The Roth Solo 401k(we include 5 hours of immediate business/real estate coaching & lifetime deal consulting)
The self-employed, individual, solo, or self-directed Roth 401k
There have to be benefits to being self-employed, and there are. No office politics, no boss looking over your shoulder and no procedure manuals that you didn’t write. Self employment does mean long hours, a demand for resourcefulness and uneven income, but meeting these challenges eventually benefits the small business owner.
An outstanding benefit to being self-employed is access to a retirement vehicle called the individual Roth 401k. With many inviting features, the individual Roth 401k can be a self-employed person’s best friend. It offers tax-free accumulation of earnings and tax-free income when withdrawn.*
The investments that can be utilized in an individual Roth 401k are varied and run the gamut. The individual Roth 401k is less restrictive than its IRA cousin. It offers investments in real estate and private companies or life insurance, for example. Flexibility is key, and this should be appealing to the small-business owner who seeks this benefit in every aspect of life.
A different kind of 401k
So how exactly does it work? Just as the name implies, the individual Roth 401k is designed to benefit the self-employed. Also known as a solo Roth 401k plan, the individual Roth 401k has been developed as a retirement plan for sole proprietors and small business owners. The twist is that the owners spouse can participate also, if he or she is an employee of the company.
The self-directed concept
The trend in recent years in the 401k market has been towards ‘self-directed’ accounts. These accounts are often included in the employer 401k plan in the form of a ‘portal’ to a larger universe of investment choices. Just like one of the mutual fund subaccounts in the 401k plan, the self-directed option offers the 401k participant a world of investments beyond the limited offerings in the plan.
As an example, many 401k plan participants have become excited about individual stocks, after hearing news about the prospects of a new company, or the market a company serves. They may recognize trends in the population that a particular company capitalizes on, but they don’t find a mutual fund in their 401k that owns that stock. By using the ‘portal’ in their plan, they are able to purchase the stock of that company and enjoy tax-deferral on the earnings of that stock.
One added benefit to a self-directed 401k option is the ability to own ‘alternative’ investments beyond stocks and bonds and mutual funds alone. This opens a window of opportunity to the 401k owner.
Fund that plan with larger limits- here’s why
Another twist, and certainly one that makes the individual Roth 401k very attractive, is that the plan can include a profit-sharing component, which can increase the allowable contribution significantly.
What this means in simple terms is that if your company is incorporated, your company can make a profit-sharing contribution of up to 25% of your compensation into your plan.
In addition to this tax-deductible company contribution, you can contribute up to the normal limit with your employee contribution. In 2009, that amount is $16,500 for those under age 50 and $22,000 if you are 50 or older. The profit-sharing contribution can be up to $49,000 in 2009.
There are some other advantages to individual or solo 401k plans in general. Because they only cover a business owner or an owner and their spouse, the plans are not subject to the non-discrimination rules that other defined contribution plans are. Also, the solo plan is not limited by employer-imposed restrictions that often accompany many group plans.
More choices
Investment choice is a big drawing card for the individual Roth 401k. Group 401k plans are usually very limited in their investment choices. While they may allow a participant to do a very basic asset allocation, they often restrict access to more promising investments.
Choice is also part of the core logic behind the Corbin Marcus individual Roth 401k. This strategic thinking can benefit you with its focus on results. Just imagine having the option to invest in alternative investments like an RV park in a popular destination or an organic farm. You won’t find these choices in most 401k plans.
The better individual Roth 401k choice
Why limit yourself to a few run-of-the-mill investment choices when you can take advantage of a larger universe of choices? That’s one of the distinctive advantages that the Corbin Marcus solo 401k plan offers. A truly self-directed individual Roth 401k plan for the discerning retirement saver.
It’s very easy to get started
You will need an Employer Identification Number (EIN) also know as a federal tax identification number before establishing your account. If you don’t already have one, it is very simple to obtain an EIN through the IRS web site. When you have your new EIN, click here to begin. If you are unsure how to structure your business entity and get your EIN, no worries, we will help you! We are here to assist you and make the process smooth and your new Roth 401k productive.
Do you have funds in a less flexible Roth 401k?
We did more than just making enrollment easy; we went to great lengths to making rollovers a breeze. Rollovers can be a burden with some products, taking months to process and requiring volumes of paperwork.
The Corbin Marcus individual Roth 401k requires a simple set of forms to get you started. Let us do the rest. You can consolidate your funds into your new plan, take advantage of the many features of your individual Roth 401k and keep track of your investments with fewer statements.
You can even rollover your traditional IRA and qualified plans into the traditional companion 401k plan that is part of your Corbin Marcus individual Roth 401k. Click here for our easy get started form. You can roll your existing Roth 401k into your new plan. Get started today.
The information on this page is for information purposes only and should not be considered legal or tax advice. Consult a professional tax advisor or legal professional for information relevant to your specific situation.
* Must be held for 5 years. You must have reached age 59 ½ or qualifying event
