individuals to diversify their investments. With a wide range of options available including stocks, bonds, mutual funds, and real estate, individuals can tailor their investment strategy according to their risk tolerance and long-term goals. This flexibility allows for potential growth and wealth accumulation over time.

Furthermore, the Solo 401(k) allows for pre-tax contributions, meaning individuals can contribute to the plan with pre-tax dollars, which can reduce their taxable income for the year. This can result in potential tax savings and immediate benefits for individuals, making it an attractive option for those looking to maximize their retirement savings.

Another advantage of the Solo 401(k) is that it offers a loan provision. Individuals can borrow up to 50% of their account balance, or $50,000, whichever is less. This can provide financial flexibility during emergencies or unexpected financial hardships without incurring early withdrawal penalties or taxes.

One notable feature of the Solo 401(k) is that it offers a Roth sub-account option. This means individuals can make post-tax contributions to the plan, allowing for tax-free distributions during retirement. Having both pre-tax and Roth contributions options provide individuals with the opportunity to create a tax-diversified retirement income stream, enhancing their flexibility when it comes to managing taxes in retirement.

In conclusion, the Solo 401(k) is a powerful retirement savings tool for self-employed individuals. With its high contribution limits, investment flexibility, tax advantages, loan provision, and Roth sub-account option, it allows individuals to take one step closer to their retirement goals. As retirement planning remains a key aspect of financial security, considering a Solo 401(k) can be a wise decision for those seeking to secure their financial future after their working years are over.