Self Employed 401k

Self Employed 401k

For self-employed individuals and owner-only businesses. The owner’s spouse may participate in the plan.

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PLAN DETAILS

Self Employed 401k

Self-Employed (Individual) 401(k) plans for small businesses are provided through our custodian(s) and can help you offer competitive benefits to your employees. Offering a retirement plan is a smart way to help maintain a competitive advantage for your small business. Some of the benefits of offering a small business 401(k) plan inlcude:

  • Attract talented people in today’s challenging job market.
  • Retain valuable employees who want retirement options in their benefits package.
  • Enjoy tax advantages that may be available to you as an employer offering the plan.
  • High contribution limits
  • All the benefits of a traditional 401(k)
Key facts and details

Eligibility

An Individual 401(k) plan is available to self-employed individuals and business owners, including sole proprietors, corporations, partnerships, and tax-exempt organizations with no employees other than a spouse. You must have a minimum 5% business share to be eligible.

Tax Benefits

Contributions to a Self-Employed 401(k) plan are tax-deductible. Earnings grow tax-deferred and assets are not taxed until they are withdrawn in retirement.

Who contributes

Funded by compensation deferrals and employer contributions.

Contribution amounts

Contributions amounts are determined by the IRS. See Retirement Topics – 401(k) and Profit-Sharing Plan Contribution Limits for current information.

Withdrawals

Cannot take withdrawals from the plan until a “trigger” event occurs, such as turning age 59½, disability, or death. 10% early withdrawal penalty applies if you are under age 59½ and taking a distribution. Required minimum distributions start at age 72.

Fees

There is no cost to opening or closing an account. There is no annual maintenance fee. 401(k)s are professionally managed. Global Advisers charges an annual management fee. Other account fees, fund expenses, and brokerage commissions may apply.

Administrative responsibilities

You’ll need to file IRS Form 5500 annually when your plan assets reach or exceed $250,000.

Deadlines

The deadline to open a new plan is generally December 31 (or fiscal year-end) if compensation deferrals are intended. The SECURE Act change to tax filing deadline including extensions allows for profit-sharing only.
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