Solo 401k plans are excellent options for self-employed individuals. These retirement plans offer massive contribution limits, Roth and Traditional tax options, and the availability of loans.
But how does one go about setting up a plan? Furthermore, what criteria should a self-employed worker use to select a plan provider?
Let’s take a look at both of these questions in depth!
How to Set Up a Solo 401k Retirement Plan
First and foremost, you’ll need to select a Solo 401k plan provider. We will go into further detail on this process in the next section.
Once you’ve selected a plan provider, the process of opening a Solo 401k is relatively easy. The following step-by-step list provides the general outline for how to open an account:
- Complete all necessary forms. You’ll need to fill in the necessary information on an application form, provide your EIN, and complete any other paperwork as indicated by the plan provider.
- Select which type of contributions you’d like to make. There are many different options such as stocks and bonds from which you can choose. Depending on your investing knowledge, you may choose one type of investment over another.
- Meet all deadlines. Your investments need to be made before the end of the calendar year (as an employee) and before the traditional tax deadline of April 15th (as an employer). You need to be sure to keep an eye on the date to get your contributions in for the year in question.
How to Choose a Solo 401k Plan Provider
It’s critical that you select a plan provider who will offer you the best opportunity to succeed. The following points bear some consideration when you are deliberating between plan providers.
- Are there any associated fees? Make sure you ask your plan provider whether they impose any fees and how much they charge, if they do. If you can find a plan provider with little or no extra cost, you should strongly consider using them.
- How difficult is it to manage and set up the plan? Some technology is just way too complicated. You should find a plan that uses an easy, straightforward management method where you can quickly find what you are looking for, make any necessary changes, and get on with your day.
- Does the plan provider have quality customer service representatives? If you ever run into issues, you’ll want to know that there are qualified staff members who can answer your questions and fix whatever problem you are experiencing. Having good customer service in a plan provider is important for a successful, long-term relationship.
Conclusion
Opening a Solo 401k retirement plan is one of the best decisions you will ever make for your single-member business. The plans are incredibly beneficial and can help entrepreneurs in many ways.
It’s important that you choose a plan and a plan provider that will make it easy for you to plan for retirement. If you’re ready to start your plan, call a quality Solo 401k provider today!
