Though unemployment rates have slowly dropped over the past few months, there are still many Americans out there who don’t have jobs. Whether you were laid off, quit or are simply can’t find a steady paycheck, you still need to find a way to save for your retirement. One of your options may be a Solo 401k plan.
This plan, also known as an Individual 401k, is perfect for two types of people. One is the small business owner and the other is a freelancer. We’ll talk about the latter first. Often times, when someone loses his/her job, they look for a quick source of income. Some examples include contract work at an IT business, freelance for a magazine or a doctor who does consulting work. Many people find this very appealing after working long at a 9 to 5 job. They’re there own boss and set the schedule and jobs they want. Others look to open up their own business. They’ve rekindled a passion that got lost in the rat race of life.
Much too often though, these guys and gals focus all of their attention on the present goal and overlook the future one of retirement. Many don’t know how or where to get started. Don’t fall into that boat if you work for yourself.
The Solo 401k was created for people like these self-starters. For 2013, a small business owner can contribute up to $51,000 ($5,500 or more if you are at least 50 years old). Check out this link for more info on limits. This plan is for owner only type businesses. If you add employees (other than your spouse), you’ll need a traditional 401k.
So, if you’re looking to go out on your own, don’t forget about your retirement planning. Setting up and maintaining a Solo 401k plan takes a bit of work so it’s best to get help from a financial adviser. Contact one of the tax experts at the IRA Financial Group today to get started!