Self-employed? Don't forget to save for retirement? Owning your own business gives you the opportunity to forge your own path. Along with the freedom to work on your own terms and that includes your financial growth. While growing your business, you need to consider the future that you want in retirement. The drawbacks self-employment is that you have no employer-sponsored retirement plan and you must plot your own course for when saving for retirement. Fortunately, a 401(k) for the self-employed gives individuals four ways to save for the future. The top four providers of 401(k) plans for the self-employed include Fidelity Investments, John Hancock Retirement, Vanguard, and Merrill Edge. Read on to find out how these companies help self-employed individuals prepare for their financial future.
The adaptability of Fidelity Investments 401k plans gives you access to retirement professionals who can help you grow retirement funds. A wide range of investments gives you flexibility and contributions to your fund can be made by phone or mail. The tax benefits of a 401(k) are tax-deferred growth, taxable contributions, and pre-tax employee deferral contributions that will help you grow your business and your wealth for retirement.
Investment options with Fidelity Investments include investment opportunities with mutual funds, stocks, bonds, FDIC-insured CDs and ETF’s. One-on-one guidance is available in person, by phone or online along with research, tools will help you track your investments and make changes when you wish. Fidelity Investment 401(k) plans are only available to individuals who are self-employed or own their own business.
Another advantage of a 401(k) plan for the self-employed is that there are more options than if you are locked into an employer plan. John Hancock offers a Simplified Employee Pension (SEP) that is a popular choice for the self-employed. A SEP is simple and has high contribution limits, the opportunity to change your contribution percentage every year and it offers a maximum contribution of $50,000 or 25 percent of your compensation. There is a 10 percent tax penalty that applies to most money that is withdrawn before the age of 59 ½.
The SEP is not the only 401 (k) plan offered by John Hancock Retirement but it gives one of the highest contribution rates available for your personal investments. On the other end of the spectrum is the Traditional IRA that can give you an upfront tax deduction. Although contribution for 2016 is $5,500 if you are under 50 and $6,500 if you are over 50, a traditional IRA can give you an immediate tax advantage. John Hancock offers these two products and more for the self-employed.
Along with other 401(k) providers, Vanguard offers Individual IRA plans, and SEP-IRA and a Simple IRA plan that for the self-employed. Employee contributions of either pre-tax or Roth employee deferrals can contribute up to $18,000, per year, if you are under 50 and up to $24,000 if you are over 50. Contributions for this plan cannot exceed 100 percent of your earning compensation.
Merrill Edge
Individual or solo 401(k) plans allow you to take a tax deduction for contributions that come from your business while reducing your personal taxes. Reducing your tax liability is another advantage of a 401 (k) and there are an array of products that can help you with saving for the future and dealing with today’s tax liabilities. The Merrill Edge Individual 401(k) offers simple and straightforward pricing for the management of your investments, online access to your plan, 24/7, and educational resources to help you become as active in your investments as you are the growth of your business.
The Merrill Edge Individual 401(k) offers the added benefit of access to your money through a 401 (k) loan option, giving you, even more, flexibility with your money. The benefit of flexible contributions based on your cash flow and a contribution limits as high as $53,000. The easy online set-up can take less than 30 minutes so waiting until tomorrow to invest in your future is not necessary. Like most of the top 401(k) providers, the Merrill Edge plan offers help from a specialist who will gladly help you plan your future.