Self-employed individuals are the latest group to be targeted by several asset management companies, which are providing them with individual 401(k)s, or solo 401(k)s, The Wall Street Journal reports.
These accounts let owners put away as much as $41,000 for retirement this year. Several companies, such as Charles Schwab Corp., T. Rowe Price Group Inc., Fidelity Investments and Oppenheimer Funds, are rolling out these plans at a rapid pace. Individuals can consolidate their various retirement savings into solo plans, which offer companies a way to enhance their total assets under management.
Oppenheimer, for instance, will add about 600 solo 401(k)s a month and projects a 50% surge in assets next year. Fidelity has seen a two-fold increase in solo 401(k) accounts in the last year, with assets reaching $750 million in mid-December.
By the end of this year, solo 401(k)s are expected to have about $2.8 billion in assets, up from roughly $1.2 billion at the end of 2003, according to Financial Research Corp. in Boston.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.