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Self-Employed 401(k) Plans

For self-employed individuals, including those who are the sole member of their business (or with just a spouse), the Solo(k) or Self-Employed(k) plan offers a remarkable opportunity to maximize retirement savings and harness significant tax benefits, unlike conventional IRAs or Roth IRAs.

Setting up an individual 401(k) is often cost-free and has generous pre-tax contribution limits: $22,500 for those under 50 in 2023, plus up to an additional $7,500 for those 50 and older. With the potential for business profit-sharing contributions, you could contribute in total up to $66,000 (or $73,500 with catch-up contributions) for 2023—significantly more than IRA or Roth IRA limits.

Additionally, 401(k)s have an advantage where, if you retire or leave a company at age 55 or later, you can start plan distributions without the 10% penalty. This is in stark contrast to an IRA, where penalties typically apply until age 59 ½. Furthermore, if you’ve transitioned from a job with a 401(k) plan, you can seamlessly roll that account over into your Solo(k), consolidating your investments and preserving the rule of 55. The Solo(k) also broadens your investment choices, far beyond the limited options of traditional employer 401(k)s, and this flexibility extends to Solo Roth 401(k) accounts too.

In summary, Solo(k) plans empower self-employed individuals and their spouses by substantially reducing taxable income and bolstering retirement savings. We’ve had the privilege of helping self-employed individuals across the nation take advantage of this strategy through their business. If you’re interested in learning more, schedule your complimentary consultation today!

Meet The Author

Tyler D. Caveness

Founder & Principal Advisor

  • B.A. in Economics from Harvard University
  • Licensed Investment Advisor
  • Board of Trustees – North Cross School
  • Board of Directors – Member One Federal Credit Union
  • Past President – North Cross School Alumni Board

As a self-employed advisor and entrepreneur, I walk the same entrepreneurial path you tread each day. I grasp the blend of passion, persistence, and pragmatism that drives your decisions, because it drives mine too. This shared journey offers me unique insight into the challenges and aspirations of fellow self-employed individuals and corporate executives.

When we discuss your financial goals and hurdles, I don’t just offer advice from a textbook perspective; I offer it from a place of genuine understanding and shared experience.

Trust that when you talk, I’m not just listening – I’m truly comprehending the nuances and requirements of your journey.

I understand the angst that can arise when you are trying to plan for investment opportunities, business expansion or acquisition, estate and insurance needs for your family, dealing with business partners, trying to minimize your income tax burden, trying to secure financing for a strategic goal, etc., all while dealing with the day-to-day demands of your valuable time.

My priority is to be your most valuable resource, helping you to cut through the noise and make clear, informed financial decisions that align with your goals.

You are the visionary for your plan, and my mission is to help you hone and implement that vision.

Thank you for the opportunity,

Schedule a Consultation.

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