S OLO 401K November, 2009 Paul Pergande P.E.

Q UOTES Arthur Godfrey I am proud to be paying taxes in the United States. The only thing is I could be just as proud for half of the money. Dr. Laurence J. Peter America is a land of taxation that was founded to avoid taxation. Ronald Reagan The taxpayer: that's someone who works for the federal government, but doesn't have to take a civil service examination.

Q UOTES Gerald Barzan Taxation with representation ain't so hot either. Morgan Stanley You must pay taxes. But there's no law that says you gotta leave a tip. Ogden Nash The more you earn, the less you keep, And now I lay me down to sleep. I pray the Lord my soul to take, If the tax-collector hasn't got it before I wake.

W HAT IS A S OLO 401K? Similar to common corporate 401K Same basic contribution limits $16.5K, (2009) Same type of investment options, stocks, mutual funds, precious metals, etc. Ability to add an additional 20% of income as profit sharing match Loan Option Tax deductible Minor administrative fees ~.25% Available for ‘part time’ self employed if you are covered by another 401k plan Other options Simple IRA SEP - Simplified Employee Pension Individual Retirement Account (SEP IRA) is a variation of the Individual Retirement Account. Individual Retirement Account

S IMPLE VS. SEP VS. S OLO Simple No loans Aimed at lower income employees Max $11.5k Waiting period for eligibility SEP IRA Common at many brokerages Same 401K limits 16.5K Limited to 20% income No Catch up for over age 50 Max $49k No Loans No IRS filings Solo 401k Rare due to limited market Same 401K limits 16.5K Plus 20% income or 25% of W2 Catch up of $5.5K over age 50 Max $49K Loans 0.25% Admin fee

E XAMPLE : $100K I NCOME

E XAMPLE : $200K I NCOME

D ETAILS Who offers this product? 401Kbrokers.com in LaJolla, CA Not offered directly from Vanguard 401k Brokers acts as a third party administrator Direct access to Vanguard no load funds and brokerage services Fidelity does not offer this investment tool

R ESOURCES r_List.pdf tcalc.asp finance/taxes/the-perks-of-the-solo-401k-13505/

Q UOTES John Maynard Keynes The avoidance of taxes is the only intellectual pursuit that carries any reward.