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Solo W-2™Powerful Roth 401(k) Retirement Savings Plan

The Perfect 401(k)

The incredibly powerful Solo W-2, Inc. Roth 401(k) Retirement Savings Plan with 200% employer match (funded by the revenues that you generate) lets you load your tax-deferred retirement account up to the absolute IRS limits much faster and with lower gross revenues than a typical self-employed person can. Read about the amazing Solo W-2, Inc. $81,000 advantage in the Solo W-2 Blog.

Key features of the Solo W-2, Inc. Roth 401(k) Retirement Savings Plan include:

  • Automatic enrollment.

  • Immediate vesting.

  • Contribute in 2009 up to IRS maximum of $49,000 ($54,500 if age 50+).

  • Total contributions may equal 100% of your gross wage up to IRS maximum.

  • Roth 401(k) option allows tax-free retirement distributions.
 

The Solo W-2, Inc. Roth 401(k) Retirement Savings Plan Has Three Parts
  The Solo W-2, Inc. Roth 401(k) Retirement Savings Plan employs three contribution channels to maximize the tax-deferred contributions to your retirement plan.
 
 
Safe Harbor Contribution
The mandatory (safe harbor) contribution level for each division is 3% of gross wage. This safe harbor contribution assures that every Solo W-2™ employee may contribute the maximum amount to their 401(k) retirement savings account. All Solo W-2™ employees participate automatically at this level.
 
Employee Contribution
You may elect to contribute an additional 0% to 100% of your gross wage as an elective deferral to your 401(k) account up to the IRS maximum. The elective deferral triggers a matching employer contribution from your division.
 
Matching Contribution
Your Solo W-2™ division will match your elective deferral at the rate of two to one (200%) and contribute that amount as an additional employer contribution to your 401(k) account.
 

Maximum Annual Contribution Limits
  The Solo W-2, Inc. Roth 401(k) Retirement Savings Plan takes full advantage of the generous IRS contribution limits so that you can load your retirement account faster and with more tax-deferred dollars than a typical corporate employee can.
 
 
Elective Deferral
You may contribute as a payroll deduction up to 100% of your gross wage up to the IRS maximum elective deferral in 2009 of $16,500 ($22,000 if age 50+).
 
Total Contributions
The combined maximum for employer and employee contributions in 2009 is $49,000 ($54,500 if age 50+).
 

Accelerated Contributions
Your 401(k) account may receive combined contributions up to 100% of your YTD gross wage up to the IRS maximum. This means that, as a Solo W-2, Inc. employee:

  • You may contribute in 2009 the IRS maximum of $49,000 to your 401(k) account on as little as $49,000 in gross wage.

  • Or, if age 50+, contribute $54,500 on as little as $54,500 in gross wage.
 

Additional Facts
 
 

Reporting the Employer and Employee Contributions

  • Employer contributions from your Solo W-2™ Division are reported as a division expense on your Division Report.

  • Employee contributions are reported as a payroll deduction on your pay stub.
 

Two Investment Options

  • Managed Funds Portfolio – Unless instructed otherwise, Solo W-2, Inc. will make tax-deferred contributions into a professionally managed, risk-adjusted portfolio of 19 mutual funds offering optimal diversification and security.

  • Opt-in Self-directed Account – Alternatively, you may instruct Solo W-2, Inc. to make tax-deferred contributions into a self-directed brokerage account where you may select from a wide universe of load and no-load mutual funds, plus stocks and bonds available on the major exchanges.
 
No Waiting Period
There is NO waiting period to join the plan. Solo W-2, Inc. enrolls you in the plan when you join. Your division makes tax-deferred contributions to your 401(k) account with your first payroll.
 
Immediate Vesting
Employee and employer contributions to your 401(k) account are vested immediately.
 
100% Participation
All Solo W-2™ new employees are enrolled automatically and all Solo W-2™ employees participate in the plan.
 
Applicable Fees
Compare these very modest fees with the cost of setting up and maintaining a tax-qualified retirement plan on your own.
  • Annual Fee: $74 per employee when you join Solo W-2, Inc. and at the beginning of each year thereafter.

  • Rollover Contribution: No charge to roll funds from another tax-advantaged retirement plan into your Solo W-2, Inc. 401(k) retirement account.

  • Loan Fee: $50 upon approval of the loan from your 401(k) account.

  • Termination Fee: $25 to roll over the funds in your Solo W-2, Inc. 401(k) account to another institution or to cash out completely when you terminate your employment with Solo W-2, Inc.
 

Overview of Roth 401(k) Option
  The Solo W-2, Inc. Roth 401(k) represents a unique combination of features of a Roth IRA and a traditional 401(k) plan. Under the Solo W-2, Inc. Roth 401(k), employees may contribute funds to a Roth account on a post-tax elective deferral basis, in addition to, or instead of, pre-tax elective deferrals to a traditional 401(k) plan account.
 
 

Allows Tax-free Retirement Distributions

  • Elective deferrals to a traditional 401(k) account are made with pre-tax dollars. Investment growth is tax-deferred, and retirement distributions are taxed as ordinary income.

  • Elective deferrals to a Roth 401(k) account are made with after-tax dollars. Investment growth is tax-deferred, and qualified retirement distributions are tax-free.

  • The Solo W-2, Inc. Roth 401(k) Retirement Savings Plan has a Roth component, giving you the flexibility to designate your 401(k) elective deferrals from wage as:

    • Traditional (pre-tax) 401(k) contributions.

    • Roth (after-tax) 401(k) contributions.

    • Or a mixture of both Roth and traditional.

  • Only elective deferrals may be made to a Roth account. Employer contributions, including the 3% safe harbor contributions and matching contributions, are pre-tax by their nature, and must be made as tax-deferred contributions to a traditional 401(k) account.
 

More Advantages of the Solo W-2, Inc. Roth 401(k)

  • You can contribute more to a Roth 401(k) account than to a Roth IRA. As of 2008, it appears that the maximum contribution limit to a Roth IRA in 2009 will be $5,500 ($6,500 if age 50+). The maximum contribution limit to a Roth 401(k) account in 2009 is $16,500 ($22,000 if age 50+); in other words, you may contribute your entire elective deferral to a Roth 401(k) account.

  • Unlike a Roth IRA, a Roth 401(k) has no Adjusted Gross Income limitation. You can make Roth 401(k) contributions regardless of how much money you earn.

  • Roth 401(k) contributions grow tax-deferred, but withdrawals of contributions and investment growth are tax-free, provided the recipient is at least age 59.5 and the account has been held for at least five years.

  • A Roth account provides a one-third higher tax shelter value for an employee who is taxed at a 33.33% rate both today and at the time of a future distribution from the 401(k). The Roth is even more valuable if there is a risk of higher taxes on retirement distributions, however the opposite is also true.

  • Roth investments provide tax-free retirement income during years when your tax rate may be high.
 

Solo W-2™ Roth 401(k) Support Services
 
 

Securian Financial Services

  • Solo W-2, Inc. has partnered with Securian Retirement to offer this very aggressive 401(k) Retirement Savings Plan, which is specifically designed for highly compensated employees.
 

Online Access Twenty-four Hours a Day, Seven Days a Week

  • Solo W-2™ employees may access their plans through a dedicated Internet site at www.securianretirementcenter.com and check the status of their investments online at any time.

  • Solo W-2™ employees may also call (800) 233-2881, enter their Social Security number and press * (the star key) to speak with a Customer Service representative.
 

Free Financial Advice

  • Solo W-2, Inc. has appointed Wayne C. Deutscher, CLU, ChFC to assist employees of Solo W-2, Inc. with their Solo W-2, Inc. Roth 401(k) Retirement Savings Account and with their personal finances.

  • This service is available at no charge to Solo W-2™ employees.
 


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