One approach to consider is a Solo 401(k). If you work for yourself, a Solo 401(k) may help you focus on your retirement savings. These are not garden-variety 401(k) plans: their annual contribution limits are higher than traditional 401(k)s, and both you and your business have the potential to contribute to them each year.
Solo 401(k)s are designed for the smallest businesses. At most, they can have two participants: a business owner, and a business owner’s spouse (provided the spouse works for the business).(1)
You may be able to put as much $61,000 into a Solo 401(k) in 2022. If age 50 or over, the limit increases to $67,500. The Internal Revenue Service lets you contribute to a Solo 401(k) as an employee, and it also lets your business make a profit-sharing contribution to the plan.(1)
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(1) . IRS.gov, 2022
Keep in mind that this article is for informational purposes only. It’s not a replacement for real-life advice, so make certain to contact your tax, legal or financial professional before making any changes to your retirement strategy.
If you have yet to develop a retirement plan for your business, or if you're not sure the plan you've chosen is the right one, here are some things to consider.
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