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A Solo 401K – Right Retirement Verdict for Attorneys

A Solo 401K Plan, also known as an Individual 401K or Self Directed 401K offers a self employed business owner, such as a lawyer or attorney the ability to use his or her retirement funds to make almost any type of investment, including real estate, tax liens, private businesses, precious metals, and foreign currency on their own without requiring custodian consent tax-free! In addition, a Solo 401K Plan will allow an attorney to make high contribution limits (up to $54,500) as well as borrow up to $50,000 for any purpose. The Solo 401K Plan is perfect for a sole practitioner attorney who is looking to save for their retirement while taking control of their retirement funds.

The Solo 401K Plan offers a solo practitioner lawyer far more retirement, tax, and investment options than a Traditional IRA, SEP, or SIMPLE IRA. A Solo 401K plan offers the same advantages as a Self Directed IRA LLC, but without having to hire a custodian or create an LLC.

The Solo 401K plan is unique and so popular for sole practitioner attorneys because it is designed explicitly for small, owner only business. There are many features of the Solo 401K plan that make it so appealing and popular among self employed business owners, such as a sole practitioner lawyer. The following chart will illustrate the advantages for a self-employed attorney of using a Solo 401(k) Plan:

Solo 401K Chart

In addition, the following example clearly illustrate the advantages of using a Solo 401K Plan over a Traditional IRA and SEP IRA.

Steve who is a doctor earns a $100,000 a year. Steve is 45 years old and the sole shareholder of an S Corporation called ABC, Inc. Steve is the sole owner and employee of the corporation. Steve wishes to make the maximum mount of tax-deductible contributions allowed by law. If Steve had used a Traditional IRA he would be able to make a tax-deductible contribution of just $5,000. Whereas, if Steve had used a SEP IRA as the retirement vehicle, he would have been able to make a tax-deductible contribution equal to $25,000 (25% of $100,000). However, if Steve had established a Solo 401K Plan, Steve would be able to make a tax-deductible contribution of $36,500 ($16,500 as an employee and a corporation profit sharing contribution equal to 25% of Steve’s compensation). Thus, it is clear that the Solo 401K plan offers a self-employed physician the greatest retirement benefit. In addition, a doctor would be able to borrow $50,000 of 50% of their account value and use that loan for any purpose while having the ability to invest in real estate and other investments tax-free and without custodian consent. Moreover, the Solo 401K Plan account can be opened at any local bank, such as Wells Fargo or Chase. A doctor would be able to roll over his former 401K or IRA funds to the new Solo 401K Plan tax-free (only Roth IRA or after-tax 401K funds are not permitted to be rolled into a Solo 401K Plan).

To learn more about the advantages of using a Solo 401K Plan, please contact a 401K expert at 800-472-0646 or visit

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