Which CamaPlan is Right for You?

The chart below compares the various CamaPlan types available. Click each plan name for more information.

Roth
IRA
Traditional
IRA
SEP
IRA
SIMPLE
IRA
Individual KESAHSA
TypeIndividualIndividualBusinessBusinessBusinessIndividual (1)Individual/Family
Tax Deductible*
Qualified Tax Free DistributionBoth(2)
Contribution Limits (3)LowLowHighMediumHighLowLow
Early Withdrawal PenaltiesNone10% +tax10% +tax10% +tax10% +tax10% +tax20% +tax
Income Limit Restrictions
(3)

* Yes, for both business and individual
(1) Any beneficiary who is under age 18 or is a special needs beneficiary
(2) For medical expenses only…see publication 969
(3) See publication 590 for latest limits

401k IRA Comparison Summary

When is a 401(k) more appropriate for your retirement investing? Check out the comparison chart below to see which one is best for your unique needs.

FeaturesSolo 401KSDIRAAdditional Details
Creditor protectionIn most instances protection is available and state laws should be reviewed
Tax free (Roth Account) availableSolo 401k has larger contributions and no income limitations.
Tax Deferred account available
Check book control capabilityThe IRA needs to establish another entity such as an LLC or trust. Continuous funding for the IRA new entity (LLC/Trust/etc.) is potentially a prohibited transaction.
Custodian/or Administrator required per IRC 408IRA requires a custodian /trustee-401k business owner can be trustee.
Administrative feesSolo 401k is usually more costly however there are measures where cost can be minimized with the business owner controlling the process directly. Basically a “Do Your Own” model.
Able to purchase alternative investmentsReal estate, notes, precious metals, private placements, etc.
Invest in Life insurance
Self Employment required
Personal loan available$50k or 50% of account balance whichever is less.
RMD for Pre Tax after 72 years of age401k could transfer to a Roth IRA and do away with the RMD.
Fair market value reporting to IRSIRS form 5500IRS form 5498Form 5500 can be completed by the business owner, CPA, or third party plan administrator but it is the responsibility of the business owner. The 5498 form is done by the custodian.
Report distributions to IRS on form1099 R1099 RSolo 401k will also use form 5500
Federal tax withheld on distributionsIRA has the option to determine if any, what amount of tax to withhold; 401ks usually have mandatory 20% withheld.
Prohibited Transaction rules applyReference Section IRC 4975
Unrelated Business Taxable Income rules applyReference IRS form 990T and Instructions
Unrelated Debt Financed IncomeUDFI does not apply in most cases with a 401k. However it will most likely be triggered with an IRA that borrows non-recourse funds.
Contribution limitsSolo 401k allows salary deferral and company profit sharing. IRAs have business and personal accounts with different limits for each type of IRA. See CamaPlan page for more details.
Tax on early Post tax contributions distribution401ks require earnings be to withdrawn with post tax contributions proportionately resulting in a taxable event. Roth IRA distribution rules allow for early withdrawal of contributions anytime without taxation.