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Individual 401(k) Plans allow self-employed, or owners with a spouse employee, tax-deferred retirement savings. Plus, contributions are deductible business expenses.

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Benefits

  • Larger contribution limits compared to other plans
  • Owner contributes as employer and employee, benefiting from both
  • Contributions are a deductible business expense
 

Who Contributes1

  • As Employer: Discretionary, up to 25% of compensation up to $54,000*, whichever is less.
  • Employee Contributions: Roth or Pre-tax 401(k) up to $18,000*
  • Employees Age 50+: Additional catch-up contributions up to $6,000

*Limits listed are for 2017. The IRS sets limits annually.

Plan Details

Deadline to establish

Last day of the business’s fiscal year, usually December 31

Eligible Employers

Self-employed individuals or business owners with only a spouse employee

Participant Fee

Annual $25 service fee which is deducted from participant accounts
 

Plan Administrator Responsibilities2

  • Complete Summary Plan Description
  • File annual IRS Form 5500 once plan assets reach $250,000
  • Distribute applicable employee notices and disclosures
  • Distribute annual 404(a) Participant Disclosures
 

Investment Options

Support & Guidance

  • Wide range of no-load mutual funds available
  • One-on-one guidance, plus education and tools to help you and your employees plan for retirement 
  • Easy online access to track investments and make changes
  • Secure Plan Sponsor Access website for convenient management
  • Distribution services available for tax reporting
 

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1 Contributions may only be based on the first $270,000 of compensation as adjusted.
2 Additional employer responsibilities apply.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

Diversification does not assure a profit nor does it protect against loss of principal.