401(k) Account

Are You Planning to Set Up Your Solo 401(k) Account? Some Important Things You Should Know

As a private sector employee, you might be finding some great ways to invest your hard-earned money so that you can save for your retirement. During your research, you’ve come across a solo 401(k) plan and realized that this is one of the most effective options for self-employed individuals. 

Keep in mind that the current custodian prevents people from investing in real estate, crypto, tax lines, metals, etc. Now you need to ensure you’re taking control of your financial freedom. With the help of solo 401(k), you will be able to become your trustee, plan administrator, and custodian. 

However, you might be new in the world of self-funding retirement plans and therefore, you need to ensure you’re gathering more knowledge about the solo 401(k) plan. Here are some essential things you should know about the solo 401(k) retirement plan. 

Make Sure You Have a Business

If you want to be eligible for a solo 401(k) plan, make sure you’re an owner of a small business, an independent contractor, or a self-employed individual. Apart from owning a business, you need to showcase that your business has zero employees. Employees are known as people who work more than 1,000 hours yearly and get W2 wages. 

But what if you don’t have a business? Will you fail to leverage the benefits of solo 401(k)? You don’t need to worry as not all beneficiaries of a solo 401(k) plan are businessmen. You just need to make sure you’re contributing properly to your solo 401(k) account so that you can save money for your future. As per the Balance Money, when you have a business, you can become your own boss

Investment Strategy

Develop a Robust Investment Strategy

Make sure you conduct thorough research on different types of investment options that are available in the market. You can choose a solo 401(k) investment plan through numerous assets. Once you’re determined to go forward, you will be able to develop your investment strategy. This is one of the best advantages of solo 401(k) as you will have complete authority over your retirement plan. If you want to start contributing to your solo 401(k) account, make sure you click on this link here solo401k.com

Here are a few important questions you should ask yourself:

  • How can you diversify your portfolio?
  • What type of investment will prove most effective as per your retirement plans?
  • What goals do you want to achieve?
  • How can you reach your contribution goals?

Consider Roth vs. Pre-Tax

The contributions you make will become your powerhouse while setting up your solo 401(k) account. Keep in mind that while opening the solo 401(k) account, you will get to choose between a Roth sub-account and a pre-tax account. This will help you with another great aspect of financial freedom as per your retirement strategy. You are eligible to make Roth and pre-tax contributions, which will prove beneficial for your future and current tax deferrals. 

You also need to determine your maximum contribution per year in your solo 401(k) account. If you want to contribute money to your solo 401(k) tax-free, consider investing in a Roth solo 401(k). 


These are the essential pieces of information you needed to know about solo 401(k). If you have any more queries, make sure you ask us in the comment section below.

Are You Planning to Set Up Your Solo 401(k) Account? Some Important Things You Should Know was last modified: by