Background:
I’m a blessed business owner with 3 businesses and I’ve always maxed out my traditional IRA. My CPA is suggesting I open another form of retirement and I’d rather stay away from the stock market. I am the sole owner and only employee of all my businesses.
Answer
A solo 401k is for owner-only businesses with no full-time W-2 employees. Therefore, as long you don’t employee any full-time W-2 employees in any of your businesses, you could setup a solo 401k plan and make contributions to it based on the aggregate net self-employment income from all of your businesses.
For 2020
With a Solo 401(k), depending on your salary and age, you could contribute $57,000 per year or $63,500 for those 50 or older in 2020.
For 2021
For 2021, the contribution limit increased to $58,000 or $64,500 if age 50 or over.
Solo 401k contributions are
Based on the information that you presented above, you can set up a Solo 401k and take advantage of the following features of our plan:
- Make 2020 contributions up to $57K (or $63.5K if you are 50 or) provided that you sign up by 12/31
- Mega Backdoor Roth contributions
- 401k participant loans including preparation of loan documents for no additional charge
- Invest in alternative investments with checkbook control including real estate, cryptocurrency, notes, etc
