Does an individual 401(k) plan make sense for me?
- What's an individual 401(k) plan?
- When are individual 401(k)s a good deal?
- Who can contribute to one?
- When can I get access to the money?
- What if I need the money before retirement?
- How should I invest the money?
- How do my withdrawals get taxed in retirement?
- Does an individual 401(k) plan make sense for me?
- Who can help me set up and administer a plan?
These plans are appealing if you intend to sock away large sums - you can contribute up to $46,000 in 2008. But 401(k) plans require more paperwork than SEP IRAs. If your account balance exceeds a certain amount, you have to file a special tax return for the plan, which can add slightly to tax-preparation costs and hassles.
In addition, many of the firms that will help you set up a solo 401(k) account levy setup charges (typically $100 to $375, depending on the level of service and the size of your account) as well as annual fees of $10 to $250.
