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Owners 401(k)

What is the Owners 401(k)?

It’s an affordable 401(k) that offers big-company benefits for one-person businesses.

It was designed to combine the benefits of a profit-sharing plan and a 401(k) plan without costly plan set-up charges.

If your business grows and you hire common law employees, the Members Retirement Program even makes it easy to transition to a regular 401(k).

Who can have an Owners 401(k)?

  • Owners of businesses with no employees.
  • Owners of businesses whose spouse and/or child(ren) work for them. In fact, they can contribute meaningful dollars toward their retirement as you, the owner, contribute to yours.
  • Owners who also work for another employee may also be able to contribute to an Owners 401(k), subject to the maximum deferrals allowed by law per individual.

What are the potential benefits of the Owners 401(k)?

Potential to save more for retirement. An Owners 401(k) can include a salary deferral and a profit-sharing contribution. Plus, since contribution limits are based on a percentage of income rather than a fixed limit, you have ability – if you wish – to contribute up to three times as much as what’s allowed with some other types of retirement plans.

Contribution flexibility. It’s your choice whether you make contributions in any given year. There are no minimum contribution levels.

Consolidation convenience. If you have other assets in other qualified retirement plans – such as an IRA, SEP, 403(b) and 457 – you can roll those assets into one account for easier monitoring and investment management.

Loan feature. So that you’re prepared for future or unforeseen needs, the Owners 401(k) offers the option of taking loans (for any reason) against your account in an amount up to 50% of your balance, not to exceed $50,000. The loan is tax-free and penalty-free as long as you repay the loan on time. Better still, there’s no additional cost to use this feature.

How much could you contribute to an Owners 401(k)?

Up to 25% of your compensation, based on a maximum of $265,000 in income. You also have the option to defer up to an additional $18,000 (or 100% of compensation, whichever is less). Your total contribution must not exceed $53,000 (or 100% of compensation). However, if you’re 50 or older, you can take advantage of the catch-up provision to contribute another $6,000 over and above the $53,000 for 2016.

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"AXA" is the brand name for the AXA Equitable Financial Services, LLC family of companies, including AXA Equitable Life Insurance Company. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. The obligations of AXA Equitable Life Insurance Company are backed solely by its claims-paying ability.

The Members Retirement Program (Contract Form #6059) is funded by a group variable annuity contract issued and distributed by AXA Equitable Life Insurance Company (New York, NY 10104, 212-314-4600).

Please consider the charges/ risks/ expenses/ and investment objectives carefully before purchasing a variable annuity. For a prospectus containing this and other information please contact a financial professional. Read it carefully before you invest or send money.

A group variable annuity is a long-term financial product designed for retirement purposes. In essence, a group variable annuity is a contractual agreement in which payment(s) are made to an insurance company on behalf of retirement plan participants, which agrees to payout an income or a lump sum amount at a later date to those participants. There are contract limitations and fees and charges associated with group variable annuities, which include, but are not limited to administrative fees and charges for investment management. Amounts in the annuity's variable investment options are subject to fluctuation in value and market risk, including loss of principal. Withdrawals from annuities are subject to an additional 10% federal income tax penalty. Withdrawals may also be subject to a contractual withdrawal charge. Contact a Retirement Program Specialist for costs and complete details. An annuity contract that is purchased to fund a retirement plan should be done so for the annuity's features and benefits other than tax deferral. For such cases, tax deferral is not an additional benefit. You may also want to consider the relative features, benefits, and costs of this annuity with any other investment that you may have in connection with your retirement plan or arrangement.

Please be advised that this document is not intended as legal or tax advice. Accordingly, any tax information provided in this document is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.

GE-100118b (07/2015)

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