Objective information about financial planning, investments, and retirement plans


  1. I’m going to open a solo 401(k) account at Vanguard soon. It finally make sense to contribute more and this will help with our tax bill next April.

    • Roger Wohlner says:

      Thanks for the comment Joe. I’ve looked at the VG solo 401(k) and it looks like a pretty good deal especially if you will investing all or primarily in VG funds/ETFs. Kudos for doing this and good luck.

  2. Matt Becker says:

    When evaluating the options for my wife we decided the a Solo 401(k) was definitely a better option for her than the SEP-IRA, mainly because of the contribution flexibility you describe above. I like the fact that it’s not limited to a percentage of your income.

  3. JoeTaxpayer says:

    Another benefit came to my attention. I have a pretax IRA, over $250K. I also have an account with deposits that I couldn’t deduct, $50K plus some gains.
    Any Roth conversion would be prorated, i.e. about 5/6 of the conversion would be taxed, as the IRS doesn’t care that these accounts are different, it’s one big IRA spread around to different account numbers. Now, once my Solo 401(k) is established, I have the opportunity to transfer the large account, plus the growth from the smaller account, and leave a sum equal to my post tax deposits. Once that’s done, any conversion is for 100% post-tax money, and I’m set up to deposit to an IRA and convert to Roth if I’m still above the Roth limit.
    The Solo-401 allows for spousal deposits as well, which sets up my wife to make the same move. 20+ years of tax-free growth on our combined $100K in post-tax IRA money is nothing to ignore.

  4. SamT says:

    I believe that the solo 401K is possible even if you have part time employees (working <1000hrs/yr). Is that correct.

    • Roger Wohlner says:

      Sam thanks for your comment. The Solo 401(k) only works for situations with a sole employee or if a partner and/or a spouse in the business. Otherwise this solution does not work with non-owner employees and you would need to look at another small business retirement plan.

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