Solo 401(k) Calculator

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Solo 401k Calculator

An Individual 401(k) is ideal for self-employed individuals to provide a secure retirement. Not only are all contributions and earnings tax-deferred, but the incredibly high contribution limits permit you to set aside more money every year than other plans – making it nearly impossible not to take advantage of this plan! In addition, with taxes paid out at withdrawal time, your nest egg can build up faster with more significant potential gains.

Individual 401K Calculator

Understanding the Solo 401(k) Contribution Limits

The Solo 401(k) plan allows for higher contribution limits compared to other retirement accounts, enabling you to save more aggressively for your future.

  • Employee Contribution: As an employee, you can contribute up to $23,000 annually in 2024.
  • Employer Contribution: As your own employer, you can contribute additional funds, bringing the total combined contribution to $69,000 for 2024. If you are 50 or older, you can make an additional catch-up contribution of $7,500, increasing the total to $76,500.

Benefits of a Solo 401(k)

  1. Higher Contribution Limits: Save up to $69,000 annually (or $76,500 if you’re 50 or older), significantly more than traditional IRAs.
  2. Tax Advantages: Contributions are tax-deductible, reducing your annual taxable income. Roth contributions offer tax-free withdrawals in retirement.
  3. Investment Flexibility: You can choose from a wide range of investment options, including stocks, bonds, mutual funds, and real estate.
  4. Loan Provision: Borrow up to 50% of your account balance, up to $50,000, for any reason.

Maximizing Your Retirement Savings

To illustrate the potential growth of your Solo 401(k), let’s consider an example. Suppose you’re 40 years old with an annual salary of $100,000. You contribute $23,000 as an employee and $46,000 as an employer each year. With a current Solo 401(k) balance of $50,000 and an expected annual return of 7%, your account could grow to approximately $3,200,000 by the time you retire at 65. This example demonstrates the significant impact of maximizing your contributions and taking advantage of the Solo 401(k) benefits.

Solo 401(k) Payout Calculator

Our Solo 401(k) distribution calculator uses annuities to provide precise figures, not just estimates, to help you plan your retirement income. We use annuities with Guaranteed Lifetime Withdrawal Benefits to determine the monthly payout because they contractually guarantee payment for the rest of your lifetime. This automates your income during retirement, relieving the stress of worrying about running out of money before you die. Any remaining balance you have will be passed down to your beneficiaries.

To use the calculator simply:

  1. Enter your age.
  2. Input your resident state.
  3. Input your current balance,
  4. When would you like to collect your payout (Start My Benefits)?

How We Can Help

At The Annuity Expert, we understand that planning for retirement can be complex and overwhelming. We’re here to simplify the process and help you secure your financial future.

Your Core Problem

Many self-employed individuals struggle to find a retirement plan that offers high contribution limits and tax advantages. This often leads to insufficient retirement savings, causing stress and uncertainty about the future.

Recognizing the Symptoms

The symptoms of this problem include:

  • Limited Savings: Traditional retirement accounts may not offer high enough contribution limits to save adequately.
  • Tax Burden: Without the right plan, you might miss out on valuable tax deductions.
  • Investment Restrictions: Limited investment options can hinder your ability to grow your savings.

With 15 years of experience as an insurance agency, annuity broker, and retirement planner, The Annuity Expert is well-equipped to guide you. We believe in finding the best solutions at the lowest costs, ensuring you maximize your retirement savings efficiently.

Solo 401K Calculator 2023

What We Recommend

Step 1: Schedule a Consultation

Contact us for a free consultation. During this meeting, we’ll discuss your financial goals and assess your current retirement strategy. The main benefit is understanding your options clearly and how a Solo 401(k) can fit into your retirement plan.

Step 2: Personalized Retirement Planning

Based on your consultation, we’ll create a personalized retirement plan tailored to your needs. This plan will outline specific steps to maximize your Solo 401(k) contributions and investments. The main benefit is having a customized roadmap that aligns with your financial goals.

Step 3: Ongoing Support and Management

We’ll provide ongoing support and management of your Solo 401(k), ensuring your investments stay on track. The main benefit is peace of mind, knowing your retirement savings are being expertly managed.

Features and Benefits

  • Comprehensive Retirement Planning: Tailored strategies to maximize your savings.
  • Expert Investment Advice: Guidance on choosing the best investment options for your Solo 401(k).
  • Tax Optimization: Strategies to reduce taxable income and increase retirement savings.
  • Continuous Monitoring: Regular reviews and adjustments to keep your retirement plan on track.

Common Objections and Strong Arguments

  • Objection: “I don’t have enough income to save that much.”
    • Response: Even small contributions can grow significantly over time. We’ll help you find a savings strategy that fits your budget.
  • Objection: “I’m not sure if a Solo 401(k) is right for me.”
    • Response: Our experts will assess your situation and recommend the best retirement plan for your needs.

Failing to plan adequately for retirement can lead to financial insecurity and stress. On the other hand, working with us ensures you maximize your savings, achieve your financial goals, and enjoy a comfortable retirement.

Imagine the peace of mind and satisfaction of knowing your retirement is secure. With our help, you can feel confident, empowered, and ready to enjoy your golden years.

Contact us today for free advice or a quote. Let The Annuity Expert help you secure your financial future.

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Frequently Asked Questions

How much of my 1099 income can I put in Solo 401k?

You can contribute up to 100% of your 1099 income or $69,000 (for 2024), whichever is less, to a Solo 401k.

Is a solo 401k a good idea?

A solo 401k can benefit self-employed individuals or small business owners without full-time employees. It allows for high contribution limits and investment flexibility, potentially reducing taxable income and saving for retirement.

Should I max out my solo 401k?

Maxing out your solo 401k contributions can be a good strategy for maximizing retirement savings and reducing taxable income, but it depends on individual financial goals and circumstances.

Can I contribute more than I make to a Solo 401k?

No, you cannot contribute more than you make to a Solo 401k. The contribution limit is tied to your earned income.

Can I contribute to a Solo 401k in a lump sum?

Yes, you can make a lump-sum contribution to a Solo 401k if it does not exceed the annual contribution limit set by the Internal Revenue Service (IRS).

Can a self-employed person have a 401k?

Yes, a self-employed person can have their own 401k plan, called a Solo 401k.

Can I set up a solo 401k by myself?

You can set up a solo 401k by yourself. Still, it is advisable to seek assistance from a financial advisor or tax professional to ensure compliance with relevant laws and regulations.

How much can an LLC contribute to a solo 401k?

An LLC can contribute up to 25% of the net self-employment income of its owner to a solo 401k, with a maximum limit of $69,000 for 2024.

What are the advantages of a solo 401k plan for a sole proprietorship?

The advantages of a solo 401k plan for a sole proprietorship include higher contribution limits, tax benefits, and the ability to borrow from the plan.

What is the contribution deadline for contributing to a solo 401k plan?

If you are planning to contribute as an employer, the plan must be established by December 31, 2024, for the 2024 filing season. Generally, you are allowed to make contributions until your tax filing deadline.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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