Retirement Curve Ball

[thirdeye]

part B: Brian, a lot of the rules have changed since I contracted. At the time, a contractor you can put a good chunk of change in a SEP-IRA (self employment). I don't know what dollars they count, but this could be away to bring it down. Ask an accountant.

I believe it's an 'Individual 401(k)' (aka Solo 401(k) that allows you to defer income, there by lowering your AGI. It's an option for a one-man business, but the spouse can also get on board.

A SEP is geared toward a business with employees, and all must receive the same percentage which is paid for by the company, but a SEP will reduce your AGI, taxable income and ultimately lower your federal income tax.

 

[jcam222]

Going to try to be more like Jeff and learn to do more Keto dishes since I will have time to prepare food. His food looks so darn good. So hard to give up carbs but the way he makes it look might not be bad.

Thanks Brian! Always happy to share ideas and recipes. I’d consider working just enough for extra cash and staying well below the threshold. Maybe a day a week?

 

[bigfurmn]

Congratulations sir! Enjoy your time and savor it. As to the rest of everything, I think I might be glad that I will never get to retire. (F'ing govt)

 

[clifish]

I believe it's an 'Individual 401(k)' (aka Solo 401(k) that allows you to defer income, there by lowering your AGI. It's an option for a one-man business, but the spouse can also get on board.

A SEP is geared toward a business with employees, and all must receive the same percentage which is paid for by the company, but a SEP will reduce your AGI, taxable income and ultimately lower your federal income tax.

To do this he would need to start a corp and set up the solo 401K. He would have to bill the company for his time under his company name and have checks cut out to his company. He would also be able to pay his car payments and many other expenses through that company...you can be as aggressive as you dare to0, but should have a good accountant to advise you. Probably too much work if you could just walk away and retire?

 

[thirdeye]

To do this he would need to start a corp and set up the solo 401K. He would have to bill the company for his time under his company name and have checks cut out to his company. He would also be able to pay his car payments and many other expenses through that company...you can be as aggressive as you dare to0, but should have a good accountant to advise you. Probably too much work if you could just walk away and retire?

Can't any entity form a Solo 401(k)?

An LLC would be easier and cheaper than an S-Corp, and you would still get asset protection. Plus your start-up expenses and fees are deductible. Mileage reimbursement may be better than a company vehicle in this case since the work assignment(s) are not daily. You are right about having a good CPA.... those fees are deductible too.

 

[clifish]

Can't any entity form a Solo 401(k)?

An LLC would be easier and cheaper than an S-Corp, and you would still get asset protection. Plus your start-up expenses and fees are deductible. Mileage reimbursement may be better than a company vehicle in this case since the work assignment(s) are not daily. You are right about having a good CPA.... those fees are deductible too.

I am not an accountant so you could be right? I have had rental properties in an LLC for protection, but never did a solo K through them as I have always had an S-corp that held my solo K.