Solo 401k

Rev. Rul. 2019-19 Further Affirms the Required Federal Tax Withholding on 401k Distributions

In case there was any doubt, a recent revenue ruling (Rev. Rul. 2019-19) confirms the mandatory 20% federal tax applies to qualified plan distributions (e.g., full-time employer 401k plans as well as solo 401k plans). Summary of the Ruling This ruling provides that an individual receives a distribution check from a qualified plan and does not […]

Using Roth IRA as Rainy Day Fund

In addition to being a savings vehicle for retirement, a Roth IRA can also be used as a rainy day/emergency savings fund because of the unique rules that apply to Roth IRAs vs other types of IRAs (e.g., Traditional IRA, SIMPLE IRA and SEP IRA). Unique Roth IRA Rules You always have access to your Roth […]

Yes a Solo 401k Plan May Invest in Farmland

Just like a solo 401k plan can be invest in family homes, commercial real estate, apartment buildings and rentals, a solo 401k plan may also be invested in farmland provided you open the retirement account with a self-directed solo 401k plan provider. We have seen an uptick in inquiries for investing solo 401k funds in […]

Participation in Retirement Plans Including Solo 401k continues to Increase

Since 2009 when My Solo 401k was first established, we have seen the number of new solo 4o1k plan clients increase by over 20% each year, so it is not surprising that on August 5, 2019 the Investment Company Institute (ICI) released  a study  where they found nearly two-thirds of workers between ages 26 and 64 […]

Defined Benefit Plan Participation Down to 11 Percent

It is not surprising that the adoption of defined benefit plans (DBP) has dwindled to 11 percent as of 2017 according to a study (Tracking the Shift in Private-Sector, Employment-Based Retirement Plan Participation From Defined Benefit to Defined Contribution Plans, 1979-2017) performed by the Employee Benefit Research Institute (EBRI). What is a Defined Benefit Plan? […]

Which Money Managers Manage Most Defined Contribution Plans

Recently, Pension & Investments released the 2018 top 10 defined contribution money managers and it was not surprising to see the usual suspects being that we have helped a lot of clients transfer former employer 401k plans to the self-employed solo 401k plan. Whiled other retirement plans such as 403b, defined benefit plan, 457b as […]

Required Minimum Distributions After Solo 401k Plan Participant Dies

After the solo 401k owner/participant dies, required minimum distributions must continue.  If not done, the beneficiary could face penalties and taxes. Understanding the Required Beginning Date Because a solo 401k plan is considered an  employer-sponsored retirement plan, the solo 401k  participant is required to start taking  annual distributions—required minimum distributions (RMDs)—in the year that he […]

Solo 401k for a Part-Time Pilot

QUESTION: I have been considering opening a solo 401K as a real estate investment vehicle and funding it via a previous employer 401K. I am currently employed full-time as a pilot but have the opportunity to do part-time contract work (1099) as a pilot with two separate companies; most likely under my own name / […]

Women May Want to Consider Opening a Solo 401k Plan to Improve Saving for Retirement

A survey published by T. Rowe Price found that women are saving significantly less than men for retirement, so a solo 401k plan may be a good way to bridge this savings gap. Here are some findings from the survey: Baby boomer women have a median 401(k) savings balance of $59,000, while baby boomer men […]

2019 Solo 401k Contributions Plus Voluntary After-Tax

General Information regarding Solo 401k Contributions: Solo 401k contributions are based net- income from self-employment (i.e. you can’t contribute more than you make). You can make the contributions from your business or personal checking account as long as the funds stem from self-employment income. The total contribution limit for tax year 2019 is $56,000 plus an additional $6,000 catch up if age 50 or older. For 2018, the total contribution limit was $55,000 or $61,000 if […]

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