There’s an exception out there to the self-defeating IRAs and 401Ks to which most Americans contribute. Have you ever heard of a Solo 401k?
Transcript: Hi this is Jeff Brown the “BawldGuy”. Today we’re going to talk about small business owners and one of the things that they may not know is available to them. It’s called the solo 401(k). Now, if you’ve read me at all, you know I don’t like 401(k)s, I don’t like IRAs, and that’s putting it mildly. Here’s the exception. A small business can own a solo 401(k). Now, you can’t have any employees except for you and/or your spouse – that’s the limitation. But here’s what can happen. You and your spouse, if you’re under 50, can give up to $17,000 a year apiece, after taxes, to the Roth side of that solo 401(k). Oh, did I say Roth side? Yeah, and I meant to imply it can be traditional, too, and it can be traditional and Roth simultaneously. This is a very flexible entity. Now, that allows you to take an existing rollover 401(k) from a previous employer. You can use a current IRA, and you can roll those into the traditional side, and then roll that onto the Roth side of the solo 401(k). Now, when you do that, the IRS is going to savage you. Don’t let anybody tell you any different. You’re probably going to end up with 50 to 65 cents on the dollar, at best. But you’re going to do far better with that amount in the Roth side of a solo 401(k) down the road for retirement than you will having kept it a dollar for a dollar in the traditional side. Now, here’s what we’re going to talk about tomorrow. Tomorrow, we’re going to talk about exactly what you would invest in with that Roth money, and it’s going to deliver, I promise. I’m going to bring you my A game on this, and you’re going to want it. This is Jeff Brown, the BawldGuy. Thanks for coming in today. I’ll see you next time.