Roth Solo 401k vs Roth IRA Comparison Chart

October 17, 2014 | By Mark Nolan

Comparison of Roth Solo 401(k), Roth IRA, and Pre-tax Solo 401(k)
Characteristic	Roth Solo 401k Account	Roth IRA	Pre-Tax Solo 401(k)
Contributions	Employee (salary deferral) contributions are made with *post-tax dollars*.	Roth IRA contributions are made with *post-tax dollars*.	Employee (salary deferral) and/or employer (profits sharing) contributions are made with *pre-tax dollars*.
Income Limits	No income limitation to contribute.	Income limits: married $206,000/single $139,000 modified AGI for 2020	No income limitation to contribute.
Maximum Elective Contribution	Aggregate* employee (salary deferral) contributions limited to $19,500 in 2020 plus an additional $6,500 for employees age 50 or over.	Contribution limited to $6,000 for 2020 plus an additional $1,000 for employees age 50 or over.	Same aggregate* limit as Designated Roth Solo 401(k) Account; however, participant can also make a profit sharing (employer) contribution.
Taxation of Withdrawals	Withdrawals of contributions and earnings are not taxed provided it’s a qualified distribution – the account is held for at least 5 years and made: On account of disability, On or after death, or On or after attainment of age 59½.	Same as Roth Solo 401k Account and can have a qualified distribution for a first time home purchase.	Distributions of contributions and earnings are subject to Federal and most State income taxes.
Required Distributions	Distributions must start no later than age 72.	No requirement to begin making distributions while owner is alive.	Same as Roth Solo 401k Account.
* This limitation is by individual, rather than by Solo 401k plan. Although permissible to split the annual employee (salary deferral) contribution between designated Roth Solo 401k contributions and pre-tax Solo 401k contributions, the combination may not exceed the deferral limit – $19,500 ($26,000 if you’re eligible for catch-up contributions). VISIT HERE, to read the top 10 differences between a Roth IRA and a Roth Solo 401k, and CLICK HERE TO VIEW educational video.