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Entrepreneurs and solo practitioners can still use 401(k) plans to save for retirement, even though they are self-employed. How? Because of the Solo 401(k).
The Solo 401(k), also known as an individual 401(k), is designed as a retirement savings plan for the self-employed. It comes with the same tax advantages and benefits of traditional 401(k) plans and allows some unique distinctions.
A Solo 401(k) is a good choice for someone running their own company or working as a freelancer.
Choosing the right Solo 401(k) provider is an important choice. You want a partner that has the flexibility, pricing, and service you deserve. Here is a closer look at 6 features to consider in a Solo 401(k) provider.
If you're someone who wants control of their financial and investment decisions, then deciding on a self-directed 401(k) is the right choice. With a self-directed Solo 401(k), you can opt for non-traditional investments. Think about things such as real estate, private equity, precious metals, or early-stage venture capital.
Look for a Solo 401(k) provider that offers these investment options, and not just the traditional assets offered by a 401(k) plan.
Rocket Dollar, for example, offers a range of self-directed alternative investments via partnerships. These partnerships are with some of the leading investment groups in real estate, venture capital, physical assets, and more.
Also look for a firm that allows for trading in assets such as:
Having the broadest reach for investment options gives you choice and control over your retirement plan.
One of the worst things is to look at your investment accounts and be surprised by unexpected fees. Managing your Solo 401(k) account is critical. Ensure that your statements, transactions and withdrawals are managed accurately. You want to look for a partner who will not gouge you with fees you weren’t anticipating.
When looking for a Solo 401(k) provider, be sure to ask about the total fees involved to maintain your account.
When it comes to your investments, you want a partner that will help answer all of your financial questions. With a Solo 401(k), for example, there are many rules to consider and navigate, including:
Having an investment partner who can help you understand these options and make the smart investment decision for you is critical.
You do not want the hassle and aggravation, not to mention the long delays inherent in setting up some investment accounts. Instead, look for a Solo 401(k) provider that makes setting up an account simple.
More than that, look for a provider that has an easy transfer process and a user-friendly investment tracker. Your retirement is important, so you don’t want it to be difficult to see how all of your assets are performing.
With a Rocket Dollar account, you can be set up and invested in minutes. The first step is to provide some basic information and determine whether you want a traditional 401(k) or a Roth IRA account.
The next step is to fund your account, typically either by rolling over an eligible 401(k) account from a previous employer, transferring an existing IRA or contributing directly. The next step is to invest.
One of the unique benefits of a Solo 401(k) is the ability to wear both employee and employer hats. This advantage can help expand your investment options. That means both an employee contribution and an employer contribution.
In 2022, you can contribute up to $61,000 or 25 percent of adjusted gross income, depending on which is lower. These contributions are not in addition to the employee contribution, but the total amount available to be contributed.
You want control of how you trade and what type of 401(k) account you use. Look for a company that has multiple account options.
At Rocket Dollar, you can choose a Silver account, which includes:
Another option is our Gold account, which features:
Helping understand the nuanced opportunities and tax implications of a Solo 401(k) is essential to make sure your retirement account. Working with an experienced provider like Rocket Dollar. Learn more about a Rocket Dollar Solo 401(k) today.
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