Individual 401k

A tax-deferred retirement plan that offers self-employed individuals and spouses the maximum retirement savings along with a Roth 401(k) option.

Account Details

Benefits

• The plan provides self-employed individuals with generous contribution limits.
• Individual 401(k) contributions are generally contributions that are deductible as a business expense and are not required every year.
• You can borrow against your plan assets.
• You are able to roll over or transfer assets from SEP-IRAs, SIMPLE IRAs, and Profit Sharing plans into the pre-tax, Individual 401(k) account.
• Roth Individual 401(k) participants may still have and contribute the maximum allowable amount to a Roth IRA in addition to their Roth Individual 401(k) contributions.

Who Can Establish an Account

Available to any sole proprietor, consultant, or independent contractor.

Investors must meet two requirements:

1. Presence of self-employment activity.
2. The absence of full-time employees.

Eligibility

• No age or income restrictions.

Contributions

• Employee Salary Deferrals up to $22,500 , or $30,000 if age 50 or over. These salary deferrals can be split between the pre-tax Individual 401(k) account and the after-tax Roth Individual 401(k) account.
• Profit-Sharing Employer Contributions not to exceed 25% of compensation. This discretionary contribution must be made to the pre-tax Individual 401(k) account.
• The total of salary deferrals and profit-sharing contributions cannot exceed $66,000 in 2023.
• Up to 25% of the compensation (Total allowable profit sharing contribution must be reduced by any employee salary deferrals.)