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When are individual 401(k)s a good deal?

These plans are ideal if you intend to sock away large sums. An individual 401(k) allows you to save for retirement both as an employer and an employee, often enabling you to contribute more than would be possible with other retirement plans.

Here's how: As an employee, you can stash away as much as $16,500. As the boss, you can contribute an additional 25% of compensation, up to a maximum of $49,000, including your employee contribution.

These contributions are discretionary, so you can save the maximum in flush years and nothing in tougher times. If you and your spouse are both in the plan and enjoy a banner year, you could save a total of $98,000. And if you are both 50 or older and eligible for catch-up contributions of $5,500 each, the total climbs to $109,000.

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