The Benefits Of A Solo 401(k) Retirement Plan
Anyone can start to plan for retirement, even if you are self-employed. If this is the case, here are some of the benefits of a solo 401(k) retirement plan.
If you are operating your own small business or do freelance work, then you might be wondering what’s in store for your retirement. When you are self-employed, you have the option of setting up a solo 401(k) plan, which is one of the best routes in terms of retirement planning. Learn more about all the benefits of a solo 401(k) retirement plan ahead.
High Contribution Limits
One main reason that many go with a solo 401(k) retirement plan is because of the high contribution limits it allows. In fact, a solo 401(k) has the highest contribution limits out of any other retirement plan, which means you can build your funds quickly.
More Freedom With Investments
Another benefit of a solo 401(k) retirement plan is how much freedom you have when it comes to investments. Instead of just investing in stocks and bonds, you have a much wider range of investment options with a solo 401(k). Here are just some of the investments you can make with a solo 401(k):
- Real estate
- Precious metals
- Private lending
- Tax liens
- Mortgages
- The Ability To Take a Loan
Usually, it’s not a good idea to take out a loan from your retirement plan, but it’s always nice to at least have the option if you need to. Unlike many retirement plans, you have the ability to take out a loan against a solo 401(k) plan, and especially in the current economic climate, it makes for a good safety net.
Option To Save With Roth
The tax advantages that come with a retirement plan are huge, and many people usually just get the option to use a traditional plan. However, when you set up a solo 401(k) plan, you have the choice to go with a Roth plan as well. This means you are free to choose whichever tax advantage you want when you have a solo 401(k) plan.
Just because you are self-employed, that doesn’t mean you can’t start setting yourself up for a safe and secure retirement life. In reality, you have far more freedom with a solo 401(k) plan than you would with the traditional retirement plans available through most companies. If you are unsure of where to begin, it’s not a bad idea to hire a financial advisor to put yourself on the right track for your future.