Why are so many self-employed individuals choosing solo 401k plans over traditional retirement options? The answer is simple: A solo 401k plan, also referred to as an individual 401k or a self-employed 401k, offers several benefits that cannot be obtained through other retirement plans. These benefits are specifically designed to help self-employed people with financial situations that they frequently find themselves in. … [Read more...]
Is a Self Directed 401k Plan Right for You?
What do you do if you’re self employed or you want more than what your employer's 401k plan offers? You apply for a self directed 401k. A self directed 401k (also called a solo 401k) is the do-it-yourself version of a 401k retirement plan. The major advantage to a self directed 401k is that you can control where and what kind of investments you want to put your retirement money into. … [Read more...]
SEP 401k vs SEP IRA – Which is the Better One for You?
Both the SEP IRA and the SEP 401k are retirement plans for small businesses, and the one that you choose will depend on certain conditions and preferences of the business owner, which , if you are reading this is probably you. They each have different benefits and drawbacks and they each are appropriate for different objectives. However, if you do not understand those differences, it will be difficult to choose the right one for your needs. A SEP IRA allows employees to contribute up to 25 percent of their compensation, up to $53,000 each year. The contributions are made pre-tax, which means the participants do not have to pay taxes on … [Read more...]
How I Used My Vanguard SEP IRA to Save Over a Thousand Dollars in Taxes
If you make any sort of sizeable freelance income like I do, then you’re probably already aware that you will owe taxes on all that money you’ve earned. However, I’ve discovered a really neat trick. I’ve found a really simple way to reduce my taxable earnings as well as save even more for retirement than I already was – and all I had to do was open a Vanguard SEP IRA. The results – this year I’ll save over $1,000 in Federal taxes that I would have otherwise paid had I not known about this technique. If you’d like to help yourself to some pretty significant tax savings, then let me introduce you to the concept of the SEP IRA and … [Read more...]
Using the Solo 401k Contribution Limits to Maximize Your Retirement Savings
When you are a small business owner, every penny counts. You are careful about where your money goes and you want to keep as much of it in your own pocket as possible. This is why a solo 401k plan is becoming more and more popular with self-employed individuals. It allows them to use the solo 401k contribution limits to save much more toward their retirement than other types of retirement accounts. The contribution limits of an individual 401k is the primary reason why small business owners choose a 401k over an IRA or other type of retirement plan, but only self-employed individuals who have no full-time employees other than their spouse … [Read more...]
Who Should Participate in a Solo Roth 401k Retirement Plan?
A solo Roth 401k plan is a retirement plan that is available to everyone, regardless of income. This type of retirement account is preferable for many people over a Roth IRA because they can contribute significantly more to their retirement savings each year. For instance, in 2014, you can contribute a maximum of $17,500 per year to a 401k as opposed to just $5,500 to an IRA. Even so, a Roth 401k is not for everyone. There are certain people for which it will be more beneficial than for others. It is important to understand how a Roth 401k works before deciding if this type of account is for you. To begin with, a Roth 401k is exactly like … [Read more...]
The Individual 401k Limits and Rules Explained
When you’re ready to start saving for your retirement years, you are going to learn that there are many retirement plans to choose from. You will certainly read about IRAs and traditional 401k plans, but if you’re a business owner, you will want to learn about the individual or solo 401k. This is because this plan is specifically geared toward the retirement needs of business owners who do not have any employees except for possibly a spouse. The individual 401k limits make this type of retirement plan very popular when compared with IRAs because they are much higher. In addition, individual 401k plans have other benefits that make them an … [Read more...]
Take Control of Your Retirement with a Self-Directed Solo 401k
As an owner of a business, choosing a solo 401k plan is an excellent way to save money for retirement. You have higher contribution limits than other options, including IRAs and there are other features you might need to take advantage of, such as the ability to take out a loan if your business has a down year. However, many business owners are still choosing traditional 401k plans that invest in stocks, bonds, and mutual funds. While this type of 401k is better than nothing, if you really want to make the most of your retirement, you should consider a self-directed solo 401k plan. This kind of 401k plan, also referred to as a … [Read more...]
Choosing the Best Solo 401k Providers for the Self-Employed
For self-employed individuals, the solo 401k retirement plan is one of the most popular types of retirement accounts because of its numerous advantages over other types of retirement plans. Solo 401ks, which are also referred to as individual 401ks and self-employed 401ks, are available to people who own their own business but do not have any full-time employees other than themselves and their spouses. Nearly every kind of small business, including C corporations, S corporations, partnerships, proprietorships, and LLCs, can qualify for a solo 401k plan. However, just because you know you can qualify for one doesn’t mean you know who the … [Read more...]
SIMPLE IRA Limits for 2014 and Your Retirement Savings
Every year, the IRS examines the rules and regulations that govern retirement account contributions to make sure they are in line with other economic factors, including inflation. Sometimes these rules change and in other years, they stay the same. In 2014, the SIMPLE IRA limits will stay the same as they were for 2013. This is important news for you if you intend to invest in or are currently investing in a SIMPLE IRA account. What is a SIMPLE IRA? A SIMPLE IRA is one of a variety of kinds of retirement plan options for self-employed individuals and small business owners. SIMPLE is short for Savings Incentive Match Plan for … [Read more...]