Owners-Only 401(k)

The owners-only 401(k) offers the high contribution limits and flexible investment strategies of a traditional 401(k) to owner-only businesses.

Benefits of establishing an owners-Only 401(k)

In addition to the benefits of traditional 401(k) plans – including tax-deductible contributions, tax-deferred earnings, flexible contribution requirements and a variety of investment options – and the higher funding limits, owners-only 401(k) plans offer:

Catch-up contributions

Those 50 and older can add an additional funds to their 401(k) contributions.

Tax-free loans

Although 401(k) plans are designed for retirement savings and can grow faster if the funds are left untouched, the owners-only 401(k) includes a provision that allows you to borrow from your account if you need quick access to funds.

Consolidation of multiple accounts

Most retirement plan assets, including funds from profit sharing and money-purchase plans, and both traditional and SEP IRAs, can be transferred into your owners-only 401(k).

Spousal benefits

While this type of plan is specifically for businesses with no employees, you and your spouse can participate if you both are employed by and receive compensation from the business.

No discrimination testing requirement

Because you don’t have employees, you are not limited by employee contribution restrictions and can, therefore, maximize your contribution.

Roth contributions

Individuals who cannot make contributions to a Roth IRA because of income limitations can now make Roth contributions inside their 401(k) plans. SIMPLE IRAs do not allow for Roth (after-tax) contributions.

Taking the next step

To learn more about the owners-only 401(k), contact your Raymond James financial advisor.