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re: Solo 401k vs SEP IRA for new LLC - S election
Posted on 4/12/21 at 7:08 pm to LSUFanHouston
Posted on 4/12/21 at 7:08 pm to LSUFanHouston
I may be wrong. But for the SEP IRA, $58,000 or 25% of the salary can be placed in the SEP IRA transferred to a backdoor Roth IRA.
For a Solo 401k, $58,000 or 25% of the salary from the "employer" and $19,500 total from the "employee" so an overall greater amount but only the employee $19,000 can be converted to a Roth 401k.
SEP IRA: $58,000 max into Roth IRA
Solo 401k: $19,000 max into Roth 401k but $58,000 into the rest of the 401k
Wouldn't 58,000 pretax be better?
For a Solo 401k, $58,000 or 25% of the salary from the "employer" and $19,500 total from the "employee" so an overall greater amount but only the employee $19,000 can be converted to a Roth 401k.
SEP IRA: $58,000 max into Roth IRA
Solo 401k: $19,000 max into Roth 401k but $58,000 into the rest of the 401k
Wouldn't 58,000 pretax be better?
This post was edited on 4/12/21 at 7:25 pm
Posted on 4/13/21 at 10:37 am to Hornetjames3
quote:
Wouldn't 58,000 pretax be better?
1) Are you sure you are going to be able to max this out?
2) Can you set up your solo plan to allow for in-service withdrawals? If so, that's how you can get the employer side into a Roth.
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