Self employed individuals and their spouses have the option of investing in an Individual or Personal 401k account in order to save for retirement. While a Personal 401k account is somewhat of a unique thing, many business owners find that they are easy, cost-effective options for owner-only small businesses.
As these accounts are not as well known as traditional employer sponsored 401k plans, you may have many questions about these types of accounts. What is a Personal 401k and who is eligible to participate? What does the application process entail and what are the features of the account? How do I get the most out of my personal 401k account?
Many people find it more affordable and convenient to use an online brokerage to open and maintain their Personal 401k account, and online brokerage ETrade offers no account minimums and a broad range of investment options. Research potential brokerages carefully to find the one that offers the features you need to achieve your investment objectives.
What Is A Personal 401k And Who Is Eligible To Participate?
A Personal 401k is a tax-advantaged 401k retirement account that is available to business owners and self-employed individuals that retain no other employees other than a spouse. This includes S-Corporations, corporations, partnerships, and sole proprietors.
A Personal 401k can also be referred to as Solo 401k, or an Individual 401k, and you can invest in either a traditional or Roth version. As each type of plan offers its own benefits and drawbacks, consult with a financial adviser to find out which account features are right for you.
“What should I look for when choosing a broker for my personal 401k account?” The choice of brokers for your account is important, as high fees and commissions can eat away at you investments. Online discount broker ETrade offers low commissions on trades, no account balance minimums and extensive research and support for all account holders.
What Is The Application Process For My Personal 401k Account?
The application process for a Personal 401k can be a bit long but straight forward. If you are using an online brokerage such as ETrade or Zecco, you can either download a Personal 401k application or request one to be send to you by mail.
You can either submit the forms online, or mail them in, and once your application forms have been received and processed your account will be open, and you can begin investing as you see fit. You can also use features such as Quick Transfer from ETrade, to make Personal 401k contributions from outside accounts in order to quickly and easily fund and execute trades in your account.
“How do I get the most out of my Personal 401k account?” Getting the maximum profits from your Personal 401k will depend on a variety of factors. Your choice of Personal 401k brokers will affect your choice of investments, and the fees and commissions on trades as well as account minimums should be carefully considered.
Choose a brokerage with a wide variety of investment options, as this will allow for greater opportunities for diversification and realized profits. Industry leader ETrade offers over 7,000 mutual funds, ETFs, and IPOs for you to choose from to maximize your chances for success.
Seek the advice of a trusted financial professional prior to committing any capital to a retirement fund. All investors are unique, and only you and your adviser can decide on the plan that is right for you.