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Solo 401k & Solo Cash Balance Retirement Plan 2023 Contributions Limits

Updated: May 3, 2023

If you are self employed and looking for a saving and investment option that will permit you to fund larger contributions than what is possible through and IRA, SIMPLE IRA or SEP, a SOLO 401k can accept contributions of up to $66,000 for 2023 and up to $73,500 if your age is 50 plus. There is also a SOLO(k) Cash Balance Combo option that allows you to contribute up to $260K for under 50 and $360K for 50 plus years of age.

Considerations and options for a Solo 401(k)

  • You can have Flexible funding options

  • Tax savings You can reduce your taxable income and be a better savor

  • Plan loans You can borrow up to 50% of the vested account balance with a maximum of $50K Loan withdrawals are not currently taxed as long as loan repayments are made timely.

  • Account aggregation to simplify the management of all your retirement accounts

  • Investment flexibility invest in stocks, EFT, alternatives investments and other assets classes

  • Creditor protection contribution are help

  • Pre-tax or or Roth option

  • Spousal contributions

Other considerations. To avoid overfunding, non-deductible contributions, it is important to work with your advisor and particularly the record keeper to prevent an excess limit situation.

SOLO Cash Balance can generate tax deductions of up to $150,000 or more per year. This special type of tax-qualified retirement plan that provides participants with a promised retirement benefit on reaching retirement age. While there Cash Balance plans that make sense for small businesses that seek to maximize their contributions, this plan design is more for highly compensated solo-entrepreneur's seeking to maximize their savings. This type of retirement plan is considered a Defined Benefit and an annual contribution is generally required to ensure the plan has enough assets to pay participants their promised benefit.

Who could benefit from a retirement plan like this? Really any professional filing a Schedule C would benefit from this type of retirement planning. List of likely professionals

  • Physicians

  • Accountants

  • Attorneys

  • Consultants

  • Brokers

  • Realtors

Need help, book a 15 complimentary consultation to see if this could be a good fit for you and your business.

maximum retirement savings 2023
Maximum retirement contributions 2023

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