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One Person 401(k) Plan
Monday, 29 June 2020 15:44

If you are an Independent Contractor, or Self-Employed, or a Sole Proprietor, then you, too, can have a 401(k) retirement savings plan.

There are two very significant advantages of the Owner Only 401(k) Plan vs. other retirement plans such as a SEP IRA, SIMPLE IRA, or Traditional IRA.

  • You can contribute more to a 401(k) plan than a SEP, SIMPLE, or Traditional IRA, and
  • You can borrow from your own 401(k) plan.

On the other hand, loans from any type of IRA are prohibited.

For example, how much more can you contribute to a 401(k) plan:

Salary  Employer Contribution   Maximum Elective Contribution   Total Contribution 
 Owner   $150,000   $37,500   $26,000   $63,500 

Or you can add a spouse to your plan:

Salary  Employer Contribution   Maximum Elective Contribution   Total Contribution 
Owner  $150,000  $37,500 $26,000 $63,500
 Owner's Spouse  $26,000 $6,500 $19,500 $26,000
Total Contribution → $89,500

Would you like a FREE look at what a 401(k) Plan can do for you? Complete the form below:

 

Brent D. Gardner, CLU, ChFC