Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.


Does an individual 401(k) plan make sense for me?

These plans are appealing if you intend to sock away large sums - you can contribute up to $53,000 in 2016. 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, some 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 up to $400.