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Retire Smarter with a Solo 401K

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If you’re self-employed, you may be eligible to take advantage of one of the most powerful retirement tools on the market. This plan is called a Self-directed Solo 401K (Solo-K) and it can help you save more for retirement than a traditional 401K.

June 18, 2020
Author: Amber Ornelas

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What’s a Solo-K and how does it work?

A Solo-K is an IRS-approved and qualified 401k plan. Designed for self-employed sole proprietors and owners of corporations or an LLC, a Solo-K follows the same rules and requirements as any other 401(k) plan. But unlike a traditional 401k, you’re allowed to make contributions as both the employee and the employer. As a result, there are very high contribution limits.

To be eligible to benefit from this plan though, you must meet two requirements:

  • The presence of self-employment activity.
  • The absence of full-time employees.

Better still, if you and/or your spouse are the sole owner(s) of the business, you can both contribute to your individual accounts!

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What are the advantages of a Solo-K?

  • Higher Contributions— Make annual contributions up to $54,000 with an additional $6,000 catch-up contribution for those over age 50.
  • Tax-And Penalty-Free Borrowing— Borrow up to $50,000 or 50% of your account value (whichever is less) for any purpose. You must pay back loans within 5 years.
  • Checkbook Control— 100% checkbook control over your retirement funds. Use what you need, when you need it. Simply write a check.
  • Easy Administration— You are the trustee of the plan.
  • Expanded Investment Options— You can invest in real estate, private lending, limited liability companies, precious metals, and more!
  • Exemption from UDFI— With a Self-Directed Solo 401k plan, you can use leverage to purchase real estate, which may be exempt from UDFI rules and UBTI tax.
  • Consolidate Accounts— You can transfer most of your other retirement accounts into your Solo-K. This includes you 401k from another employer, SIMPLE IRA, SEP IRA, 403(b), 457(b) or Traditional IRA). You cannot transfer existing Roth funds.

In conclusion

As a business owner, you don’t have to go the traditional route with a run-of-the-mill 401(k) or IRA. Consider opening a Self-Directed Solo-K LLC (Solo-K) instead, and let the experts here at Nevada Corporate Headquarters facilitate the process. 


If you’re ready to turn your dream business into a reality, look no further than Nevada Corporate Headquarters. From business entity formation to accounting and taxes, building business credit and estate planning, our comprehensive asset protection strategies are second to none and are proven to help businesses successfully launch and grow. Contact us today and go from business idea to open for business.

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