Solo 401(k) Pros and Cons | SDIRA | Equity Trust

If you own a small business, you have options for your retirement account, such as a Solo 401(k). Note that the business must have no additional employees other than the spouse of the proprietor or, in the case of a partnership, only self-employed partners and their spouses.

Equity Trust Company is a directed custodian and does not provide tax, legal or investment advice. Any information communicated by Equity Trust Company is for educational purposes only, and should not be construed as tax, legal or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional.

0:00 - Intro
0:31 - Solo 401k: Employee Contribution vs. Employer Deferral
1:59 - Solo 401k Contribution Limits (Under 50 vs. 50 and Over)
3:16 - Employer Deferral and Contribution Calculations
5:58 - Tax Deductions and Roth Component of Solo 401k
9:12 - Spouse Participation and Solo 401k Requirements

[demetraf.]

I've watched several videos explaining this. And, I must admit this video was the most clear and concise video that I've seen on this topic. I really appreciate how you simplified this topic. Thank you!

[RichAPotts]

This is excellent content. I’m a W-2 (no retirement from employer) and side-hustle and real estate investor trying to find something better than an IRA. Thank you!

[andreymudik]

Damn, this video is clean. Imma like it just to save it and watch it over in more detail later

[sancochito]

Thank you for simplifying the SOLO 401k. IRS website was not as easy. Thank you. The last part, when you talked about the substantial and recurring contributions: If I don't make money for a particular month or two due to slow business but still contribute, will I be penalized? Or the other way around. If I don't contribute constantly every month I will be penalized. Thanks again for this video.

[SafeFirm]

Excellent information. Does I pay Social Security and Medicare on my contribution to a Solo 401K through my W2?

[gauravkhanal]

Three questions:

1.For the solo 401k, in regards to the employer deferral, can that be made with pretaxed money, or is that also made with ordinary money similar to the employee contribution?

2. Can you have one company where youre the only owner and employee and open an individual 401k, and another company where you have employees and contribute to SEP IRA? So basically contribute to both without the limits being affected?

3. Can you hire contractors instead of employees to avoid some of the cons of individual 401k (aka 1099 contractors)?

[FlaschDJ]

I am 68 and self-employed.
Learning about Solo 401k suggests the following strategy to me.
Comments will be greatly appreciated.
————-
Business profits + SS + IRA WDs (voluntary or RMD) push me into higher brackets.
To remain in lower brackets, I’ll make MAGI-reducing contributions to a Solo 401k.
1)_Is this permissible?
2)_Is this sensible?
This strategy seems to afford me fine control of my tax bracket.

[keithwalker]

compound interest should be known by all

[ninachan]

you are confused me with 20% . First you said net income $20000 can contrib $19500 the you said 20%? please explain in detail calculation.

[kaliamama]

Thank for making it simple. Have coupe of questions

1. I have multiple income generating business. I can open one for each business and contribute $19500 and deferral ?
2. Best Brokerage to open account with where I can do trading if allowed?

[matthewhoover]

wow, and I'm sitting here thinking I can only contribute 18k per year total, didn't know that there was an employer deferral. I only have an IRA that I max out but my financial planner is telling me it'd benefit me to take advantage of contributing more to a tax deferred account rather than just putting the rest of it into a managed account with my broker after paying taxes on it. I've been doing it this way so far because I wanted the money to be accessible to me but it's at the point where I have more then enough available for whatever I need (house down payment, for example). I should now really take advantage of the tax deferral.

[perlaargyle]

Do you know if you could buy a property with a solo401k with an agreement for sale?

[BBones-wy]

So a couple can both open their solo 401k each but after having done that, can their minor child who makes some part time income from working for the business open a regular IRA that has nothing to do with solo 401k plan or SEP IRA?

[lasvegasadventures]

Which of the following can you have together ? Solo 401K, Roth IRA, SEP IRA. Can you have all 3?

[unforeseenawakening]

If I open a Solo 401k this year but in a few years open a side business (retail shop) that has employees, can I still keep my solo 401k since it will be a completely different business?

[searchandverify]

You said you can max out your 401k and IRA contributions in the same year. Is that only for the traditional and Roth IRA's or can you have a SEP IRA, solo 401k and traditional/Roth IRA maxed out in the same year? Would working for multiple entities you own help with this?

[mr.morton]

What about salary employee, I have a minor work permit for my son?

[TheTartesos]

How much does it cost to have my solo401k with equity trust company?

[justinknash]

I have a SEP (three years old) can I covert it and its assets to a solo 401K?

[namly]

Do I lose all my money if a 401k company goes out of business? Thank you very much.