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Retirement Planning
Chapter 5: Profit-Sharing Plans/INDIVIDUAL 401(k)
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Chapter Study Session

Chapter 5: Profit-Sharing Plans

INDIVIDUAL 401(k)

01.Core Concepts

• 401(k) plan for businesses where the only employees are the owner and/or spouse • As the employee, the business owner can contribute up to $23,500 (in 2025), plus catch-up if age 50+ • The business can make matching and/or profit-sharing contributions on behalf of the owner • Maximum total contribution $70,000 (in 2025), plus catch-up • Not subject to ADP/ACP testing • Retroactive first year elective deferrals