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Individual 401(k)s
By: Rich Giangregorio
The best retirement plan for one-person businesses
Individual 401(k) is a new small-business retirement plan option, possibly the best retirement plan now for one-person businesses. With it you can contribute as much as 100% of the first $14,000 you make ($18,000 if age 50 or over) plus 25% of total compensation-up to $42,000 total (or $46,000 if age 50 or over). Contributions are deductible and earn tax-deferred investment returns in the account.
Payoff: If you run a one-person business as a sideline, you can contribute 100% of the income earned from it-up to $14,000 (or $18,000). Consult your tax adviser or investment professional.
