Expert Retirement Planning

A Solo 401k is one designed specifically for self employed individuals who have no full time employees other than themselves and/or their spouse. Employee’s who work less than 1000 hours per year may also be excluded from the plan.
It is especially suited to individuals who can save large sums. Allowing you to save as both an employer and employee.
In most cases you can decide on how large you would like your contributions to be, and these sums are vested immediately. This is usually up to $102.000 a year. You can also reduce or suspend contributions if necessary.
You pay no income tax on plan contributions or earnings until you withdraw money from the plan. As with a traditional profit-sharing plan, your business can make a maximum tax-deductible contribution to the plan of up to 25 percent of your compensation. The plan has to be established by the end of the business tax year in order to make a contribution for that year.
These contribution possibilities aren't unique to solo 401(k) plans. Any business establishing a regular 401(k) plan and a profit-sharing plan could make similar contributions. But solo 401(k) plans are simpler to administer than other types of retirement plans. Since they cover only a self-employed individual or business owner and his or her spouse, solo 401(k) plans are not subject to the often burdensome and problematic administrative rules that apply to regular 401(k) and profit-sharing plans.
A solo 401(k) allows loan and hardship withdrawals as well as accepting rollovers of funds from another retirement plan, such as an IRA or a previous employer’s 401(k) plan.
Institutions offering solo 401(k) plans often provide limited investment choices. However, investment options are likely to increase in the future as demand for the solo 401(k) increases among small business owners.
A solo 401(k) may not meet your future needs. If your business grows and you hire a full-time employee who is not your spouse, that employee will generally need to be included in your plan. If that happens you no longer have a solo 401(k) plan; you have a regular 401(k) plan and profit-sharing plan, and you lose the benefit of the solo 401(k) plan's simplified administration rules.
A good source of information for individuals considering setting up one of these plans is 401khelpcenter.com. It provides general information and calculators as well as links to investment companies and banks that offer solo 401(k) plans.