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Yes. If you use both, you can work it so you hit the maximum 53k per year, or 59k per year if you are 50+, and have a big chunk in the Roth side so you won't ha
by bluetwo 10y ago
Yes. If you use both, you can work it so you hit the maximum 53k per year, or 59k per year if you are 50+, and have a big chunk in the Roth side so you won't have to pay taxes on the money later (You pay now, of course).
https://www.nerdwallet.com/blog/investing/roth-ira-roth-401k-roth-solo-401k-whats-difference/ https://www.nerdwallet.com/blog/investing/roth-ira-roth-401k...
- loeg 10y agoWhy would you do that instead of just putting away 53k pre-tax, as a self-employed with Solo 401(k)?
- bluetwo 10y agoIn theory, having a chunk in the Roth is a better deal. You pay taxes on that money now, but down the road, you don't have to pay when you withdraw. Assuming it has grown multiple times, you pay much less in taxes by doing it now. And, you are not forced to take mandatory withdrawals when you are older. I understand the penalty for early withdraw, should you need to do that at some point, is more forgiving with a Roth as well. It is more paperwork and more math to setup both.