Are you a freelancer? You can benefit from the solo 401(K) plan


Self-employed people will always try to boost their retirement savings. And it is here that the Solo 401(k) plans prove to be a pragmatic solution.

Simply put, the solo 401(k) plans are the correct retirement plans for business owners and self-employed professionals with zero employees. It also comes with increased contribution limits compared to conventional retirement accounts. Chances are that they have a spouse. All these plans have gained immense popularity owing to the features that are investor friendly. To know more about this, you can check out

However, before opting for it, you should consider the eligibility criteria. It would help if you had full-time or partial self-employment, and there should be no employees. Once you cater to these eligibility criteria, you are sorted.

When it comes to the owner-only business, it can provide you with the scope to ensure that the savings are apt to fund the retirement years. Some of the best aspects of this plan include the following:

The increased contribution limits

As opposed to retirement accounts, that has a contribution limit of $5,500; you can contribute as much as $54,000 to the solo 401(k).

There are several investment choices

Depending on the stock market for retirement, there are several plans that you need to execute. And all this might need to be better with the investors who can have increased freedom and flexibility for selecting various investments. When it comes to the self-directed Solo 401(k), you can invest in alternative assets comprising tax deeds, real estate, tax liens, private equity, mortgage notes and personal lending, and daily stock-bond investments. You have to ensure that you ask the solo 401(K) provider concerning the investment availability.

The Roth, subtracting the income limits

Per the current IRS regulations, when you file your earnings singularly over $132,000 in the current year, you wouldn’t qualify for Roth IRA contributions. Also, the phasing out will start almost at $117,000, restricting the after-tax contributions’ choices. Also, the Roth Solo 401(k) doesn’t have any earning limit and enables you to make annual after-tax contributions to as much as $24,000 when you are more than 50 years of age. It will help you to provide you the cash for tax-free growth opportunities.

Finally, you will have the ability to borrow here. The IRS allows borrowing from the Solo 401(K) plan. It indicates that no one will be able to turn you down, and you will be able to spend the cash how you feel. You must ensure that you adhere to the IRS rules concerning repayment to avoid penalties and taxes. That aside, the solo 401(k) loans have a crucial benefit over what you get from the conventional 401(k).

When it is a 401(k), as you leave the existing employment, chances are that the loan will get due. The solo 401(k) doesn’t work that way, and that’s why it has benefited freelancers and self-employed professionals. Collect as much information as required so you can fill out the form and submit it in time.

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