Ubiquity Solo 401k: A Comprehensive Guide

The Ubiquity Solo 401k is a popular choice for self-employed individuals and small business owners looking to save for retirement. It's a type of defined contribution plan that allows for higher contributions than traditional IRAs.

With a Ubiquity Solo 401k, you can contribute up to 20% of your net earnings from self-employment, plus an additional $57,000 in 2022. This means you can potentially save a lot more for retirement than with a traditional IRA.

One of the key benefits of a Ubiquity Solo 401k is its flexibility. You can choose to invest in a wide range of assets, including stocks, real estate, and even cryptocurrency.

A solo 401(k) plan is a great option for self-employed individuals and small business owners who want to save for retirement. You can contribute up to $22,500 ($30,000 if 50+) as an employee deferral/contribution, and your employer (i.e. you) can contribute another $43,500 into it for a total of $66,000 ($73,500 if 50+).

To be eligible for a solo 401(k), you must be self-employed, cannot have any employees apart from your spouse, and require an employer identification number (EIN) sanctioned by the IRS. This plan is ideal for folks with self-employment income, offering high contribution limits, a 401(k) loan option, and self-custody account.

Here are the key contribution limits for a solo 401(k) plan:

With a solo 401(k), you can contribute as both employee and employer, making it a powerful tool for retirement savings.

A retirement plan is a type of savings account that helps you prepare for life after work. You can contribute to it with pre-tax dollars, and the money grows tax-free until you withdraw it in retirement.

One popular type of retirement plan is the Solo 401(k), also known as an individual 401(k). It's designed for self-employed individuals, such as independent contractors or small business owners.

A Solo 401(k) allows you to contribute up to $22,500 per year, with an additional $43,500 contribution allowed if you're 50 or older, for a total of $66,000 or $73,500 if 50+.

To be eligible for a Solo 401(k), you must be self-employed and have no employees aside from your spouse. You'll also need an employer identification number (EIN) from the IRS.

Here are some key benefits of a Solo 401(k):

By understanding your retirement plan options, you can make informed decisions about your financial future and work towards a more secure retirement.

You can have multiple 401(k) plans, but it's rare to have three or more. Many doctors qualify to use two 401(k)s, one from their regular job and another from a solo 401(k) for moonlighting income.

Each 401(k) has its own maximum contribution amount, which can be split between different types of contributions. The total employee contribution to all 401(k)s and 403(b)s is capped at $22,500 ($30,000 for 50+), but each plan has its own $66,000 maximum.

You can contribute up to $66,000 to each 401(k) from an unrelated employer, made up of four types of contributions: employee tax-deferred contributions, employee tax-free contributions, employee after-tax contributions, and employer contributions.

Doctors who moonlight may open a solo 401(k) for their side income, but they usually just make employer contributions of up to 20% of their net income from self-employment to the solo 401(k).

Here are the four types of contributions that make up the $66,000 maximum for each 401(k):

A solo 401(k) is a great option for self-employed individuals and business owners who want to save for retirement. You can contribute up to $22,500 ($30,000 if 50+) as an employee deferral/contribution, and your employer (i.e. you) can contribute another $43,500 into it for a total of $66,000 ($73,500 if 50+).

To be eligible for a solo 401(k), you must be self-employed and have no employees apart from your spouse. You'll also need an employer identification number (EIN) sanctioned by the IRS.

You can contribute as both employee and employer to a solo 401(k) plan. As an employee, you can save up to $23,000 (plus a $7,500 catch-up contribution if you're over 50). As an employer, you can save up to 25% of your net self-employment income in profit-sharing contributions, up to $46,000.

If you have a spouse who earns income from your business, you can effectively double your solo 401(k) contributions as a family.

Here are the contribution limits for a solo 401(k) plan:

You can also consider a personal defined benefit/cash balance plan if you have a lot of self-employment income and want to save even more in a tax-deferred account.

If you find all of this overwhelming, consider hiring a professional to help you set up a solo 401(k) plan. Many solo 401(k) providers offer expert guidance to help you navigate the process.

To open a solo 401(k) plan, follow these steps:

1. Choose a solo 401(k) provider: Any online broker can help you set up a solo 401(k).

2. Fill out the forms: Complete an application and plan adoption agreement in exchange for an Employer Identification Number and a new account.

3. Set up contributions: Begin investing in mutual funds, index funds, exchange-traded funds, individual stocks and bonds, or certificates of deposit, as you like.

4. Be mindful of deadlines: Employee investments must be made by December 31st, but you have until the April 15th tax-filing deadline to make your employer contributions.

5. Fill out forms (again): Once your plan tops $250,000 in assets, you will need to fill out paper Form 5500-EZ or electronic Form 5500-SF every year.

6. Seek additional services: If necessary, you may opt for more holistic guidance or direct financial management assistance through your provider to meet your unique retirement goals.

The annual contribution limit for one-participant 401(k) plans is $69,000 for 2024, which includes both employee and employer contributions.

To calculate your contribution limits, consider your earned income, which is your net earnings from self-employment after deducting self-employment tax and contributions for yourself.

As a self-employed individual, you can make a special computation to figure the maximum amount of elective deferrals and nonelective contributions you can make for yourself. Use the rate table or worksheets in Chapter 5 of IRS Publication 560 to determine your allowable contribution rate.

The maximum employee contribution for someone under 50 is $22,500, while those 50+ can contribute up to $30,000. Employer tax-deferred contributions are limited to 20% of net self-employment income.

Here's a breakdown of the contribution limits for a solo 401(k) plan:

* Employee contribution limits:

+ Under 50: $22,500

+ 50+: $30,000

It's essential to consider your total contributions, not just your employee contributions, when determining your limits. As the business owner, you can contribute both as an employee and employer, making it possible to contribute up to $138,000 in a year if you have a working spouse.

A solo 401(k) plan is ideal for sole proprietors, freelancers, and independent contractors who want to save for retirement.

A one-participant 401(k) plan is sometimes called a Solo 401(k), Solo-k, Uni-k, or One-participant k. These plans have the same rules and requirements as any other 401(k) plan.

You can contribute to a solo 401(k) plan in both capacities as employee and employer. Contributions can be made to the plan in both capacities, and the owner can contribute both as an employee and as an employer.

Possible plans for a business owner include a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse.

Dr. Rodriguez, a 43-year-old neurologist, moonlights on weekends at a completely unrelated hospital where they are paid on a 1099 as an independent contractor, making another $100,000 per year. They contribute $20,000 as an employer contribution to the solo 401(k).

A solo 401(k) plan offers high contribution limits, a 401(k) loan option, self-custody account, and Roth and Traditional in one account. It's ideal for folks with self-employment income.

Here are some key features of a solo 401(k) plan:

Providers play a crucial role in making your solo 401(k) journey smooth. Ubiquity is one such provider that offers a fully customized solo 401(k) plan, starting at $228 per year.

Ubiquity provides a wide range of investment options, with over 33,000 mutual fund options to choose from. You can also opt for preselected options that suit your financial goals.

If you're already invested with Vanguard, you might want to consider their solo 401(k) plan, which offers low costs and a seamless integration with your existing accounts.

Ubiquity is a 401(k) plan manager that offers customized solo 401(k)s for sole proprietors and small businesses with up to 100 employees.

Their plans start at $228 per year, but it's unclear who might pay more than that.

Ubiquity gives business owners the option to choose from 33,000+ mutual fund options, or preselected options that suit their needs.

Business owners can also choose from investment flexibility and 3(38) fiduciary coverage, depending on their financial goals.

Ubiquity can help business owners optimize their plans for tax efficiency, including creating "safe harbor" and Roth 401(k) plans.

eTrade has been around since the 1990s.

It was once considered the top solo 401(k) option, allowing ETF investments through its brokerage feature and commission-free trades on many excellent ETFs and Vanguard mutual funds.

However, many users have complained about paperwork issues and poor customer service.

The company still offers a 401(k) loan feature, which is a unique benefit compared to Vanguard.

But, in my opinion, Vanguard now offers better service, making it my top recommendation over eTrade.

Vanguard is a popular choice for many investors due to its focus on low costs.

It's worth noting that Vanguard's IT interfaces and customer service can sometimes be lacking, but that's a trade-off for the low costs.

If you already have investments at Vanguard, you can see and invest in your 401(k) from the same login, making it a convenient option.

This is especially useful if you have a Roth IRA or taxable brokerage account at Vanguard, as you can manage everything from one place.

Years ago, Vanguard's solo 401(k) plan had some limitations, but those have been addressed.

For example, it's now possible to roll over an IRA into the plan, and you can use the lower-cost "Admiral" shares instead of the higher-cost "Investor" shares.

The standard Vanguard solo 401(k) plan allows Roth contributions, but it doesn't offer 401(k) loans or a real brokerage option.

I've had a solo 401(k) at Vanguard in the past, and I continue to have my brokerage, Roth IRA, and UTMA accounts there, which speaks to the company's reliability.

Ubiquity Solo 401k offers a flat monthly fee, which is a refreshing change from the percentage-based fees you might find with some 401(k) providers.

Their fees are transparent, and you won't have to worry about hidden charges or complex calculations. The company provides a range of services, including electronic participant statements, tax filing, and plan document preparation.

You can choose from four different plan options: Single(k) Solo 401k, Single(k)+, Saver(k) 401k, Custom(k) 401k, and Reserve(k) 401k. Each plan has a unique pricing structure, with setup fees ranging from $285 to $495.

Here's a breakdown of the costs for each plan:

Keep in mind that Ubiquity offers a custom plan, which can be tailored to your specific needs. This is a great option if you're looking for a more personalized approach to your retirement savings.