SBO401k and Individual 401k Plans
What is a Solo Business Owner 401k Plan™?
A retirement plan designed exclusively for Solo Business Owners with no employees other than their spouses.
What is the goal of an SBO 401k Plan™?
To reach the $49,000 maximum annual salary deferral and employer contribution limits under current law for individuals.
2009 SBO 401k Plan™ Features
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Investment Options
Unlimited. You choose either Self-Directed (must comply with Section 4975 of IRC Prohibited Transaction Rules) or Professional Management within a single custody account at the financial institution of your choice. -
Valuable Features
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Open investment architecture
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Loan: 50% of vested balance not to exceed $50,000
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No discrimination testing
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Consolidated assets from IRAs, other 401k accounts, etc.
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Eligible Employers
Businesses that employ owners, their spouses, and have no other employees who will be eligible to participate (includes corporations, partnerships, sole proprietors and limited liability companies). -
Eligibility
Age 21, no service requirement, immediate entry -
Plan Establishment Deadline
Company tax year end. -
Salary Contributions
Up to $16,500 (not to exceed 100% of compensation, $245,000 compensation limit for 2009) -
Catch-Up Contributions
Participants age 50 or older may contribute an additional $5,500 in salary deferrals beyond the $16,500, which does not count towards the overall contribution limit of $49,000. -
Employer Contributions
Up to 25% of compensation (earned income for self-employed, $245,000 compensation limit for 2009) or maximum $49,000 (total of salary deferral and employer contributions). -
Rollovers
Rollovers are allowed from SEP, profit sharing, defined benefit, 401k, 403(b), governmental 457 plans, and traditional IRAs and SIMPLE IRAs (SIMPLE IRA rollover eligible after two-year holding period is met.) -
Loans and Withdrawals
Loans are available (subject to IRS guidelines) to all participants, including unincorporated business owners. Withdrawals are limited to distributable events such as retirement, death or disability.
Pricing Information
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Set-Up Charge
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Plan Document and Adoption Agreement $375 (deductible)
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- Annual Maintenance Charge
- Plan Maintenance: $250 annually (deductible)
- Maintain Qualified Status of Plan
- Annual Accrued Participant Report
- Additional Services
- Employer Contribution Calculation: $125 annually
- IRS 5500-EZ preparation: $125 annually
- Loan fee: $175 per loan set-up; $50 annual maintenance fee
- Distributions $95
- Trust reconciliation for multiple accounts; $115 per hour (1 hr. min.)
- $50 charge per participant starting with 3rd life
Next Steps
If you would like to receive more information, contact Jeana Craft at 314.824.5209.