Ubiquity

Solo 401(k) Provider

Start saving the self employed way with Ubiquity's easy, affordable solo 401(k) plan.

  • Invest in a wide range of investment options through a self directed brokerage account at any financial institution of your choice
  • Reduce your taxable income with Traditional or Roth options
  • Get access to funds through a loan option
Solo 401(k) plans starting at $18/month

Start saving the self employed way with Ubiquity's easy, affordable Single(k) plan.

Connect with a retirement expert

Self-employment is great for visionary, freedom-seeking entrepreneurs.

However, the dream has its drawbacks. Those who go it alone assume the entirety of the risk, the workload, and the tax obligation as both the employer and the employee. Plus, they don’t have the luxury of an employer-sponsored retirement plan to soften the blow at tax-time.

Opening a Solo 401(k) effectively solves this problem for those who qualify. With the right provider, solo business owners can start reaping immediate tax benefits, saving for the future, and enjoying greater financial flexibility at an affordable cost.

Should You Enroll In A Solo 401(k) Plan?

If you are a sole proprietor, freelancer, independent contractor, side-job worker, or solo entrepreneur, a Solo 401(k) is the ideal choice for retirement savings for the following reasons:

1. Huge Tax Deduction

Solo 401(k)s (and SEP IRAs) offer the highest maximum contribution limits compared to other self-employed retirement plans. If you have no plans to add employees to your business, then a Solo 401(k) makes sense. (Just keep in mind: if you’re taking out a Solo 401(k) for contract work done on the side of your regular job, the contribution limits apply per person, not per plan.)

What if you add employees? If you have a Solo 401(k) and add a full-time worker to payroll, you will no longer be able to contribute to your plan; while your account is “frozen,” you can still manage it and allow it to mature. If you do expand and wish to cover your employees, you may consider an alternative such as a SEP IRA, which will enable you to contribute 10% of your earnings, as well as 10% of each eligible employees’ earnings as well. Other options may make more sense, depending on your expansion needs.

2. No Taxes Now

You can opt for a “Traditional” Solo 401(k) during setup, meaning that you defer the taxes you pay at withdrawal time. In other words, the traditional solo model allows you to deduct a percentage of your taxable income for the year to reduce your tax burden. Or you may opt for a “Roth” Solo 401(k), which allows you to claim the lesser of your retirement contributions or 25% of your net self-employment earnings. If you’re worried about the tax rate climb in the future cutting into your retirement dollars, opt to pay your share of the taxes now.

3. Loan Flexibility

Generally speaking, it’s best to allow your retirement fund to grow over the years, but in a pinch, the money is available to you. Solo 401(k) account holders can borrow up to 50% of the plan value or $50,000 – whichever is less. This is a great perk for single business owners who may have limited resources available when financial times grow tough.

How does a Solo 401(k) work?

With a Solo 401(k), you contribute as both “employee” and “employer.” In 2020:

  • As Employee: You may save the lesser of up to $19,500, or 100% compensation, in employee contributions. If you’re over 50, you can add an additional $6,500 in catch-up contributions.
  • As Employer: You can save up to 25% of your net self-employment income in profit-sharing contributions.

Contributions are generally made on a pre-tax basis. However, some Solo 401(k) providers also offer a Roth 401(k) option that lets you invest some or all contributions on an after-tax basis, so that they are tax-free in retirement. The IRS considers “retirement age” to be 59.5. Any distributions taken out of the account beforehand may be subject to taxes and penalties.

If your spouse earns income from your business, you can effectively double your Solo 401(k) contributions as a family. On the employee side, you can contribute up to $19,500 for your spouse (plus the $6,500 catch-up provision, if eligible). On the employer side, you can make the plan’s profit-sharing contribution up to 25% for your spouse as well.

How to Open a Solo 401(k)

To get started, you’ll need to:

  • Choose a Solo 401(k) provider: Any online broker can help you set up a Solo 401(k).
  • Fill out the forms: Complete an application and plan adoption agreement in exchange for an Employer Identification Number and a new account. Choose between a Traditional or Roth plan.
  • Set up contributions: Begin investing in mutual funds, index funds, exchange-traded funds, individual stocks and bonds, or certificates of deposit, as you like.
  • 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.
  • 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.
  • 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.

Factors When Choosing a Solo 401(k) Provide

Owner-only businesses need a 401(k) provider that can meet their needs. Consider the following:

Plan Cost

  • Ideally, you’ll find a Solo 401(k) plan that has no Assets Under Management (AUM) fees or trading costs.
  • Ubiquity is the only small business 401(k) provider with a low, transparent, flat-fee model since 1999.

Easy Set-Up and Management

  • A user-friendly online dashboard is helpful for setup and long-term management.
  • You can set up a Solo 401(k) with Ubiquity online in about 15 minutes.
  • Once the plan is set up, investments can be made through Charles Schwab or another custodian.
  • You’re able to run online statements and reports at any time.
  • Online tools make it easy for you to select and manage investments.

Quality Support Service

  • Look for a plan backed by staff that supports you.
  • Some brokers offer online-only chat service. Ubiquity provides both online and phone support.
  • Just read some of the many reviews from other sole proprietors to get a feel for our level of service.

Flexibility

  • Can you make Roth contributions? (With Ubiquity – YES!)
  • Can you take loans from your plan? (YES!)
  • Do you have a range of investment choices? (YES!)
  • Can you choose from different families of funds? (YES!)
  • Are there sustainable investment options? (YES!) 

Fit Small Business named Ubiquity one of the 10 “Best Solo 401(k) Providers,” particularly for individuals who like the freedom to choose their own brokerage firm. Since our founding in 1999, we have helped more than 100,000 people invest more than $2 billion in retirement savings accounts.

Ubiquity creates the plan, facilitates contributions, provides customer service, administers loans if necessary, and offers tax form assistance for an additional fee. The price for our simple, flexible Single(k) plan is easily established online and is very affordable to manage.

Start saving, the self employed way.
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© 2020 Ubiquity Retirement + Savings
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44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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© 2020 Ubiquity Retirement + Savings
Privacy Policy
44 Montgomery Street, Suite 3060
San Francisco, CA 94104
Support: 855.401.4357

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