Single Ks, also known as solo 401Ks, are designed specifically for small businesses that are owner operated or have very few employees. Any business ranging from a lawn mowing company to a complex printing press can use these plans. The only requirement for this plan is that the owner or the owner's immediate family are the only employees. Single Ks are a spin off of traditional 401K plans that gained popularity with businesses in the '80s and '90s.

Traditional 401Ks were rather expensive for most small business owners due to the administration fees involved. Single Ks are not subject to as much regulation as 401Ks. Less regulation in turn reduces the administration fees involved with solo Ks. It is estimated that over 17 million people will benefit from the lower costs of solo Ks.

Single Ks are a type of qualified retirement vehicle that has special tax benefits common with most qualified plans. Gains and dividends in single Ks grow tax deferred until withdrawn from the account at retirement age. Early withdrawal of funds from single Ks may be subject to "penalty" and income taxes. If you need access to funds in a single K account, a tax-free, penalty fee loan is an available option. Consulting with a financial consultant with experience providing single Ks can help determine if a withdrawal or loan is the right course of action.

Single Ks Offer High Contribution Limits

Single Ks allow for annual contribution limits as high as $41,000. If you cannot afford to contribute $41,000 every year, do not disregard this type of plan. Contributions can range from $0 to the maximum in any given year. The highly flexible contribution structure is a very attractive feature of this type of plan.