Handling and managing your own business means you are taking charge of everything. That's why it's always nice to be your own boss! If regular employees have their own retirement plans, self-employed workers have their own retirement options as well. The most recommended and beneficial plans are 401(k)s and solo Roth 401(k)s.
These two retirement plans has been introduces a few years ago and now, they are a common household names in financial investment world. Commercial clients have become more assured with both 401(k) and solo Roth 401(k) according to research.
What are the benefits entitled to self-employed folks with these two types of retirement plan? One of the major advantages is they usually allow for higher retirement-savings contributions than other plans. It provides great contribution potential and they have much easier rules to follow compared to a Keogh. On the other hand, the need for supplementary paperwork and actuary may possibly be required.
With individual 401k or solo 401k, you can contribute more than the ordinary IRA, with over $11,000 maximum annually for folks under the age of 50 while the older ones can add up 3% more of their income right after self-employment adjustments have been made. More than Roth IRAs, for those who are 49 and under can put away a ceiling of $5,000 and $6K for the older folks. Furthermore, individual 401k has no income limits on who can avail for the plan, unlike Roth IRA that has several limitations.
In addition, Roth solo and regular solo 401k plans can agree to take in higher contributions than a SEP or the Simplified Employee Pension IRA income level that are the same. Business owners are allowed to make contributions more than 20% of their net business earnings which can reach up to $49,000 if they are certified solo owners in a SEP IRA for 2009 and 2010 - or if their company is a corporation, they can contribute 25% of their earnings. On the other hand, with a solo 401k or solo Roth 401k, for 2009 and 2010 you can give off the plan 100% of your first $16,500 in profits from the business or $22,000, if 50 or older - plus 20% of net profit, until you max out contributions at $49,000.
Everybody deserves the benefits from these plans, employee and self-employed alike. Find time to set up your preferred retirement investment to further secure your future and continue to live a happy life.
These two retirement plans has been introduces a few years ago and now, they are a common household names in financial investment world. Commercial clients have become more assured with both 401(k) and solo Roth 401(k) according to research.
What are the benefits entitled to self-employed folks with these two types of retirement plan? One of the major advantages is they usually allow for higher retirement-savings contributions than other plans. It provides great contribution potential and they have much easier rules to follow compared to a Keogh. On the other hand, the need for supplementary paperwork and actuary may possibly be required.
With individual 401k or solo 401k, you can contribute more than the ordinary IRA, with over $11,000 maximum annually for folks under the age of 50 while the older ones can add up 3% more of their income right after self-employment adjustments have been made. More than Roth IRAs, for those who are 49 and under can put away a ceiling of $5,000 and $6K for the older folks. Furthermore, individual 401k has no income limits on who can avail for the plan, unlike Roth IRA that has several limitations.
In addition, Roth solo and regular solo 401k plans can agree to take in higher contributions than a SEP or the Simplified Employee Pension IRA income level that are the same. Business owners are allowed to make contributions more than 20% of their net business earnings which can reach up to $49,000 if they are certified solo owners in a SEP IRA for 2009 and 2010 - or if their company is a corporation, they can contribute 25% of their earnings. On the other hand, with a solo 401k or solo Roth 401k, for 2009 and 2010 you can give off the plan 100% of your first $16,500 in profits from the business or $22,000, if 50 or older - plus 20% of net profit, until you max out contributions at $49,000.
Everybody deserves the benefits from these plans, employee and self-employed alike. Find time to set up your preferred retirement investment to further secure your future and continue to live a happy life.