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Are you self-employed, an independent contractor?  Maybe you're employed full-time, but operate a small business and/or you receive income that's reported on a Form 1099?  If so, you may be eligible to establish an Individual 401(K) plan.  It is a retirement plan that designed specifically for owner-only owned businesses, but may include a spouse and it allows business owners to put more away for themselves (and take a tax deduction) than many companies typically put away for their employees.  For most owner-only businesses and Form 1099 recipients, the SEP-IRA has long been the most commonly used plan.


An Individual 401(K) plan has these advantages over SEP-IRAs:


  • Higher contribution limits

  • The ability to borrow from plan assets at low rates

  • High income earners, who cannot contribute to a Roth IRA, have no income restrictions and can add the Roth provision to an Individual 401(K) and gain the potential to benefit from tax-free withdrawals in retirement

Individual 401(k) 2017 Contribution Limits Compared to Other Plans:

As someone who is self-employed you serve as the employee AND employer.  As an employee, you are allowed to contribute up to $18,000 of compensation (income) to an Individual 401(k) as the employee.  As the employer, in an incorporated business, you are allowed to contribute up to 25% of compensation (20% for sole proprietors) to an Individual 401(k).  These two (2) contributions as employee AND employer cannot exceed $54,000, unless the participant is older than 50 years of age.  Participants older than 50 years of age can contribute an additional $6,000 annually as a catch-up contribution bringing the total maximum contribution to $60,000. 


Stocks (equities), bonds (fixed income), and cash are considered asset classes and the act of placing a particular percentage of your assets in each category is known as asset allocation.  Just as important as asset allocation is asset location.  Asset location is strategically placing the various asset classes (stock, bonds, and cash) in the most advantageous type of  investment account.  Investment accounts can be taxable, tax-deferred, or tax-free.

The earnings (interest) on certain fixed-income investments (bonds) may be subject to a tax rate as high as 39.6%, while earnings on certain equity-oriented investments (stocks) have a maximum tax rate of 20%, creating a difference that can be as great as 19.6% (39.6% - 20%).

A complimentary portfolio review can help determine if your portfolio is structured in a way that capitalizes on the difference in tax treatment for taxable, tax-deferred, and tax-free accounts. At Jones Wealth Management Group, we understand the advantages and disadvantages of the various investment accounts and can help structure your assets in a manner most beneficial for your situation.


Mutual funds have brought the benefit of stock and bond ownership to the masses.  A mutual fund is an investment company that pools money from thousands of investors and invests in stocks or bonds, or a combination of both, for the benefit of the individual shareholders.  An individual or team of people called portfolio managers are responsible for the buying and selling of stocks and bonds and other other securities on the behalf of investors.

There literally are thousands of companies that are publicly-traded - meaning that anyone can own stock in them.  Smaller investors would normally be limited in the number of individual stocks they could own, have limited diversification and greater exposure to the ups and downs of an individual stock.  A typical mutual fund would own twenty-five (25) to five hundred (500) or more securities (stocks and/or bonds), giving smaller investors exposure to a greater number of companies.

Jones Wealth Management Group will explain the risks and rewards, fees and expenses of mutual fund ownership and help you determine if mutual funds should be a part of your wealth building strategy.


As a saver and investor, life insurance takes on a different role than for emerging savers and investors.  Savers and investor often have the dual responsibility of caring simultaneously for their children and their parents.

As savers and investors transition from being emerging savers and investors, they are met with higher insurance rates. Some of this reality can be explained by the fact that many health ailments and conditions develop as we grow older in age.  

Jones Wealth Management Group can help you determine the appropriate amount of life insurance for your individual situation and has the ability to select from multiple carriers in providing the most value for you.

Need more details? Contact us

We are here to assist. Contact us by phone, email or via our Social Media channels.

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