A New Concept In Retirement Plans, The Solo (k)

Self-employed individuals in the past have had a variety of plans to choose from in planning their retirement. However, 401(k)s were generally not among the options to be chosen. In 2001 Congress passed changes to the existing 401(k) sections. The effect of this has been to make it more practical fo...

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Bibliographic Details
Published in:Agency Sales 2004-03, Vol.34 (3), p.24
Main Authors: Basi, Bart A, Renwick, Marcus S
Format: Article
Language:English
Subjects:
Deferred compensation
Employees
Employers
Retirement plans
Self employment
Tax planning
Wages & salaries
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Summary:Self-employed individuals in the past have had a variety of plans to choose from in planning their retirement. However, 401(k)s were generally not among the options to be chosen. In 2001 Congress passed changes to the existing 401(k) sections. The effect of this has been to make it more practical for self-employed individuals to use a 401(k) plan. Under the Solo (k), the total contribution limit is the lesser of $41,000 per year or 100% of income. Compared to other retirement plans, the new Solo (k)s have higher contribution limits nearly all along the income curve. Another advantage of the Solo (k) is that very little paperwork is required, and it is inexpensive to administer.
ISSN:0749-2332