In this episode of Ask the Hammer, Jeffrey Levine of Buckingham Wealth Partners helps a reader evaluate whether to set up a SEP-IRA or a solo 401(k).
A SEP-IRA, according to the IRS, can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. A SEP does not have the start-up and operating costs of a conventional retirement plan and allows for a contribution of up to 25 percent of each employee's pay.
A one-participant 401(k) plan, sometimes called a solo 401(k), solo-k, or uni-k, isn't a new type of 401(k) plan, according to the IRS. It's a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse. And these plans have the same rules and requirements as any other 401(k) plan.
Got Questions? Email AsktheHammer@BuckinghamGroup.com.
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