JPMorganChase today announced the launch of its Solo 401(k) option, geared towards solo entrepreneurs and self-employed individuals.
The new feature is an extension of the firm’s Everyday 401(k) solution, a workplace retirement savings platform for small businesses. Vestwell, which last year announced its partnership with J.P. Morgan Asset Management to help administrate its Everyday 401(k) platform, will stay on as recordkeeper for the expansion.
“We are excited to help solo entrepreneurs and small business owners with the resources needed to secure their financial future, empowering them to confidently achieve their retirement goals.” said Steve Rubino, head of Retirement at J.P. Morgan Asset Management.
J.P. Morgan’s newest solution focuses on sole entrepreneurs and self-employed small business owners with no employees, with the exception of a spouse if also employed by the business. Individuals can save up to $70,000 annually for themselves, and up to an additional $70,000 for their spouse. Lastly, acting as both the employee and employer in the plan, individuals can take advantage of high contribution limits and tax advantages, like pre-tax and Roth contributions and tax deferrals.
Research has identified a need for retirement products tailored towards business owners and entrepreneurs. In its announcement, J.P. Morgan mentioned research from Chase that finds 80% of 500 small business owners currently contribute to a retirement account and 35% prefer to participate in individual 401(k) options. Still, 44% said they are satisfied with their contributions and would rather increase them.
“Today’s economy is powered by self-starters – consultants, creators, contractors – who have redefined what it means to work,” added John McCourt, head of Client Relationships at Chase for Business. “Solo 401(k), our new retirement solution for small business owners, provides a flexible way to save for the future while growing their business, wherever they may be in their retirement planning journey.”
As of June 30, J.P. Morgan Asset Management holds $3.8 trillion in assets under management (AUM) while J.P. Morgan Chase & Co. has $4.6 trillion in assets.
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