Maximizing Retirement Game: Who Can Rock the Individual 401(k)?

Hey there, fellow real estate rockstars! If you're hustling in the world of self-employment, you've probably heard whispers about the Individual 401(k). But what's the buzz all about? Let's break it down.

Unpacking the Power

Picture this: The Individual 401(k) is like the backstage pass to turbo-charging your retirement savings, thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Since its debut in 2002, this has been a total game-changer for small business owners, especially those flying solo or rolling with their ride-or-die spouse.

Riding the Unique Wave

Here's the kicker: The Individual 401(k) lets you crank up your contributions compared to other retirement plans, all while snagging sweet tax deductions. With a max contribution hitting $58,000 in 2021 or 25% of your income (whichever is less), you've got options. And get this: Your contributions come in two flavors - salary deferral and profit-sharing - giving you the flexibility to adjust based on how your business is rocking and rolling.

Doubling Down for Power Couples

Now, here's where it gets spicy: If you're in biz with your better half, you can double your contribution game. Yep, you heard that right. With a spouse on the payroll, you can tag-team your retirement savings, hitting those contribution limits hard and fast.

Making Moves in the Eligibility Game

For those of you rocking partnerships, fear not! The Individual 401(k) has your back. If it's just you and your partner in the mix, you're looking at a "single-participant plan," meaning less admin hassle and more focus on building your empire.

But hold up - if you start hiring common law employees who want in on the retirement action, your Individual 401(k) switches gears to a regular 401(k) setup. No sweat, though. Bring in a third-party administrator (TPA) to handle the nitty-gritty while you keep crushing it in your business.

Planning for the Big Leagues

If you're a solo act without W-2 employees, the Individual 401(k) could be your ticket to retirement stardom. Whether you're aiming to max out your contributions or eyeing up that sweet, tax-free 401(k) loan, this plan has got your back.

The Encore

So there you have it, folks! The Individual 401(k) is your backstage pass to retirement greatness. If you're ready to rock the world of self-directed retirement planning, hit us up. We're here to help you turn up the volume on your financial future!