🚫 Don’t Set Up Your Solo 401k Until You Watch This | Live Solo 401k Expert Q&A
Why You Need to Watch This First
Before you set up a basic Solo 401(k) at a discount brokerage, understand three critical factors that could significantly impact your retirement savings:
- You still have time to establish and fund a plan for 2024
- Enhanced features available beyond basic brokerage plans
- Potential $500 per year tax credit opportunity for new plans
Critical Deadline Information for 2024
For Sole Proprietors, Single-Member LLCs, and 1099 Contractors:
- For 2024 contributions:
- Can still open and fully fund your plan after December 31st
- Open and Make Employee contributions for 2024 by 4/15/2025
- Open and Make Employer and/or Voluntary After-tax contributions for 2024 by 4/15/2025 or 10/15/2025 if file timely extension for 2024 1040
- Learn more here.
For Other Business Types (e.g., S-corp., C-corp., and Partnership):
- Open and Make 2024 employer and voluntary after-tax contributions by business tax return deadline including extension in 2025
Basic vs. Enhanced Solo 401(k): What You’re Missing
Basic Brokerage Plan Limitations:
- Limited to standard stocks, bonds, mutual funds
- No alternative investment options
- Basic Roth/pre-tax contributions only
- No participant loans
Enhanced Plan Features:
- Alternative investments including:
- Real estate
- Private equity
- Precious metals
- Cryptocurrency (qualified custodians)
- Mega Backdoor Roth capabilities
- Loan features up to $50,000
Mega Backdoor Roth Feature Details
- Make after-tax contributions
- Convert to Roth within the plan
- Additional contribution space up to $81,250 for 2025
- Tax-free growth on converted amounts
- No income limits
Loan Program Benefits
- Borrow up to $50,000 or 50% of balance
- Terms up to 5 years (longer for primary residence)
- Competitive interest rates (typically Prime + 1%)
- Flexible payment schedules (minimum quarterly)
- Multiple loans if plan permits
Tax Credit Opportunity
- Available for first-time plan adopters, and can also be added to existing plans
- $500 per year for 3 consecutive years ($1,500 total)
- Credit reduces costs dollar-for-dollar
Next Steps
- Review your current retirement savings strategy
- Consider the enhanced features you may need
- Calculate potential tax credit savings
- Consult with a qualified provider about your options
- Act before the deadlines to maximize your 2024 benefits
