DIY Money | Personal Finance, Budgeting, Debt, Savings, Investing Solo 401k v. Roth IRA
Jun 30, 2025
Discover effective saving principles tailored for small business owners. The hosts dive into retirement account options, showcasing the advantages of a Roth solo 401k over a Roth IRA. They discuss maximizing contributions and the importance of professional guidance in retirement planning. Learn why midterm financial goals should take precedent for those in their 40s. With a mix of humor and insightful anecdotes, the conversation is both engaging and educational.
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Maximize Tax-Advantaged Savings
- Max out your spouse's Roth IRA to maximize tax-advantaged savings even if they have low or no income.
- Opening a solo 401k can allow much higher contributions but involves more setup and maintenance.
Solo 401k Eligibility and Considerations
- Choose a solo 401k if you have self-employment income and no employees beyond your spouse.
- Avoid solo 401k if you plan to hire employees soon, as it requires closing the plan when you no longer qualify.
Use a CPA and Low-Cost Solo 401ks
- Consult a CPA to determine the best retirement plan and contribution levels based on your business income and structure.
- Solo 401ks now have very low fees and easier administration via platforms like Schwab or Fidelity.