How can I start my own 401k plan if my employer does not offer it?

How can I start my own 401k plan if my employer does not offer it?
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#1

Hi There. I worked for a company that was offering 401K. But I never took advantage of it. Now, the company got bought out, now this new company does not offer any plans of this type. I would like to know what are my options. If possible please provide links, companies that provide solo 401k account and any info that could help me.
Thank you very much.


#2

You have to own your own business to set up a SOLO 401k plan. However, what you can do is to start a Traditional IRA (TIRA) or a Roth IRA. These are personal accounts that you control yourself and you can set them up through any online broker. My preference is the Roth because grows totally tax-free and does not require RMDs (Required Minimum Distributions) beginning at age 70.5. If you are under age 50, you can contribute up to $5,500 annually to either or split your contributions between them. If you are at least age 50, you can contribute another $1,000 per year.

I hope your new employer starts a SIMPLE IRA or a 401k soon. You might mention the SIMPLE to him/her as it costs much less for the employer to manage and can be a stepping stone to a 401k in the future.

Good luck and I hope this helps!


#3

If you are a W-2 employee of the new company, and have no outside source of additional earned income, your only tax favored retirement savings alternatives are conventional or Roth IRA's. If you have earned income from a part time job or profitable hobby, you can open a retirement investment vehicle funded with the income from that source. That sideline must earn a profit prior to using any of that income to fund a retirement account.

Other than IRA's, your best option is to open a taxable investment account and manage it prudently to accumulate additional funds for retirement.

Hope this has been helpful.


#4

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