Los Angeles, CA (PRWEB) April 22, 2014
These days, many financial service providers are offering different kinds of retirement plans for the self-employed—such as Solo 401k and SEP IRA. It is essential that these retirement plan providers discuss the benefits of the Solo 401k vs SEP IRA particularly to those individuals running small business without employees in their payroll other than their spouse. Being aware of the features that this self employment 401k have will allow individuals to understand what they can and cannot do with their retirement savings.
It is common for most self-employed business owners to set up SEP IRA to save for their retirement. SEP IRA can provide retirees with substantial source of income and is available to any type of business—whether small or large scale. Unlike the Solo 401k, a SEP IRA can be set up by large scale business owners with several employees as a retirement plan for himself as the owner of the business and also for his employees at low administration cost, thus, in this case, SEP IRA is the best IRA for self employed individuals.
A solo entrepreneur who owns a small business without any full time employees, whether he or she is employed or not, the SEP IRA could be an option, but if the person has been provided to choose over the Solo 401k vs SEP IRA, the former is the most suitable plan for him. Both plans, when self-directed by the self-employed owner, could both benefit from the unlimited investment options in non-traditional assets. Also, both plans have checkbook control feature that offers individuals flexibility and control on their retirement money.
However, if an individual would keenly compare the Solo 401k vs SEP IRA, (1) SEP IRA doesn’t have a loan feature which account owners can take advantage of especially in times of emergency. (2) The Solo 401k plan has a Roth sub account feature which makes it easy for account owners to assign post tax contributions on their account making their retirement money tax diversified. (3) There is no particular limit in making post tax contributions other than the individual’s contribution limit for each year which is $17,500 for 2014 plus the $5,500 catch up contribution. If the individual chooses to assign the total or just a portion of his yearly limit to the Roth account then he may do so. The contribution to Roth account and pre-tax account depends on how the owner proportions it. Furthermore, the (4) Solo 401k doesn’t require a custodian to meddle with the account transactions which eliminates custodian fees and process delays.
Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.
To learn more information about Solo 401(k) for self-employed real estate agents, please visit http://www.sensefinancial.com.