Saturday, July 13, 2024


What Makes Up a Good Solo 401k Provider?

Solo 401k Provider


Are you an independent contractor, freelancer, or entrepreneur of some sort? If so, you may be struggling to find a good retirement plan that will help give you peace of mind that you are protected once you stop working.

Luckily, the Solo 401k plan allows those who serve as their own boss to experience significant benefits that are hard to come by otherwise.

What are the Benefits of a Solo 401k Plan?

Generally, the major benefits of a Solo 401k plan can be broken down into three major categories.

  1. Excellent Savings.

With your solo venture, you serve as both employer and employee. This means that you can essentially be thought of as two distinct people with regards to your Solo 401k account. As an employee, you are able to invest as much as $20,500 each year. In your role as employer, you can additionally save $40,500. Combining these two amounts, you are able to save as much as $61,000 annually in your 401k account.

This is arguably one of the best retirement plan options available period, regardless of the plan in question.

  1. Tax Options.

Taxes are a hot button issue for many people. You probably have strong feelings about how your money should be taxed, and you may even have predictions about how taxes will change years down the road. For this reason, you have the option to have your money taxed when you defer it into your account (Roth 401k option) or when you begin to take money out in your retirement (Traditional 401k option). Neither way is “right” or better than the other. It’s up to you to decide which option will work best for your business and your financial situation.

  1. Loan Availability.

As a one-person operation, you have limited options when you face difficult situations. Conflicts with other nations, natural disasters, pandemics, and other issues are hard to predict, and they are even harder to prepare for. Therefore, with a Solo 401k, you are given the option to take out loans in difficult times. In fact, you are able to take a loan of as much as $50,000, if needed. It goes without saying that you should, whenever possible, allow your money to remain in your account and mature. But when you face unprecedented situations in your business, you may be forced to make a tough decision and take a loan from your retirement account.

How to Select a Good Solo 401k Provider

There are a number of factors you should consider when deciding on your Solo 401k plan provider. To start, you’ll want to check and see if your provider imposes any excess fees or costs on your plan. Unfortunately, these hidden costs do occur with many providers, and they can make for a big, unnecessary expense down the road.

Secondly, you should seek to find a provider who offers great customer service. When you have questions, you deserve answers! Make sure your provider is available through phone and email, at a minimum.

Ready to open your own Solo 401k? Call a plan provider today!

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