Solutions for Business Owners

Roth Solo 401(k)

The Individual 401(k) has the option to be set up with the added benefit of Roth-like tax-advantages.

Contribution limits to the Roth Individual 401(k) are the same as the Individual 401(k), but you designate them as Roth contributions. Those contributions won’t be eligible for a tax-deduction, but qualified withdrawals from the Roth Individual 401(k) are tax-free.

Advantages:

• Investments can compound tax-free
• Higher contribution limits for tax-advantaged retirement investing
• Opportunity to maximize contributions through employee and employer contributions

SIMPLE IRA

Savings Incentive Match Plan for Employees (SIMPLE) is a plan for small businesses, typically with 100 or fewer employees, that have no other retirement plans.  With a SIMPLE plan, contributions are tax deductible and compound tax-deferred until withdrawn, pending that the distribution is taken after the account holder reaches 59 ½ years of age. Additional information related to SIMPLE accounts can be found here.

Advantages:

• Less complex and costly than a 401(k)
• Contribution limits are higher than individual retirement accounts and grow tax-deferred, without being subject to capital gains or income tax
• Employees are always 100% vested in (or, has ownership of) all SIMPLE IRA money