Don't Miss the Self-Employed 401(k) Year-End Deadline

You must establish your Self-Employed 401(k) plan by Dec. 31 if you want to make tax deductible contributions for the 2002 tax year. The Self-Employed 401(k) is a new retirement plan for individual owner businesses that offers high contribution levels and loan features.

"Keogh owners are excellent candidates to switch to the Self-Employed 401(k) because they must amend their Keogh plans by the end of this year anyway," says Daniel Lamaute of InvestSafe.com. "Instead of amending a Keogh plan to bring it into compliance with the Dec 31 tax law deadline, small business owners should simply convert their Keogh to a Self-Employed 401(k)."

The Self-Employed 401(k) has three major advantages over the Keogh:
1.    Significantly higher contributions for most business owners
2.    Additional contributions allowed for those over age 50
3.    Up to $50,000 tax-free and penalty free loan feature

"Converting your Keogh to a Self-Employed 401(k) plan is easy," says Lamaute. "Visit our website at www.investsafe.com to learn more about the Self-Employed 401(k) plan."

Tax-free and penalty-free Self-Employed 401(k) loans are limited to 50% of your account balance or $50,000, whichever is less. Thus, you may want to consolidate your retirement accounts – Keogh plan, other 401(k) accounts left with previous employers and even your IRA accounts – into your Self-Employed 401(k) to increase your account balance to be available should you need a loan.




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