Mother and Daughter Solo 401k Plan

QUESTION:

If I pay my daughter to do some work, may I bring her to the solo 401k plan? Thanks,

ANSWER:

First, it is important to understand that a solo 401k is for owner-only business.

No, your daughter cannot participate in your solo 401k plan if your self-employed business is a sole proprietor since the sole proprietor is the business sponsoring the solo 401k plan.

However, she can open her own solo 401k plan if she is self-employed (not paid by you). Her sole proprietorship business would sponsor her solo 401k plan.

Also, if your self-employed business is an LLC and you and your daughter are both partners in the LLC structured business, then you could both participate in the same solo 401k plan since the plan would be sponsored by the LLC, and you are both owner-employees of the LLC.

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About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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