First Mid-Illinois Bancshares Inc.

10/10/2024 | Press release | Distributed by Public on 10/10/2024 16:17

Maximize Your Retirement: Discover the Benefits of Owners-Only 401(k) Plans

October 10, 2024

The owners-only 401(k) offers the high contribution limits and flexible investment strategies of a traditional 401(k) to owners-only businesses.

Benefits of establishing an owners-Only 401(k)
In addition to the benefits of traditional 401(k) plans - including tax-deductible contributions, tax-deferred earnings, flexible contribution requirements and a variety of investment options - and the higher funding limits, owners-only 401(k) plans offer:

1. Catch-up contributions
Those 50 and older can add additional funds to their 401(k) contributions.

2. Tax-free loans
Although 401(k) plans are designed for retirement savings and can grow faster if the funds are left untouched, the owners-only 401(k) includes a provision that allows you to borrow from your account if you need quick access to funds.

3. Consolidation of multiple accounts
Most retirement plan assets, including funds from profit sharing and money-purchase plans, and both traditional and SEP IRAs, can be transferred into your owners-only 401(k).

4. Spousal benefits
While this type of plan is specifically for businesses with no employees, you and your spouse can participate if you both are employed by and receive compensation from the business.

5. No discrimination testing requirement
Because you don't have employees, you are not limited by employee contribution restrictions and can, therefore, maximize your contribution.

6. Roth contributions
Individuals who cannot make contributions to a Roth IRA because of income limitations can now make Roth contributions inside their 401(k) plans. SIMPLE IRAs do not allow for Roth (after-tax) contributions.

Taking the next step
To learn more about the owners-only 401(k), contact your First Mid Wealth Management financial advisor.

Non-deposit products and services through Raymond James
Are Not FDIC Insured Are Not Bank Deposits Are Not Guaranteed May Lose Value


First Mid Bank & Trust and First Mid Wealth Management are not registered broker/dealers and are independent of Raymond James Financial Services. Investment advisory services offered through Raymond James Financial Services Advisors, Inc.