So you’re not currently self-employed and you think you don’t qualify for a “sole proprietor” 401(k) plan?  Think again.

You can set up a Solo 401(k) even if you already contribute to an employer sponsored retirement plan….and, there are HUGE benefits.

Combined with the ability to invest into non-traditional assets, such as real estate, the Safeguard Financial Solo 401(k) has some very attractive features that set it apart from other Self Directed IRA plans:

• High contribution amounts (up to $49,000 or $54,000 if over 50 years of age)
• Permits tax-free loans (50% of the total plan value, up to a maximum of $50,000)
• Exempt from taxes related to the debt-financed portion of a real property transaction
• Self-trustee plan (an IRA custodian is not required)
• Up to $22,000 of contributions can be designated to a Roth sub-account

Any type of business can establish a Solo 401(k), so long as there are no full time employees other than the business owner and their spouse.  It can be a partnership, corporation, LLC or sole proprietorship.  Also, the business doesn’t have to exist yet… you can set up a new business at the same time you establish the plan.

In other words, if you work for someone else, you can still set up your own business and initially fund the Solo 401(k) plan with a former plan rollover or transfer from an existing traditional IRA or SEP IRA.

A good example is Steve.  He is a security officer for a large manufacturing company and decided to offer his services on weekends for private events.  So, he set up a new company “Steve’s Security Services” and rolled over a 401(k) from a former employer to initially fund his new Solo 401(k) with $60,000.

Steve’s objective is to maximize contributions to his retirement plan and limit his tax liability, and now he’s got the perfect set up to accomplish it.  He earns $77,000 per year at his full-time job and his employer match is 3%.  So he contributes the full salary deferral of $16,500 and the manufacturing company contributes another $2,310.

Being very successful in finding part-time opportunities through his side business, Steve earns a total of $22,000.  While Steve cannot make additional deferral contributions due to maximizing through his full-time employer’s plan, he can utilize the profit sharing portion (employer match) of his Solo 401(k).  This allows him to contribute 25% of his self-employment earnings – another $5,500.

The end result?  Steve added $24,310 to his retirement plan, and reduced his taxable income by $22,000.  As a special bonus, this deferral reduced his adjusted gross income and put him in a lower tax bracket.  Steve saved more than $2,000 at tax time!

In a future blog, we’ll fill you in on how Steve invested his plan in some opportunities he identified in his local real estate market that resulted in a return on investment of over 20%.

Whether you are currently self-employed or considering adding a side business, you owe it to yourself to consider the Safeguard Financial Solo 401(k) plan.

The bottom line is this.  If you are truly interested in growing your nest egg, you need to explore your self-directed retirement plan options fully.  At Safeguard Financial, we offer the widest range of self directed investment plans in the industry.  All of our plans are focused on putting you in control of investment decisions, allow a broad range of asset choices, and are backed by the highest quality professional setup and advisory services… and a low cost guarantee.

Our expert IRA advisors can assist you in determining what the best fit for your particular situation may be, whether a Solo 401(k), Checkbook IRA, Custodian-Managed Self Directed IRA or a Business Funding IRA. When it comes to self directed IRA investing, Safeguard Financial is your one stop resource.  Contact us today to learn more and take control of your retirement plan investing.

Safeguard Financial
877-229-9763
www.IRA123.com