Vanguard Individual 401k

Vanguard Individual 401k is an investment product by Vanguard for the small business. Investor by this product could take it individually, without joining with other person.

For that, many investors sometimes also use this product for their individual investment and not for their business investment. According to Vanguard website, person who is allowed to join this program of investment is single owner or partner who does not have a common-law employee.


It means that person who had a small business, but not having employee, is allowed to join this investment product. This investment is indeed, designated for the individual business owner, especially for the small business.

Vanguard Individual 401k can also be taken by employees other than the owners, business partners, or shareholders of the company and their respective spouses. For this term, independent contractor is not categorized as an employee.Read it first Vanguard Money Market Interest Rate

Vanguard Individual 401k

Vanguard Individual 401k

It also means that ordinary employee could take part in this investment. By this program, ordinary employee could take part in investment. Investment is something that will benefit the investor, especially for many years period of time.

People could invest their money through the program and acquire the benefit after years he or she invested the money.


For Vanguard Individual 401k, the cost per qualified employee is 53,000 USD for the tax year of 2016. And for the year of 2017, the tax year had increased by 54,000 USD. The maximum tax for compensation deductible from employer contribution is 25%.

It is reduced as business expense and not needed on every year. And for the employee contribution, a tax-deferral or Roth’s tax-deferral contribution can be made up to 18,000 USD for the tax year 2016 and 2017. The contribution can not exceed 100% of compensation.

The paperwork to establish Vanguard Individual 401k is considered as greater than the other choices. Nevertheless, the calculation of Roth for the employee is sometimes still bother.Read it first Vanguard High Yield Corporate

Subsequently, some of the employees who joined the program, wished that the calculation of Roth might become easier and more simple. Solo 402k plans said to have more paperwork on start up.

For that case, if the plan assets placed more than 250k USD, the employee or investor needs to file form 5500 or 5500EZ annually.

Nevertheless, this product is considered as having longer application paperwork. The longer process is because Vanguard need complete check to the investment and the fund sources.

Some of the new investor, thought that Vanguard Individual 401k does not accept incoming rollovers. For that condition, it was major disadvantage for people who want to conceal traditional IRA’s to open up a backdoor Roth.

Nevertheless, the program indeed is not planned for getting the Roth 401 component in the plan docs. For the settlement of the case, investor needs to make a complete plan of retirement plan consultant or third party administrator.Read it first Carnegie Vanguard High School

It means that investor needs to have the third party and may pays a little extra for the ability to get the loan components added.