Checkbook 401k

Top 5 Benefits of a Solo 401k Retirement Plan Over Traditional Retirement Solutions Being self-employed is a privilege in itself but it also means that the individual is responsible for the retirement as well. What differentiates smarter people from the unaware ones is their preparation for the same. It never hurts to save an extra penny for the retirement, especially when the professional is likely to fall into a lower income group after retirement.

For people working in a company or organization, saving money in a traditional IRA makes sense. On the contrary, professionals rendering their own services should opt for self employed retirement plans. For more info about Solo 401k click here.

Solo 401k is among the most popular retirement plans for self employed individuals. The distinguishing feature of this retirement plan over traditional retirement plans is the contribution limit, as it allows the professional to make employee contributions along with additional employer contributions. The custom nature of investments and option to take out a loan makes solo 401k much more attractive.

Top 5 Advantages Of Solo 401k Retirement Plans Higher Contribution Limits: One of the distinct features of solo 401k accounts is the higher contribution limits. According to the recent IRS guidelines, the net contributions for 2014 could extend up to $52,000 and $53,000 for 2015. Individuals who are 50 years old or more can add catch up contributions of $5,500 extending their overall contributions to $58,500 for 2015.

Facility of Loan: This is the best feature of a solo 401k plan, which differentiates it from regular retirement solutions. The plan owners can borrow loan of up to 50% of their overall fund value, not exceeding $50,000, with the minimum interest rate. Further, these interest rates are going to the plan owner's account only. The individual has to repay the loan within five years with at least one premium payment every quarter.

Roth Contributions: Another important benefit of solo 401k for individuals falling in a higher income group is the ability to make Roth contributions. Roth contributions are after-tax contributions and it allows individuals to withdraw the funds without paying taxes during their retirement.

Checkbook Control Facility: With checkbook control, the individuals don't have to run around their IRA custodian and they can invest at their will. One doesn't have to pay transaction fees and the involvement of the custodian is minimal in these transactions.

Cost Effective Retirement Solution: Last but not the least, solo 401k retirement plans are cost effective and doesn't require any annual filing until the assets are within $250,000 fund value.