IWS Investor Newsletter Issue No. II • Summer 2010
Eric Wikstrom's
Retirement & Wealth Planning Advisor
The Solo 401(k) -
I take calls on a frequent basis from self-employed individuals from around the country asking why I recommend the Solo 401(k) as their retirement plan of choice. Let's start with the basics:
1) The Solo 401(K) plan is easy to understand -
As opposed to multi-employee company plans, the Solo 401(k) plan is a breeze to deal with administratively. Therefore, you can can focus on what you do for a living as opposed to becoming knowledgeable in retirement plans.
2) The Solo 401(k) is extremely flexible -
Annual contributions are not mandatory, so in years with low earned income or wages, you're not required to contribute to your plan, unlike a defined benefit plan.
3) The only disallowed investment within the Solo 401(k) plan is collectibles -
Real estate, trust deeds, tax liens, private placements, LLC interests, you name it, you'll be able to invest in it. Plus with a Solo 401(k) plan designed by Integrated Wealth Strategies, LLC you'll have the option of acting as your own Trustee. This can give you tremendous investment and decision making flexibility.
1) The Solo 401(K) plan is easy to understand -
As opposed to multi-employee company plans, the Solo 401(k) plan is a breeze to deal with administratively. Therefore, you can can focus on what you do for a living as opposed to becoming knowledgeable in retirement plans.
2) The Solo 401(k) is extremely flexible -
Annual contributions are not mandatory, so in years with low earned income or wages, you're not required to contribute to your plan, unlike a defined benefit plan.
3) The only disallowed investment within the Solo 401(k) plan is collectibles -
Real estate, trust deeds, tax liens, private placements, LLC interests, you name it, you'll be able to invest in it. Plus with a Solo 401(k) plan designed by Integrated Wealth Strategies, LLC you'll have the option of acting as your own Trustee. This can give you tremendous investment and decision making flexibility.
THE retirement plan for self-employed individuals
Whether it's the age 50+ "catch-up", the ability to make a Roth contribution of up to $22,000 (regardless of income!), the ability to take a personal loan from the plan (funds can be used for any reason) or the ability to invest in leveraged real estate with any Unrelated Business Income Tax implication, it's easy to see why I'm such a big fan of the Solo 401(k).
To learn if a Solo 401(k) plan might be the right retirement plan for you, call or email me to set up a one-on-one webinar appointment where we'll walk through in greater detail the specifics of this great retirement plan.
Critical Point: It can typically take anywhere from 2-4 weeks to get the Solo 401k plan documents in place, a bank or brokerage account set up and your other retirement funds transferred to your new Solo 401k plan. So planning ahead is very important. In the current economic environment where opportunistic investment situations arise quickly, you'll want to be properly positioned with your retirement plan to take advantage of great opportunities as they come your way.
Plus, it's extremely important that you title and fund any investment you make with a properly formed and funded retirement plan. I've seen many situations where individuals don't get their retirement plan properly structured, then try to jerry-rig the deal by starting with personal funds and then inserting retirement funds at a later date. That type of situation could result in a dreaded prohibited transaction which is something you really don't want.
Plus, it's extremely important that you title and fund any investment you make with a properly formed and funded retirement plan. I've seen many situations where individuals don't get their retirement plan properly structured, then try to jerry-rig the deal by starting with personal funds and then inserting retirement funds at a later date. That type of situation could result in a dreaded prohibited transaction which is something you really don't want.