Family Office Definition: Independent 401(k)
Independent 401(k) definition: An independent 401(k) is a tax-deferred retirement savings vehicle for self-employed (family business owners). No outside employees are permitted, only immediate family members. Testing and compliance are not required of independent 401k plans (as associated with larger employer 401k plans). Contributions are tax deductible, and money in the account grows tax-free until withdrawals are made. Catch-up provisions for those over 50 years of age are allowable for an independent 401(k) plan, making the contributions limits higher than compared to SEP IRAs. All contributions to an independent 401(k) are completely discretionary. Loans are also permitted with an independent 401(k).
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