Shelter Additional $1,000 With New Solo 401k Contribution Limits
By Dmitriy Fomichenko, President and Founder of Sense Financial
"The difference between ordinary and extraordinary is that little extra." ~ Jimmy Johnson
If you're a player or sports fan, you understand the importance of 'extra' effort. When it comes to your financial lives, that little extra could help you grow your savings exponentially. The good news is that the IRS has announced new Solo 401k contribution limits for 2017, allowing you to save extra for retirement.
What are the new Solo 401k contribution limits?
In its latest retirement contribution limits' revision, the IRS has allowed small business owners and self-employed professionals save more for retirement.
New Solo 401k contribution limits for 2017: $54,000 ($60,000 with catch-up contributions for individuals above 50 years); up from $53,000 for 2016.
How does an extra $1,000 make a difference?
Example 1: Joe contributed $1,000 monthly to his retirement account, starting at age 30 until retirement. With an annual interest rate of 5%, compounded annually, Joe retired with a nest egg of $818,698.
Example 2: Michael contributed $1,083 monthly to his retirement account, starting at age 30 until retirement. With the same interest rate and compounding frequency as that of Joe, Michael ended up with $886,650 at retirement.
An extra $1,000 per year helped Michael exceed Joe's retirement savings by $67,952.
Four Reasons to start a Solo 401k plan in 2017
If you're planning to kick start your retirement savings, a self-directed Solo 401k might just be the right option for you. Seek professional advice when in doubt.
Dmitriy Fomichenko is President and Founder of Sense Financial, a leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. To learn more about the Solo 401k plan, please visit sensefinancial.com or email us at firstname.lastname@example.org.
More information on Solo 401k plans can be found by clicking here.
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