In 1981, the IRS formally described the rules for 401(k) Plans. The Solo 401(k) Plan is an IRS approved type of qualified plan. The Solo 401(k) plan is not a new type of plan. It is a traditional 401(k) plan covering only one employee. The plans have the same rules and requirements as any other 401(k) plan. The surging interest in these Solo 401(k) plans is a result of the EGTRRA tax law change that became effective in 2002.
A Solo 401(k) plan is perfect for any sole proprietor, consultant, or independent contractor. A Solo 401(k) Plan offers the same abilities as a Self-Directed IRA LLC, but without having to hire a custodian or create an LLC.
The Solo 401(k) Solution
A Solo 401(k) Plan offers a self-employed business owner the ability to use his or her retirement funds to make almost any type of investment, including real estate, tax liens, private businesses, precious metals, and foreign currency on their own without requiring custodian consent tax-free! In addition, a Solo 401(k) Plan will allow you to make high contributions (up to $59,000) as well as borrow up to $50,000 for any purpose. Have an investment opportunity, such as real estate or a business investment that you would love to make with your 401k funds? Want the ability to make high tax-deductible or Roth contributions? Need to access up to $50,000 of your retirement funds for personal use? Then the Solo 401(k) Plan is your solution!