Save for the future while lowering your tax bill
The Single(k)® plan combines the simplicity of individual retirement savings with the flexibility and higher contribution limits of a big-business profit-sharing plan. You can lower your taxable income today while building your nest egg for when you are ready to retire.
Lower your taxes in three ways:
- Traditional solo 401(k) contributions: Contribute to your retirement savings using “pre-tax” dollars. You do not pay taxes on the income you contribute to your solo 401(k), lowering your annual tax bill. When you are ready to retire, you will pay taxes on the funds you withdraw.
- Roth 401(k) contributions: Contribute to your retirement savings using “after-tax” dollars. With a Roth 401(k), your contributions come from income on which you have already paid taxes. However, those investments can then grow tax-free, and you will not have to pay income taxes on them when you are ready to retire.
- Combine both: You can make some contributions using pre-tax income and some using after-tax income. Mix and match however you choose, up to the annual contribution limit. (See below.) Note: if you want to make both traditional and Roth 401(k) contributions, you will need to keep them in separate brokerage accounts.
Take advantage of high contribution limits and profit-sharing
When you choose a Single(k)® plan, you have the opportunity for much more tax-advantaged retirement savings each year than with a traditional individual retirement account (IRA).
For 2022, you can contribute up to $20,500, plus an additional $6,500 in “catch-up” savings if you are 50 or older. (If you are saving with a traditional IRA, the 2022 contribution limit is just $6,000, plus catch-up contributions of $1,000 for those 50 or older.)
With a Single(k)® plan, you also have the option to contribute up to an additional $40,500 in what’s called “profit-sharing” contributions.
(If you imagine a big-business 401(k) plan, where the employer also contributes money to employees’ retirement accounts, that is the employer portion.) As a freelancer or independent contractor, you are technically both the employer and the employee—so you can max out both kinds of contributions if you choose. If you do, that is a total savings potential of up to $57,000 in tax-advantaged retirement savings this year!
Simple 401(k) savings you can set up in minutes
When you are ready to start saving with a Single(k)® plan, you can set up your plan almost entirely online, in about 15 minutes. Unlike big-business 401(k) plans, you do not have to worry about plan testing, to qualify employees, or filling out mountains of paperwork. Just answer a few straightforward questions, and you are ready to go.
Once the plan is set up, you can manage your investments through Charles Schwab & Co., Inc., or any other brokerage or custodian you choose. You can run online statements and reports at any time. Moreover, if you need help submitting annual tax forms, we offer an optional service to assist with that too.
If you have questions, you can work directly with our customer support team, online or by phone, Monday through Friday from 8:30 a.m. to 5:30 p.m. Pacific Time.
Flexible investment options
With a Ubiquity Single(k)® plan, you can invest your retirement savings however you choose. You select the brokerage firm where you would like to keep your account. From there, you can invest in stocks, bonds, mutual funds—just like any other investment account. If you choose Charles Schwab & Co. or another custodian with online brokerage services, you can buy and sell investments in seconds with a few clicks of a mouse.
Borrow against your savings if you need to
Withdrawing funds from a 401(k) account before you retire is never a good idea—and carries hefty fees. However, one of the big-business benefits that Ubiquity Single(k)® plans bring to freelancers and self-employed business owners is the ability to take out loans against your retirement savings if you need to.
You can borrow up to $50,000 from your vested retirement account savings. For a general-purpose loan, you can pay yourself back over a loan term up to five years. If you are borrowing to purchase a home, you can pay yourself back over 30 years.
Start saving without breaking the bank
Ubiquity Single(k)® plans start as low as $215 per year, and we charge only flat fees—we never charge based on the number of assets in your account.
While Ubiquity does not charge asset-based fees, however, the funds and custodian you choose may charge for investment management services based on the amount of money in your plan. Because we work exclusively with small businesses and individuals, we only work with partners who charge the industry’s lowest asset-based fees for fund selection and investment management.
