An Individual 401(k)—or Individual(k)TM—is a retirement plan designed for owner-only organizations that can maximize your savings if you're self employed, allowing you to contribute as both the employer and the employee.
The Ascensus Individual(k) with Vanguard investments is available for:
Review the contribution limits and key highlights below to determine if the Individual(k) featuring Vanguard investments is the best fit for your business. This plan allows both pre-tax and Roth (after-tax) contributions.
Employers can contribute up to 25% of compensation, not to exceed $69,000 for the 2024 tax year.
Employees can defer 100% of their compensation, up to $23,000 for the 2024 tax year ($30,500 for employees age 50 or older). Roth contributions are accepted.
As a business owner, you can contribute both as an employer and employee. The combined amount of employer plus employee contributions can’t exceed $69,000 for the 2024 tax year ($76,500 if age 50 or older).
With the Ascensus Individual(k) featuring Vanguard investments, you can choose from a variety of Vanguard mutual funds.
There is a $20 annual fee per Vanguard fund per account holder in this Individual(k) plan and a $20 annual fee per participant for custodial services.
Setup
To establish an Individual 401(k) plan, an employer identification number (EIN) is required. If you do not have an EIN, you can apply for one online at IRS.gov.
Maintenance
For one-participant plans, annual filing of IRS Form 5500 is required once the plan's assets reach $250,000 at the end of your plan year or you terminate your plan. We'll provide you with information each year to help you complete the form.
Plan administration may require occasional duties, such as periodically updating or restating the plan—and we can help you complete those tasks, too.
Withdrawals
Loans
You will pay ordinary income tax on any taxable distributions.
Roth distributions are tax- and penalty-free if taken after age 59½ and you’ve had the Roth Individual 401(k) for more than five years.
