Definition
A retirement savings plan for self-employed individuals or business owners with no employees, offering high contribution limits and tax benefits.
What to consider
- It’s a powerful tool if you run your own business.
- Maximize contributions while keeping business cash flow in mind.
- Review the plan’s rules to take full advantage of its benefits.
Real world scenarios
- As a sole proprietor, Raquel opens a Solo 401k, contributing both as an employee and employer, accelerating her retirement savings.
- Jacob’s freelance design business profits allow him to fund a Solo 401k more aggressively in good years, giving him flexibility during lean periods.
- With no employees, Monica prefers a Solo 401k over other plans for higher contribution limits and control of her investment choices.
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