Solo 401(k) vs. Regular 401(k): What’s the Difference?
🚫 Still time to setup a solo plan before year end
🚷 A bit late in the game to do a regular plan with other employees.
If you’re running a business, the type of 401(k) you choose can make a big impact on your retirement planning and admin workload.
Let’s break it down:
➡️Solo 401(k):
✔️ Who it’s for:
Self-employed individuals or business owners with no employees (except a spouse).
✔️ Key benefit:
You wear two hats – employee and employer, meaning you can contribute up to $69,000 (2024 limits) or more if you’re over 50.
✔️ Admin work:
Light and simple until your plan hits $250k in assets.
➡️ Regular 401(k):
✔️ Who it’s for: Businesses with employees.
✔️ Key benefit:
Helps you attract & retain talent while providing tax advantages.
✔️ Admin work:
More rules to follow!
You’ll deal with discrimination testing and additional reporting to ensure fairness for all employees.
Pro Tip:
If your business grows beyond just you, you’ll need to transition from a Solo 401(k) to a more traditional 401(k).
Plan ahead for the next step!
Are you maximizing your retirement options and staying compliant?
Let’s chat. 📞
Contact Us Today!