Roth Solo 401(k)
In 2006, Congress merged two of the most popular types of retirement savings plans—the Roth IRA and the solo 401(k)—into a Roth Solo 401(k). The Roth Solo 401(k) possesses the same benefits of the solo 401(k), but it has the tax benefits of Roth-type contributions. It has the same contribution limits as the Solo 401(k), but you can designate your contributions through salary deferral as Roth contributions.
Roth Solo 401(k) Benefits
If you want Roth tax advantages (tax-free distributions) with a substantial contribution limit, the Roth Solo 401(k) is for you. Also, if you're interested in a Roth IRA, but you don’t qualify because of income limits, then the Roth Solo 401(k) is an option to consider.
In 2017 you can annually contribute up to $18,000 and up to $24,000 if you're 50 or over through salary deferral. Plus, you can contribute a profit-sharing portion (0-25%) of your salary. In 2017 the limit from both sources is $54,000 ($60,000 if you are 50 or over).
In 2018 you can annually contribute up to $18,500 and up to $24,500 if you're 50 or over through salary deferral. Plus, you can contribute a profit-sharing portion (0-25%) of your salary. In 2018 the limit from both sources is $55,000 ($61,000 if you are 50 or over).
The Roth Solo 401(k) is available to anyone with a Solo 401(k). It's a benefit to higher-paid employees and self-employed individuals who may have been excluded from having a Roth IRA because of income limitations.
FREE Self-Directed IRA Success Kit
Take Control of Your Financial Future
Discover what only 2% of Americans know about creating lasting wealth. Truly Self-Directed IRAs and other retirement plans allow you to create lasting wealth by investing in areas where you have knowledge, expertise, and comfort.
Our FREE Self-Directed IRA Success Kit Reveals:
- The #1 Wealth Creating Tip (Used by Warren Buffett)
- How to Earn Tax-Free Profits Investing in Alternatives to the Market
- How Easy it is to Get Started on the Path to Financial Freedom
Access Your Free Kit Now
All fields required