I'M IN LOVE ❤️ With Solo 401k retirement plans

It's the best thing for solopreneurs, family-only consulting businesses, and anyone who operates as a Single Member LLC. 🧵🧵 below.

𝗔 𝗦𝗼𝗹𝗼 𝟰𝟬𝟭𝗸 𝗶𝘀 𝗮 𝗿𝗲𝘁𝗶𝗿𝗲𝗺𝗲𝗻𝘁 𝗽𝗹𝗮𝗻 𝗼𝗻𝗹𝘆 𝗳𝗼𝗿 𝗦𝗶𝗻𝗴𝗹𝗲 𝗠𝗲𝗺𝗯𝗲𝗿 𝗟𝗟𝗖𝘀 (+ Spouse!)

• Allows for Employer Contribution (hey that's you)

• Allows for Employee Contribution (hey that's still you)

• Can include your spouse (2x returns now)

Now you may not have heard of Solo 401k's, so let me catch you up to speed on the different retirement accounts you know.

𝟭. 𝟰𝟬𝟭𝗸

Exactly what you think it is; these are plan through your traditional W2 employer. You don't have much control, but you might get a few extra % from your employer.

𝟮. 𝗜𝗥𝗔

This is the plan you get when you ditch your employer. Allows you to self-manage it and gives you greater control. Want Tesla + Mutual Fund + Target Funds? Go for it.

𝟯. 𝗦𝗘𝗣-𝗜𝗥𝗔
This is what self-employed people think of first. If they get there.

- Employer Contributions of $61k OR 25% of Income, whichever is lower, for 2022

- No Employee Contributions (that's you)

- It is fully tax deductible

- If you are 50 or older, it does not allow catchups

𝟰. 𝗦𝗼𝗹𝗼 𝟰𝟬𝟭𝗸

This is why I'm posting today.

- Employer Contributions of $61k OR 25% of Income, whichever is lower, for 2022
- Employee Contributions up to $20,500 for 2022 (hey that's you)

- If you are 50 or older, it does allow for catchups ($6,500 for 2022)

𝗟𝗲𝘁'𝘀 𝘀𝗮𝘆 𝘆𝗼𝘂𝗿 𝘀𝗶𝗻𝗴𝗹𝗲 𝗽𝗲𝗿𝘀𝗼𝗻 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗲𝗮𝗿𝗻𝘀 $𝟭𝟬𝟬𝗸.

• IRA - $6k max

• SEP-IRA: $18,587.05 as an employer contribution

• Solo401k: You get the above + the employee contribution of $20,500, for a net of $39,087

𝗟𝗲𝘁'𝘀 𝘀𝗮𝘆 𝘆𝗼𝘂𝗿 𝘀𝗶𝗻𝗴𝗹𝗲 𝗽𝗲𝗿𝘀𝗼𝗻 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗲𝗮𝗿𝗻𝘀 $𝟮𝟬𝟬𝗸.

• IRA - $6k max

• SEP-IRA: $37,641.587 as an employer contribution

• Solo401k: You get the above + the employee contribution of $20,500, for a net of $58,141

𝗪𝗵𝗮𝘁 𝗶𝗳 𝘆𝗼𝘂 𝗺𝗮𝗸𝗲 𝗺𝗼𝗿𝗲?

• If you earn $215k

• Your max Solo 401k contribution is $61k.

• That's still greater than the SEP-IRA you could have gotten at only $20k.

And yes that's tax deductible.

And yes it 2x if you include your Spouse in the plan (so $122k).

I personally like the part where I can disregard K-1s and Crypto taxes as those get deffered.

𝗛𝗼𝘄 𝘁𝗵𝗲 𝗟𝗲𝗴𝗮𝗹 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗖𝗿𝗲𝗮𝘁𝗶𝗼𝗻 𝗪𝗼𝗿𝗸𝘀

- You're forming a 𝘁𝗿𝘂𝘀𝘁, sponsored through your company

- It gets its own EIN, like a company

- You have to open accounts for the trust, like a company

I've been waiting to get this off my chest. I met 𝗥𝗮𝗰𝗵𝗲𝗹 𝗡𝗮𝗯𝗲𝗿𝘀 from a digital writing course, and she has changed my relationship to retirement accounts, and to Solo401ks.

𝗖𝗼𝗺𝗺𝗲𝗻𝘁 𝗯𝗲𝗹𝗼𝘄 𝗶𝗳 𝘆𝗼𝘂 𝘄𝗮𝗻𝘁 𝗺𝗼𝗿𝗲 𝗶𝗻𝗳𝗼𝗿𝗺𝗮𝘁𝗶𝗼𝗻!

Or DM. I know you. :)