Individual 401k
The existence and the effectiveness of the 401k plan are already known to many of the American citizens. You have an opportunity to save for your retirement age and to ensure your well off living having reached this stage of your life. If you are an employee you have this right and possibility, but will this very plan apply to you if you are an employer and an employee at the same time? The answer is yes. There is the so called individual 401k which provides sole proprietors with the similar rights and opportunity as the ordinary 401k has. Anywhere in the press you may also find the terms Solo 401k, Single (k), and Self Employed 401k. These are all synonyms that define the same notion.
Individual 401k started its existence on the 1st of January, 2002 and gave great advantages for those who own his or her own business. Comparing with some other self employed retirement plans individual 401k allows to make greater contributions at the same income levels, achieving valuable tax deduction and maximizing retirement contributions. But still like any other law individual 401k has some certain restrictions. The matter is that you are considered to be the sole proprietor and to use the 401k plan only if you do not have any other employees in your business. The exception can only be your spouse. In this case you can count on obtaining individual 401k program. Besides you can rollover or transfer your funds into any other retirement plan. But of course there are also some limits on the amount of money a person can contribute and in this particular case the number is $ 11,000. Those who are 50 years old or over can contribute additional $ 1,000, so as the result the number is quite convincing. Every proprietor should decide for himself or herself which plan to choose, what is more profitable for him or her and more convenient. Here we can single out the so called candidates for the individual 401k. So if you are a sole proprietor or his/her spouse, if you look for a plan that offers higher contribution limits, or for the flexibility to maximize profit contributions, if you would like to have the possibility to take tax-free loans, this individual program is just for you. Of course choosing a plan requires a lot of consideration, but still if you want to ensure your own happy and well-to-do future you will make sure that anyway you are in great need of some plan. Knowing all minor details of a program is also essential, and I guess there is no need to explain why you have to do so. You must be always aware of what you can do with your own money, so why not make it work for you? |