Solo 401k: A Self-Managed Retirement Plan
Yes, you can set up a 401k on your own, specifically through a Solo 401k plan. This is ideal for self-employed individuals or small business owners without employees (other than a spouse). The Solo 401k allows for higher contribution limits compared to traditional IRAs and provides both Roth and traditional options.
- Higher contribution limits than an IRA.
- Tax-deferred growth, with Roth or traditional tax treatments.
- Flexibility in investments.
Alternatives to Solo 401k
1. Roth IRA: Post-Tax Contributions for Tax-Free Growth
- Contributions are made with after-tax dollars.
- Withdrawals in retirement are tax-free.
- Lower contribution limits than a Solo 401k.
2. Fixed Index Annuity: Stable, Long-Term Investment
- FIAs provide a guaranteed minimum interest rate.
- Potential for higher returns based on a stock index.
- Less risky compared to direct stock investments.
Comparing Retirement Savings Options
|Fixed Index Annuity
|Pre or post-tax
|Deferred or Roth
Choosing between a Solo 401k, Roth IRA, or a fixed index annuity depends on your individual financial situation and retirement goals. Solo 401k offers high contribution limits and tax flexibility, Roth IRA provides tax-free growth, and fixed index annuities offer stable, long-term returns with less risk. Evaluate your needs to make an informed decision.
Contact us today for a free quote.
Need Help With Retirement?
Get help from a licensed financial professional. This service is free of charge.