- quote -

Before you get too enamoured with the "401K" aspect, compare
the costs to a good SEP at, say, Vanguard or Fidelity.

-HW "Skip" Weldon
Columbia, SC

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B. Newman wrote:

- quote -

That is a 401(k) plan where the only eligible participant is
the owner--thus, it's a one participant 401(k). Until
recently while such a plan theoretically could have been
established, there was no advantage in doing so vs. using a
qualified plan funded entirely by "employer" contributions
(the limits were the same).

Now that employee deferrals to 401(k) plans are not treated
as employer contributions for purpose of the limitations on
deduction, a "solo" 401(k) makes sense for self-employed
individuals with the right fact pattern and income level.

There's still a point where they don't make sense because
they allow no more contribution than a simpler structure and
you must still be sure there would not be another covered
participant that could trigger a number of other issues--but
in the right circumstance, they do make a lot of sense.

--
Ed Zollars, CPA
Phoenix, Arizona

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"B. Newman" <bernardnewman[at]comcast.net> wrote:

- quote -

Recent tax law changes have made it practical for a self
employed person to open a 401k. Manulife calls it Indi 401k,
I believe NY Life calls theirs Solo401 and so forth.

Contact a good independent Financial Planner to get the details.

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My brother, who is self employed, said that he heard
something about a "401 solo". I have never heard of this. Do
any of you know what this is?

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