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Tag: solo 401K plans

2011 IRA Limits

If you are under 50 years of age at the end of 2011, 2011 IRA limits contributions are $5,000 annually. For those 50 years of age or over at the end of 2011, contributions are $6,000. In both cases, there may be adjustments depending on your adjusted gross income. These totals may also be split between a traditional IRA and a Roth IRA.

401k transfer to IRA

Individual Retirement Accounts, also known as IRAs, are an investment vehicle that helps you prepare for your retirement. There are many types of IRAs available to investors, and the plan that you choose will be unique to your personal financial situation. All 401ks are government regulated retirement accounts that are offered through your employer. A new form of the 401k is called the Solo 401k plan and was uniquely designed for the small business owner. Self-directed IRA plans put you in control of your finances and your retirement planning instead of a custodian. If you have a 401k plan from your previous employer, you can start a 401k transfer to IRA. Once you have established a self-directed IRA, you have unlimited control.

What is a 401K?

In these stressful economic times, as people search for employment or college graduates head off to their first interviews, they will probably hear about 401k plans. Many will ask what is a 401k? The term is tossed about, but many do not have a good understanding of the topic. A 401k is a type of retirement savings account offered by many companies in which employees contribute part of their wages to this fund, allowing it to generate interest, and they are not taxed on those earnings until the funds are withdrawn at retirement age which is generally after age 59. In many cases, the employer matches or at least supplements the worker’s contributions. These plans are also known as IRA’s, or individual retirement plans. In self-directed IRA’s, the individual is able to make investments with his or her earnings, such as in stocks and bonds, to add to earnings and have a more ample retirement.

Self-directed IRA tax deferral solution

In searching for the optimum tax free investment, it becomes clear that the various forms of Individual Retirement Accounts (IRAs) offer distinct advantages. An IRA is available to the company-employed and self-employed. In traditional IRAs, contributions may be tax deductible, depending on income level, and investment earnings are tax deferred until withdrawn. Roth IRA contributions are not tax deductible, but qualified withdrawals are tax-free. Unlike Roth IRAs, traditional IRAs are subject to required minimum distributions at the age of 70 1/2.

Maximum 401k Contributions

A 401 (k) contribution is a savings account in the United States. that allows individuals to save for their retirement. Individuals can start to withdraw these funds after they reach 59-1/2 years of age. Restrictions may apply before that age. These types of plans were first widely adopted as savings retirement plans for workers in the U.S. at the beginning of 1980s. 401 (k) surfaced as a marginal to the traditional retirement pension that was paid by employers. Employer contributions to 401 (k) can vary, but overall the 401K was effective in shifting the burden for retirement accounts as well as savings to the workers themselves.

The Best 401K Plan

Gone are the days of the traditional 401K plans; today there is a better way to invest with your own 401K plan that is tax-free. That’s right, you can use your self-directed IRA funds to invest in nearly anything you wish, and it’s not only tax-free but also IRS-approved.