Categories: Retirement Tax Planning
Solo 401(k) Plans are retirement savings plans designed for self-employed individuals and business owners with no employees other than a spouse.
These plans allow participants to contribute both as an employee and as an employer, maximizing their retirement savings potential.
The employee contribution limit is similar to that of traditional 401(k) plans, while the employer contribution can be up to 25% of the business’s net earnings.
For 2023, the total contribution limit (employee plus employer) can go up to $66,000, or $73,500 if the participant is age 50 or older, allowing for catch-up contributions.
Solo 401(k) Plans also offer tax advantages such as tax-deferred growth on investments and potential tax deductions for contributions.
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