With the increased need for retirement income, it is important for self-employed business owners, incorporated or unincorporated, to seek the opportunities offered by a Sterling Trust Solo 401(k) Plan.
Sterling Trust's Solo 401(k) allows:
Offers Same Privileges as a Traditional 401(k)
Now owner-only businesses have the same privileges to save for retirement as offered by a traditional 401(k). Prior to 2001, self-employed persons could defer only 15% of their total income as a profit sharing or SEP contribution. This limit has increased to 25% of total compensation.
In addition, self-employed persons may save even more through the addition of a salary deferral option not previously offered to them. Self-employed persons may make a profit sharing contribution of up to 25% of their compensation and a salary deferral that is the lesser of 100% of compensation or $15,000. If age 50 or older by December 31, a catch-up contribution of $5,000 may be made for 2006.
For 2006, the combined total Solo 401(k) contribution can not exceed $44,000.
The increase to 25% of compensation and the addition of a salary deferral for self-employed persons allow for greater contribution limits at lower levels of income over that of other commonly utilized retirement accounts for owner-only businesses.