By Freelance Contributor | Strong Female Leaders | Reading Time: Five Minutes

Are you self-employed and do you want to save up for retirement? You might consider investing in the Solo 401K. The program is designed specifically for solo-entrepreneurs with one or two employees and offers many benefits. Scroll down for more information including the Solo 401K's benefits, how it works, and what questions you should ask your financial advisors.

Solo 401K: Is It for You?
1. Why should you invest in a Solo 401K?
If you are self-employed with one or two employees or have a side gig, then you qualify for the solo 401K. There are many benefits to investing in a solo 401K. For one, you are allowed to contribute more than an employer-sponsored 401K and an IRA. With a Solo 401K, you can contribute as both an employee and an employer. As an employee, in 2022, you can contribute up to $20,500 per year. As an employer, you can contribute up to 25% of your total annual compensation. Additionally, if you are 50 or older, you are allowed up to $6,500 per year of catch-up contribution. All of these are pre-taxed money that will compound in your account.
Another benefit is that there are no age or income restrictions for opening an account. It's a great fit for entreprneurs of all ages.
Last but not least, if your business is incorporated, you can expense your contributions as a business expense. This can give you a nice tax break.
2. How to open a Solo 401K account and maximize your investments?
Like with any investment account, your best first step is to choose a well-known financial institution and speak with an advisor. Any of them will be happy to assist.
3. What are some of the questions you should ask your financial advisor?
Questions about opening a Solo 401K account include application fees, hidden fees, roll over questions, investment options such as mutual funds, ETF's, stocks, bonds and CD's, and various tools that will help you maximize your earning potential.
As with employer-sponsored 401K programs, the solo 401K will discourage you from early withdraw, unless you experience hardships. You would want to clarify with your financial advisor regarding such conditions.
Parting Thoughts
If you've made it this far in today's article, you most likely already know if a Solo 401K is for you or not. If you are a solo-entrepreneur, then you most likely are certainly considering it seriously. We leave you by congratulating you on being a solo-preneur, because it is one of the hardest jobs yet. You are constantly taking care of your business, clients and wear many hats. But first, you need to take care of yourself and especially your future self. So good luck with everything and may you prosper.

1) Solo 401(k) In a Nutshell

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