These are good questions. Your best bet for achieving the clarity you want as directly and quickly as possible is to call my office at 877-SOLO-401K.

Jeff

These are good questions. Your best bet for achieving the clarity you want as directly and quickly as possible is to call my office at 877-SOLO-401K.

Jeff

I am trying to determine whether a solo 401(K) would be worthwhile for me. I approach retirement, at which time I will expand my independent consulting business, a sole proprietorship of myself alone, now making a modest income of perhaps $2400 to $4800 annually. If a ’solo’ 401(K) plan can be set up and operated easily – as I believe is the case – the principal impetus to doing so now rather than later will be to provide a vehicle into which I can transfer substantial funds from retirement accounts from prior employers (providing, of course, that I am able to locate alternative investments which would look promising enough to make such a vehicle useful).

I have read IRS560 (and numerous related publications), and am confused about funding limits for the solo 401(K) in the situation that I now also participate in a separate, existing retirement plan of my principal employer, and will probably continue to do so for two years. I currently max out my elective contributions ($15,500 + $5000 catch-up) and also receive contributions from the employer (which I will estimate at $4500, for a total of $25,000 into the existing plan). I believe that my solo employer (myself as self-employer) can still set up a solo 401(K) plan and make contributions, subject to limits – and here I get quite confused – of $49,000 (less $25,000) up to 100% of self-employment income? (Or up to much higher limits in a defined benefit plan, but probably not applicable to me now.)

Or, per other advice, the solo 401(K) contributions (in the same scenario as above) could be as a profit-sharing plan of up to 25% of my self-employment income (up to what limit?). In this latter case, for example, with $3000 total income, my understanding is that my self-employment could contribute $600 to the plan, and pay me a self-employment salary of $2400.

I would appreciate exact clarification of how to determine contributions to a solo 401(K) in the situation that the individual is also an active participant in a more substantial plan for non-self-employment.

I am also confused as to whether there is any advantage of a SIMPLE 401(K) over a straight 401(K) in the case that I will surely never have any employees other than myself (or that any would be extremely limited part-timers not eligible for participation).

I believe that these would be good topics to address in that they would be relevant to quite a number of interested readers.

I am trying to determine whether a solo 401(K) would be worthwhile for me. I approach retirement, at which time I will expand my independent consulting business, a sole proprietorship of myself alone, now making a modest income of perhaps $2400 to $4800 annually. If a ’solo’ 401(K) plan can be set up and operated easily – as I believe is the case – the principal impetus to doing so now rather than later will be to provide a vehicle into which I can transfer substantial funds from retirement accounts from prior employers (providing, of course, that I am able to locate alternative investments which would look promising enough to make such a vehicle useful).

I have read IRS560 (and numerous related publications), and am confused about funding limits for the solo 401(K) in the situation that I now also participate in a separate, existing retirement plan of my principal employer, and will probably continue to do so for two years. I currently max out my elective contributions ($15,500 + $5000 catch-up) and also receive contributions from the employer (which I will estimate at $4500, for a total of $25,000 into the existing plan). I believe that my solo employer (myself as self-employer) can still set up a solo 401(K) plan and make contributions, subject to limits – and here I get quite confused – of $49,000 (less $25,000) up to 100% of self-employment income? (Or up to much higher limits in a defined benefit plan, but probably not applicable to me now.)

Or, per other advice, the solo 401(K) contributions (in the same scenario as above) could be as a profit-sharing plan of up to 25% of my self-employment income (up to what limit?). In this latter case, for example, with $3000 total income, my understanding is that my self-employment could contribute $600 to the plan, and pay me a self-employment salary of $2400.

I would appreciate exact clarification of how to determine contributions to a solo 401(K) in the situation that the individual is also an active participant in a more substantial plan for non-self-employment.

I am also confused as to whether there is any advantage of a SIMPLE 401(K) over a straight 401(K) in the case that I will surely never have any employees other than myself (or that any would be extremely limited part-timers not eligible for participation).

I believe that these would be good topics to address in that they would be relevant to quite a number of interested readers.