Is a Solo 401k Right for Me?
A Solo 401k has many names such as One-Participant 401, Solo-k, Uni-k, or One-Participant k. The IRS created this retirement account with small business owners in mind. Below are some frequently asked questions that will help you determine if this plan is right for you.
What is a Solo 401k?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
Who is eligible?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
What is the difference between a Solo 401k and a Self Directed SEP IRA?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
What investments can I make with a Solo 401k?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
Will I have my own checking account?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
What is the process?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
How do I fund the Solo 401k?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
Transferring from another retirement account to the Solo 401k
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
How can I start a Solo 401k?
A Solo 401k plan is a Qualified Retirement Plan (QRP) designed for small business owners who traditionally do not have the benefits of an employer-sponsored 401k. Business structures include a sole proprietorship, LLC, C-Corps, and S-Corp.
Types of Self-Directed IRAs
Unlike many IRA companies, IRA Club allows the IRA owner (you) to select investments that are best for your future. The IRA Club does not place artificial restrictions on your investments. This allows for an opportunity for enhanced returns. There are a few things to consider when choosing the type of accounts such as age, when you wish to retire, your tax bracket and your contribution capability. Please seek out the services and advice of a tax professional.
| Self Directed Investment | Traditional | Roth | SEP | Simple |
|---|---|---|---|---|
| Make any investment that is not a prohibited transaction |
yes
|
yes
|
yes
|
yes
|
| Income Tax Deductible |
yes
|
no
|
yes
|
yes
|
| Must have earned income to make new contributions to an IRA |
yes
|
yes
|
yes
|
yes
|
| Unlimited amount transferrable from one IRA account to another IRA account |
yes
|
yes
|
yes
|
yes
|
|
Unlimited Earning Limits * using a Backdoor Roth |
yes
|
yes*
|
yes
|
yes
|
| Qualified distributions are taxed as ordinary income |
yes
|
no
|
yes
|
yes
|
| Qualified distributions are income tax-free |
no
|
yes
|
no
|
no
|
|
Annual required minimum distribution * must start at age 72 |
yes*
|
no
|
yes*
|
yes*
|
| Passes to a beneficiary | As a Traditional IRA account | As a Roth IRA account | As a Traditional IRA account | As a Traditional IRA account |
| Beneficiary can continue to invest the funds in the Inherited IRA |
yes
|
yes
|
yes
|
yes
|
| Super bonus for all IRAs |
no
|
no
|
no
|
no
|
|
Subject to probate * No, if there is a named beneficiary |
no*
|
no*
|
no*
|
no*
|
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