Timothy Sumer

As you plan for the future, it’s important to pick the best retirement plan for a self-employed business owner. This video compares several choices and then focuses on a Solo 401(k) vs. SEP IRA. The reason for that is that accountants have traditionally suggested SEPs, but a SoloK might offer more functionality. That said, you can keep things simple if your plan to save a relatively small amount each year. An IRA might be all you need, but be mindful of the ability to deduct contributions or your eligibility for Roth contributions. 🌞 Subscribe to this channel (it's free): SEPs and Solo 401(k) plans both allow for employer contributions. The amount is similar, but things diverge quickly from there. A SoloK also allows for catch-up contributions and salary deferral contributions, which can increase your savings significantly each year. Get free retirement planning resources: 🔑 9 Keys to retirement planning 🐢 6 Safest Investments ...

See maximum limits and, more importantly, what goes into the 401(k) max contribution. For 2023, the annual limit is up to $22,500 of your own pay, and the total amount that can go into your account is $66,000. For those over age 50, another $7,500 catch-up is allowed. But this can get complicated, and if you’re hoping to max out your 401(k), it’s helpful to understand all of the pieces involved. Get free retirement planning resources: 🔑 9 Keys to Retirement Planning 🐢 6 Safest Investments Contributions can be employee or employer contributions (or both). When your employer contributes, you might get matching money, profit-sharing dollars, or other types of contributions to your account. 🌞 Subscribe to this channel (it's free): Employee money can often go in pre-tax or as Roth-type money. The choice you make depends on what’s available and what makes the most sense for your strategy. And some plans allow voluntary after-tax cont...