Repayment of loan
The loan should be repaid over five years amortization schedule. You can pay back earlier if you can afford that. Your regular payments should be made at least quarterly.
The limit for a repayment period of a loan is 60 months. There is an exception: when you take a loan to purchase a primary residence, you can extend the repayment for up to 15 years.
The advantage of this type of loan is that you borrow from yourself and pay back to your own Solo 401 k retirement funds. The interest will go to your account.
Solo 401(k) withdrawals in retirement
Your Solo 401k withdrawals after the retirement age will be penalty free. Income taxes depend on the type of your account. For Roth account, there are tax-free withdrawals if they have been made at least five years after the first contribution. If you have a traditional small business retirement plan, the taxes on your withdrawals will depend on your current tax break.
Small business retirement plans of Solo 401k require its holders to eventually make withdrawals, known as required minimum distributions (RMDs). These can be avoided if you roll Roth Solo 401k into a Solo 401k IRA. It doesn't have a mandatory RDM.
