Independent 401(k)

Filed Under » , ,
Dictionary Says

Definition of 'Independent 401(k)'

A 401(k) plan set up for an individual running a sole proprietorship or a small business with a spouse/immediate family member. Plan contribution limits for the individual are equal to a typical company-sponsored 401(k), but the sole proprietor can also make an employer contribution to an independent 401(k), thereby raising the total contribution allowed. 

The independent 401(k) may also be called a "solo 401(k)" or an "indie K".
Investopedia Says

Investopedia explains 'Independent 401(k)'

As with standard 401(k) plans, catch-up contributions are allowed for those above age 50 who have indie 401(k)s - up to $5,000 in 2006. Contributions made to the plan as an employer are also tax-deductible, which can help to save the sole proprietor a great deal in taxes.

The independent 401(k) offers many of the same features as a Keogh plan or an SEP IRA, but an independent 401(k) can be cheaper to establish and maintain, and loans are often allowed against an independent 401(k).

The major drawback to the independent 401(k) is that no outside employees can be hired, or the window of applicability closes.  

Video Definition

Search results for

'Independent 401(k)'

  • Independent 401(K): A Top Retirement Vehicle For Sole Proprietors

    http://www.investopedia.com/articles/retirement/10/individual-401k-sole-proprietor.asp
    Independent 401(K): A Top Retirement Vehicle For Sole Proprietors. June 16 2010 |
    Filed Under ยป IRA, Retirement, Retirement Plans. The SEP-IRA is dead. ...

  • When Paying Off Debt With Your 401(K) Makes Sense

    http://www.investopedia.com/articles/retirement/10/paying-off-debt-401k.asp
    ... (If you're self-employed, make sure you read Independent 401(K): A Top Retirement
    Vehicle For Sole Proprietors.) Depending on the conditions of your plan, you ...

  • I have a small business (LLC), which I operate part-time. I also ...

    http://www.investopedia.com/ask/answers/07/401k-LLC.asp
    ... company for which you work full-time and the only relationship you have with the
    company is as an employee, you can establish an independent 401(k) for your ...

  • Saving For Retirement When You're Not Working

    http://www.investopedia.com/articles/retirement/09/vehicles-save-retirement.asp
    ... The Solo 401(k) The solo 401(k), also known as the independent 401(k), is for
    individuals who are self employed, either as sole proprietors, independent ...

  • Should You Roll Over Your 401(k)?

    http://www.investopedia.com/articles/retirement/12/should-you-roll-over-your-401k.asp
    ... such as those that use sophisticated investment platforms offered by money management
    firms may not be available in an independent IRA. A 401(k) and other ...

  • The State Of The 401(k) - Investopedia.com

    http://financialedge.investopedia.com/financial-edge/0711/The-State-Of-The-401k.aspx
    ... future of Social Security has reemphasized the importance of independent savings
    for ... their chances in not offering employer matching for 401(k) programs, or ...

  • How To Get The Most Out Of A 401(k) Program

    http://www.investopedia.com/articles/retirement/11/get-most-out-of-401k.asp
    ... Your 401(k) Match.) Watch the Costs As part of some employee retirement plans, workers
    can avail themselves of investment advice from independent professionals ...

  • Is Your 401(k) Administrator Competent?

    http://www.investopedia.com/articles/retirement/10/competent-401k-administrator.asp
    ... the one who set up the plan originally, and in others, it is an independent party. ...
    Find out why in The 4-1-1 On 401(k)s.) Solutions for Employees Employees who ...

  • 401(k) Predators: Don't Become Prey

    http://www.investopedia.com/articles/retirement/09/401k-predator.asp
    ... How can you protect your 401(k) from predatory advice? ... According to the Financial
    Industry Regulatory Authority (FINRA), the largest independent regulator for ...

  • Top 4 Reasons To Save For Retirement Now

    http://www.investopedia.com/articles/retirement/07/noexcuses.asp
    ... for a Roth IRA or work for an employer that offers Roth 401(k)/403(b ... effect of growth
    could be your ticket to a financially secure and independent retirement. ...

Related Articles

Bank Rates
Product Today Last Wk
$10K MMA 0.50% 0.51%
MMA 0.45% 0.46%
6 Month CD 0.46% 0.47%
1 Year CD 0.70% 0.75%
5 Year CD 1.46% 1.46%
1 Year Jumbo CD 0.66% 0.67%
Rate data provided by Bankrate
Product Today Last Wk
$30K HELOC 4.59% 4.60%
$30K Home Equity Loan 5.74% 5.77%
$50K Home Equity Loan 5.45% 5.50%
$50K HELOC 4.24% 4.24%
$100K Home Equity Loan 5.41% 5.46%
$100K HELOC 4.13% 4.13%
Rate data provided by Bankrate
Product Today Last Wk
30 Year Fixed 3.80% 3.80%
15 Year Fixed 3.09% 3.11%
1 Year ARM 3.54% 3.53%
30 Year Fixed Jumbo 4.38% 4.38%
5/1 ARM 2.65% 2.69%
3/1 ARM 2.69% 2.69%
Rate data provided by Bankrate
Product Today Last Wk
60 Month Used Car Loan 4.51% 4.51%
48 Month Used Car Loan 4.35% 4.35%
48 Month New Car Loan 3.24% 3.24%
36 Month Used Car Loan 4.34% 4.36%
36 Month New Car Loan 3.11% 3.13%
60 Month New Car Loan 3.35% 3.34%
Rate data provided by Bankrate
Partner Links