Using the Solo 401k, account owners have the option to allot their contributions on an after-tax basis and reap its benefits during retirement age.
Los Angeles, CA (PRWEB) April 02, 2014
Many would still go after the benefits of delaying tax on their retirement account contributions instead of paying upfront using the self employed Roth 401k. Most people would think that going for a Roth 401 k plan would be more complex because of the tax deductions, computations, and rollovers. Using the Solo 401k, account owners have the option to allot their contributions on an after-tax basis and reap its benefits during retirement age.
Federal and income tax rates are predicted to increase over time, and who knows, it may even take place during retirement. For the Roth 401k qualified recipients, receiving their retirement funds even when there is a tax rate increase will not affect them because the qualified distributions are free from tax, this alone could save an individual from tax deductions big time.
Tax-free withdrawal access before the age of retirement is another tax savings that the self employed Roth 401k offers aside from the no-penalty charge when withdrawals are equal or less than the total amount of contribution. This is because the retirement plan is funded by taxed contributions. The only time a retirement account holder will be taxed is when the withdrawals made is greater than the total contribution in which any excess amounts will be charged 10% penalty and income tax.
When individuals set up a Solo 401k account, they have the option to make contributions on an after-tax basis because this retirement account has self employed Roth 401k sub account feature. Through this feature, an individual can tax diversify retirement savings easily because he can have both post-tax and after-tax account. This method is beneficial for individuals who see their income being covered on a higher tax bracket upon retirement. The flexibility of the Solo 401k Roth sub account is one of the reasons why it is the ultimate retirement plan for self-employed individuals and existing retirement account owners.
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