Transcript:
(00:00) see when you make 401K contributions you’re doing two things you’re making an employee contribution and an employer contribution sometimes called the match yeah you could shovel more money into a 401k you can more investment Capital um really great tools um and the fact that you can not only contribute you know Roth money but also traditional money so we’ll talk a little bit about that is what’s the benefit should I put Roth money in my 401k should I put traditional should I put both hey welcome everyone to the directed Ira
(00:36) podcast this is Matt Sorensen I got a substitute teacher here filling in for Mark ker we’ve got the Great and Powerful Nate here I love that nickname I’m gonna come on more often that’s right yeah that’s a good one um well we’re excited this is the last podcast of 2023 and we figured we’d go out with a bang we are talking about solo 401ks this is the number one self-directed account for people who are self-employed it is confusing I hate to say it sometimes it’s confusing and people screwed up so we are going to get into
(01:03) the detail in today’s podcast of how the contribution rules work how do you do this if you’re an escorp if you’re a sole proprietor do you need to worry about 1231 deadlines what about April 15th what are all the rules how much can I put in what kind of company put in is a match should I do Roth or traditional we’re going to cover all that that’s the podcast about today um love it and N what do you just think about the solo K just give me your it is quite possibly the best retirement plan can have especially if you are a small business
(01:32) owner real estate investor somebody that owns a small company that doesn’t have employees I mean it really is probably the way that you can put your retirement on steroids yeah yeah because you can put in $66,000 a year for 2023 we’ll get into 2024 numbers right that’s like 10 times what you can put into an IRA right yeah you could shovel more money into a 401k you could more investment Capital um really great tools and the fact that you can not only contribute you know Roth money but also traditional money so
(02:05) we’ll talk a little bit about that is what’s the benefit should I put Roth money in my 401k should I put traditional should I put both yeah you can do a little bit of both you can do different amounts and years it be like I’m going to do Roth this year I want tax section next year so I’m doing traditional you can mix it up you know yeah you can get pretty strategic with it yeah and if you got a spouse involved in your business you can do 66,000 for your spouse we’ve got a lot of other podcasts and just about how do you
(02:26) qualify for the solo K but like Nate said if you’re self-employed with no other employees now this could be partners or family or spouse those are all fine but third party employees if you’re you know you’re a dentist and you got 10 employees this doesn’t work for you because the solo K really turns into a group 401K that you have to offer to your employees you have to do all this amazing matching that you not going to do because you’re only doing it if it’s yourself so this is kind of a unique plan for self-employed people maybe you
(02:53) got a side hustle um but you have no other employees I think like real estate agents are super common for this Real Estate Investors Consultants yeah and EMP by employees we usually mean somebody that you’re W toing or you have some sort of control over a lot lot of people say well what if I’m Contracting hiring contractors that is not typically your employee yeah totally fine they’re $199 you don’t have to offer a 401k plan to them so um but we got a lot of content that what we want to focus on today is contributions
(03:20) getting the money in does 1231 matter and so let me hit that first point on 1231 and then Nate will kind of walk us through contribution rules and how much and stuff for 2023 so we are super busy right now setting up solo case for year end you might be listening to this into 2024 um but here’s why it may matter for having your solo case set up in 2023 this is the only situation where it’s absolutely critical to have it set up by a year end see when you make 401K contributions you’re doing two things you’re making an
(03:54) employee contribution and an employer contribution sometimes called the match if anybody’s had a 401k a day job right you put a little bit in and the company doesn’t match where in the solo K you do that on steroids you’re like well I’m the employee and I’m the employer so I’m going to do the most generous match possible to get on the maximum amount under the rules 66,000 n will break it down here in a minute but like because I’m such a great employee so I’m going to Max the the thing out if you are an S corporation here is the number one thing
(04:23) for 1231 that’s important you must have the plan set up by 12:31 meaning the plan documents are signed in order to make employee contributions for 2023 now you can set up the solo K in February March if you file an extension on your escorp tax return you can set up a solo cap until September of 2024 and make 20203 contributions that are employer contributions the employer contributions you can always make even if you don’t have the 401K plan set up in the year you get up until the tax return deadline plus extensions to do employer
(04:58) contributions you’re totally good the only one that is a little tricky is the employee contributions for an escorp and here’s why it’s important when you’re doing employee contributions in an S corporation that’s going to go on your W2 in January now technically you must be have elected the contributions in 2023 and if you didn’t have a plan set up in 2023 how is it possible you actually elected the contributions if you didn’t have a plan set up in 2023 hasn’t been challenged in the courts but that’s kind of the rationale on that now
(05:29) the next hurdle let’s say you set it up in January and you’re like well I’ll roll the dice on that that hasn’t been settled by the IRS but but I set up the solo K in January okay well now I got to get your W2 done your W2 is going to be done need to be due by January 31st and employee contributions for an escorp are on your W2 so that is going to be on your W2 the employee contribution whether it’s traditional or Roth that’s still got to hit your W2 in an S corporation so you’ve have this planning requirement you don’t have to have the
(05:58) contribution in yet we’ll get to that later but it must be on your W2 of how much you’re going to elect for an employee contribution if you’re a soul prop LLC Soul prop or a partnership or anything like that under secure 2.0 the recent last retirement law you you can set up the solo K before the tax return deadline which again could be March 15th or April 15th it’s March 15th if you’re an escorp or a partnership April 15th first sell for so Proprietors plus the extensions which can get you up to October 15th for for S Pro ERS and
(06:30) September 15th for S corporations so you have all the way up until those deadlines to actually get the money in um and even to set up the plan so don’t worry if you’re a sole proprietor and you’re like I didn’t set it up in 2023 doesn’t matter it’s not going to affect you at all it only matters for the escorp owners on the employee contribution only does that make sense it makes sense it could get a little confusing uh but that’s another benefit to the 401K is you have a lot of time to make those contributions cu
(07:00) contributions can go to the extension deadline Ira cannot yes right this freaking confusing so um this is the tax code of course that’s you know why can’t yeah yeah that’s yeah job security for those of us in the business so um all right well let’s get into like how much you can put in um and let’s let’s talk about 2023 but also mention 2024 a lot of people will be doing those contributions so why don’t you break down how that works now so for 2023 if you can make your employee contributions your employee contributions go up to
(07:31) 22,500 now if you’re over the age of 50 or at the age of 50 you can add another 7,500 to that so you’re right at $30,000 if you’re over 50 to make that employee contribution now as far as the employer contribution in totality your contributions can’t exceed 66,000 for 2023 735 if you’re above the age of 50 now here’s the cool thing 2024 they are raising it just a little bit uh your employee contributions can go up to 23 ,000 for 2024 uh the catchup still the same at age 50 you can throw another 7500 in there so you at
(08:06) 30,500 and the total contributions between employee and employer for 2024 is now 69,7 65 for over 50 so a lot of money you can shovel into a 401k provided your income justifies that yeah and that’s the thing is it’s it this is based on your income we’re going to get into calculations on how much you can put in but those are the caps on what you can do and so for 2023 for example they said 225 employee a Max of 66,000 that means your max employer contribution could be 43,500 right so um but let’s break it down a little bit let’s talk about I
(08:44) want to talk about Sole proprietorships and S corporations separately as as tax lawyers and even our Law Firm kqs lawyers we’re always recommending s corporations for small business owners people who are self-employed got commission income you’re selling goods or services um or even you’re doing a side door 401K pushing management fees over there from your rental properties we love s corporations okay the S corporation is a great tool for saving on self-employment tax frankly someone making good money wanting to use a solo K you should
(09:12) probably have an ES Corporation now maybe you don’t there’s could be reasons why you don’t but the S corpor is going to be very common here is what I’m trying to get out in an S corporation your contribution is based on your W2 now I know a lot of people are like well that sucks Matt I’m using an S corporation because I want have a small W2 cuz I pay self-employment tax on that if I’m making 200 Grand a year I might want to do a $60,000 W2 and push 140,000 or whatever through his profit or you know what whatever the calculation might
(09:43) be so I’m going to try and take a small W2 you mean I don’t get to count my K1 and the profit I only get to count the W2 yes this is why you got to this is where we talk about The Sweet Spot and you got to dial it in right so you get the maximum retirement contribution of what you want to put in MH um by paying the least amount of self-employment tax possible now let’s take 60 Grand let’s say someone had a W2 for 60 Grand so how much could they do as an employee contribution on 60k so here’s the cool thing with the employee portion you can
(10:13) make it up to your your income level not to exceed 22,500 so the first 22,500 you make you can throw that in as a Roth or or traditional contribution to the employee side now the employer side you’re going to take if you’re it’s a W2 yeah you’re going to take 25% of that 60,000 yeah so that would be 15,000 right so I’m doing 15,000 plus 225 so on a $60,000 W2 I got in 37 which toal considerable amount for only 60,000 yeah now you said earlier employee could be Roth or traditional and starting in 2023 this is the very
(10:48) first year where you can do an employer oh Roth contribution just last week during right before Christmas say have they come out with the paperwork on that they just barely came out with regs I’m writing an article on that so be checking make sure you’re sign up for the newslet been waiting for this by the way for a long time of course the IRS issues it like the week before the end of the year they had to do it by the you know because people are going to need to know how to report this so um but for 2023 your
(11:15) employer contribution the point we’re making here can be Roth or traditional before you only you could only do traditional 2022 and before the employer contribution always had to be traditional but now you have the ability to do Roth or traditional big change that’s a big yeah and that’s cool for people who are Roth fans now before you could just do traditional and convert it to Roth you could get the same end result but it’s just it’s a little more cleaner now you can go straight into Roth so um all right now let’s talk about where does
(11:43) this go on a tax turn I want to talk about that so we talked about the W2 is what we’re going to use what’s your W2 that’s going to determine for this es corpse the amount of contribution you can make and on a W2 that is where the employer sorry the employee contribution will go that’s a I forget the box number I probably have it here on my article um but that’s on your W2 and you’re going to put that there whether it’s Roth or traditional now I believe it is box 12 yeah box 12 at least that’s what it was in the prior
(12:17) years so box 12 is where you typically put that um now there’s a different code whether it’s Roth or traditional now remember if it’s traditional that’s a deduction when you’re doing your 1040 right that’s reducing my tax income if if it’s coded as Roth and you’re obviously having Roth dollars that are growing tax-free you’re not getting the deduction on it right so you this I we kind of talked about this on the last podcast is what are you investing in what are the things you’re going to do how do you want to grow your retirement
(12:45) how big is the tax deduction for you in high income years so again you can strategize this but people who love the Roth love Investments growing taxfree I mean put more Roth money in there yeah High income years maybe you want to put more you know traditional money in there but consult with the CPA consult with somebody that can advise you on that yeah so and I think a lot of people are like am I going to owe tax this year I want to just I know like the Practical immediate things you’re thinking is I’m chasing tax deductions and you know as
(13:12) in our law firm as tax lawyers we’re always like someone’s like I’m trying to save taxes at year end what do I do well a solo K is one of the strategies and if you’re trying to save taxes now you’re going to do a traditional contribution on the employee and the employer side if you’re like no I’m trying to save taxes in the future and build taxfree wealth for my future that can compound and come out totally taxfree obviously we’re talking Roth and and if you’re getting confused what I would say is just just
(13:39) remember the basics the 401K allows you to put massive amounts of money in as a contribution so whether you’re going to take the tax savings on the front end or t take the tax savings at the end through the growth I mean just make sure you get it set up make sure it’s in by the deadline and make sure you get those contributions in because the more money you get in the 401K the less money Uncle Sam can touch yeah and so for us Corp owners you’re making that decision right now you need to be knowing and thinking
(14:03) how much is my W2 going to be make sure that your employee contribution whether it is traditional or Roth and you need to decide that because it’s going to be on the W2 how much is the contribution going to be and you need to determine whether it’s Roth or traditional now we’re talking employee only right now we’re going to come to employer in a second you do not need to put the money in you can and I would put the money in if you have it start investing it already start growing it but you don’t have to you actually have until the tax
(14:31) return deadline even though it’s on your W2 you don’t have to put it in for your escort boners your tax return deadline is March 15th plus extensions you get a six-month extension up to September 15th if you do file the extension so you have all of that time to actually get the money in that’s huge yeah that’s huge get it on the return get it get the money in later yeah all right now let’s go over employer here for a second now in an S corporation employer that contribution is going to be on your 11 1120s there’s a line an expense line on
(15:02) the 1120s form for employer contributions that is where you’re going to put your solo 401K employer contribution now this is where the guidance from the IRS is going to be critical if you’re doing Roth on your employer contribution so we’re going to have a newsletter article on that in the next two weeks make sure you’re signed up for the newsletter go to directed ira.
(15:23) com there should be a link here in the show where we’re going to have that where you can go sign up for the newsletter um but that’s going to go over the rules on Roth cont butions for solo 401ks and also sep iray by the way because you can do Roth contributions on seps and those rules finally freaking came out a week ago all right so um let’s transition over to soulle prop though let’s take that same example of um well let’s do 60k let’s say you’re a so proprietor y okay there’s 2023 numbers let’s say you made and this is on your net income on Schedule C so
(15:57) that’s the number you’re going to look at net self-employment income on Schedule C for any of you s Proprietors if you’re a single member LLC just disregarded entity going on to schedule C you’re a sole proprietor so let’s say you had a you made a 100 Grand in gross sales you had 40,000 in expenses your net self-employment income is 60k now at 60k how much can I put in to a solo K so on the employee side you’ve got the same because you can max out your contribution there we’re talking 2023 22,500 now since it’s sole prop we have
(16:32) to take we got to factor in some self-employment tax so it’s not the even 25% but it’s roughly 20% yeah so off $60,000 at 20% that’s an extra $112,000 into the 401K so you’ve got 225 and 12 get you to 245 yeah and so that match on the sole proprietor is that the easiest way to do it is just run 20% you can actually do a worksheet the IRS has a worksheet you can use to figure it out it’s almost like a freaking riddle trying to get that thing right I swear it’s like what the heck are they talking about as a tax lawyer I’m like geez good
(17:06) Lord but if you just take 20% it’s going to hit and it’s actually a little under I think what it does because there’s all this calculation of the self-employment tax and you get a credit back for that that you pay and yada yada and how it comes out so I just like running 20% as your number you’re going to and if you want a little rough estimate on the income you need I believe we have a calculator on the directed Ira website there you go great point I forgot about that there that’ll give you the exact that’ll like so you know so you plug in
(17:32) your income you basically tell what type of business you have and it’ll give you a rough estimate as how much you can put into that 401k yeah and that’ll be whether you’re escorp and you can say I’m an escorp versus I’m a sole proprietorship or a partnership that’s going to run you up because if you’re a in a general partnership too that’s also going to be what’s your net income on the K1 in an operational business not a rental income because that doesn’t count for solo case but if you’re a general partnership it’s going to be that same
(17:56) 20% match instead of 25 5% so the 25% is what you get for ES corpse 20% is what you’re going to get on sole proprietorships now the nice thing about sole proprietorships on the positive side even though it’s 20% instead of 25 the nice thing on the sole proprietorship is I don’t care about anything getting set up in 1231 for employee or employer contributions it doesn’t matter all of those can be made this was inse Secure act specifically it said you can set up your solo 401K by the tax return deadline plus extensions
(18:24) and make all of your employee and employer contributions because there’s no W2 see on the es corpse the IRS is like ah we can’t let that fly all the way to the tax deadline on ES Corps because they need to put it on their W2 and that was due January 31st but the sole Proprietors you don’t do a W2 for yourself in a sole proprietorship it all just goes on Schedule C so we will just let you do it up until the tax return deadline so um and that’s going to be April 15th for you um sole props so you have up until April 15th even set up the
(18:55) solo k plan um uh Plus extensions really you have until October 15th if you extend your personal return which is where your schedule C goes um and then you that’s the same deadline in terms of getting the money into for employee and employer now we gave the example you know we were doing 60k there obviously if you were 50 year older you would have had another 7,500 bucks on top of that um so all right anything else you want to say on contributions employee versus employer here’s one interesting thing to keep in mind a lot I get this question a
(19:28) lot how much do I have to make in order to max out my 401k contribution so for 2023 if you’re w2y okay to max out your contribution to both employee and employer you have to show $174,000 of income if you’re Soul prop how much do I have to make in order to contribute the max 2ou 27,500 yeah so let’s just run the math just so you see how that works because at 174,000 this is an escorp okay remember you get to take 25% of that so take 174,000 time 0.
(20:01) 25 that’s 43,500 right and I got to take 22,5 as the employer employe as employee right so that gets you to $66,000 that gets exactly to the 66 so um and then let’s run the sole prop again this is the 2023 numbers so we had what 2175 2175 okay 2175 time2 43,5 a r of numbers on the calculator here we were like calculating these to make sure we got them um so that’s 43 plus I would have already had the 225 cuz I at least made 22,500 on the employee side that gets me to the 66,000 now again if you were 50 or older you’d have 7500 bucks on top of that you don’t
(20:40) need to make more income you just would have automatically got that we don’t need to increase that um and then for 2024 it’s going to be a little more I don’t know what it’s going to be you know but it might be the es Corp it’s going to be you need to make 178 I don’t know it’s going to be just a little bit more those are good numbers to remember good numbers to shoot for if you’re trying to maximize the contributions get more money into that tax sheltered for yeah and I think the all the escort boners out there I know they’re like
(21:05) damn it Matt that means I got to take $174,000 W2 to Max it out yes and so you don’t have to and let me just run the numbers on this again that’s if I want to get $66,000 in okay I mean $174,000 W2 if you just take a $50,000 W2 okay $50,000 W2 you’re going to have 22,500 plus 12,500 cuz that’s 25% of 50 you’re putting in $34,500 on a $50,000 W2 that’s a pretty dang good contribution too so if you’re like man I can still get at least 34 Grand in on only a $50,000 W2 which if you’re making enough money to want to put 34 Grand in
(21:42) you better be taking at least a $50,000 W2 well and no offense to people that have seps or simples but this is why the 401K in some cases far outweighs that because you can make such a larger contribution based on even a small amount of income yeah so like what like just like great point cuz like the sep for example okay if I had a $50,000 W2 in my escorp in a sep I could put in 122,500 that’s it period period right I can put 34,000 and it’s not Roth money yet yeah yeah and I can do I can do more than double that yeah um with the solo
(22:16) 401K this is why we love the solo K Over the sep so um great point I forgot about that one um okay so those are that’s the max salary amount we need to make to do to max out the contribution if we want to for let’s talk about traditional and rot though so um let’s just give an example here on let’s say you put just for sake of the numbers here let’s say you put in $50,000 to your solo k for the year and you decided I needed tax deductions this year I put in 50k I wanted I’m going to get a tax deduction of $50,000 okay now
(22:53) whether this is the 220005 reducing your W2 or or this is the what is the rest of that 27,500 that’s an expense on your 1120s at the end of the day I’m getting a $50,000 ride off okay it’s reducing my taxable income by 50k if I am in a 30% tax bracket let’s say I’m in a let’s say I’m in a where do the math easy let’s say I’m in a 25% Federal 5% state tax P which is not a high bracket by the way you know what let’s just say you’re in a 40% tax bracket okay you’re in 35% Federal 5% State 40% tax bracket means on
(23:33) $50,000 I’m going to be saving let’s see how much in tax my saving there 20 grand 20 grand in taxes for every 50 Grand I make I’m paying $20,000 in taxes at 40% tax bracket so by putting that 50k into my retirement account I got a $220,000 tax deduction and that’s the Temptation right and that’s what everybody’s trying to do at year end is where are my deductions where can I get to save on taxes and we’re doing that as tax lawyers now that money’s in is traditional but you got that $20,000 tax deduction correct but tax savings say
(24:05) 50,000 tax deduction doesn’t make the tax go away but tax savings going in yeah but you’re if you’re not 40% tax bracket right that I’m saving 20 grand I’m I’m sending 20,000 less to the state and federal government because I made that $50,000 contribution now the con to that is the con to that is you do pay taxes when you take distributions so how aggressive are you investing the 401K are those uctions going to outweigh the taxfree growth you could have had if you had it in a Roth IRA there’s a lot of what ifs there but that’s something to
(24:35) think about so you could be like damn it I will send the 20,000 into the IRS in the state and pay the tax because I’m going to go Roth on that 100% And that 50k now could turn into 500k by the time I retire and that’s coming out totally taxfree right and you don’t have to make the decision as you put it in because most plans including ours at directed Ira do allow you to make the in planed conversion so let’s say you put it in as traditional and later you decide you know what I think it’s going to be better off in Roth you can contri you
(25:06) can convert those traditional funds to a Roth inside the plant yeah great point and that’s and just the clients that do the gymnastics sometimes I mean say clients they’re like I’m putting it in as a 2023 contribution of traditional dollars but then I’m actually converting it in 2024 and I’ll pay the taxes in 2024 next year in 2025 and I bought myself a little bit of a year it’s like okay or they say I’ll just I’ll convert it when I make less money but then they never me make less money so yeah yeah I know I love that are you planning to
(25:34) make less money next year no but planning on making less yeah it’s like no no no that’s usually not a good strategy and what results is people end up having traditional dollars forever so um which the IRS loves by the way the IRS would prefer you to have traditional dollars that they can tax forever yes yes they also love when you do convert to Roth to they do they a little bit money not that you should do stuff because the IRS likes it all right um all right let’s talk about the mega back door for a second I just want to
(26:05) hit that we we did a separate podcast on directed podcast Mark and I um about the mega backd door I want to say make sure everybody understands if you’re doing the mega backdoor Roth this is a way to do maximum Roth contributions on a smaller W2 um it works in a Solo K it can work at your day job 401K it doesn’t usually work if you own a business with other employees just so you know we kind of went over this in that separate podcast but for those you solo K owners what we’re talking about today doing a mega backd door
(26:35) Roth if you’re trying to do the 66,000 your W2 needs to at least be 66,000 okay and what the mega backd door is is it’s your regular employee Roth contribution of 225 plus the difference of 435 up to the 66 but you’re not doing that as an employer contribution at like a 25% match instead what you’re doing is an after tax employ employee contribution right okay which also has to be on the W2 which gets converted to Roth you have to do a Roth conversion of it in plan or you can roll it out to a Roth IRA actually so make sure you’re talking
(27:11) with a sophisticated Tax Advisor if you’re doing the mega back door Roth most people doing that use a sophisticated financial advisor or working with a tax lawyer competent tax adviser CPA so um so that’s the mega back door but I just want to say that needs to be on the W2 hence you need to have the plan set up by December 31st and you need to have your W2 Done Right by January 31st so this is like time critical if you’re planning to do Mega backdoor Roth and we normally don’t talk about this after tax contribution
(27:42) because normally you throw something after tax right you want it the tax you want or sorry before tax you want the tax deduction but on this you’re using it because you have the intention to make that backdoor Roth conversion yeah and and after tax is like this weird category of contributions you can do you have to account for it separately it’s kind of a pain in on the ass your CPA or Tax Advisor and your tax return is going to hate you for it um because it’s a separate form you got to fill out on your tax return what we always do with
(28:07) anyone doing after tax is you’re immediately converting it to Roth or you’re immediately rolling it out to a Roth IRA just because it is a pain in the neck and there’s no reason to have after tax dollars just get it to Roth immediately that’s the tax classification you want it’s going to grow and come out taxfree why would you not I’m like I don’t get why anybody leaves money as after tax if you’re going to put it in after tax don’t it in growing as a traditional convert it to a exactly yeah because you get the
(28:31) automatic ability to do that and there’s no there’s no tax on the conversion cuz you didn’t take a deduction for it you already paid the tax essentially so it’s if you got lost on that don’t worry this is a super complex strategy um we’ve got a lot of education on this online tons of Education tons of videos Mark’s got some video YouTube videos on it we got our podcast episodes on it um so a lot of their content there to to learn about the mega back door specifically but all right so let’s summarize here solo
(28:59) 401K awesome for any of you self-employed business owners you can put $66,000 a year into it um it could be Roth or traditional you can mix it up you can change it year to year it’s based on your W2 for any of you escort boners your net income for you so Proprietors make sure you understand the deadlines of when to set this up remember 12:31 only matters for you es Corps and it’s only on the employee contribution if it’s in 2024 and you’re listening to this don’t worry us Corp owners you can still do your employer
(29:27) contribution which is still pretty big all right you had a $100,000 W2 you put in $25,000 still for 2023 and you’re ready already for 2024 get those contributions in um as well and get that money invested um now for you so Proprietors remember it’s still the 66,000 for 2023 but it’s based off your net income the match which is it’s a 20% calculation you made 100 Grand on of net income 20% that’s going to be 20 grand plus you got the 225 so that’ be 425 in that example there can I add one one thing yes cuz you’ve got this in my head
(30:00) since last time you talked about this with IAS but I think it’s also important is get your contributions in as early as you can yes give yourself a head start to invest the money and invest it in a tax-free manner but you don’t have to wait until the deadline yeah yeah I always I always hate talking about retirement account deadlines because this is like you are late to the party your money should be invested early why are you waiting till the last day to invest the money in a tax deferred or taxfree manner reports have even shown
(30:26) that people with the larger retirement account are the ones that get their contributions in early in the year not right before the deadline exactly like and I just look at I just look at like our larger accounts I’m just telling you those people contribute in January yeah in January they’re not worried about making their 2023 contribution they’re already getting in their 2024 contribution once they have that earned income enough to satisfy the contribution they’re throwing it in in January because they want that money
(30:51) invested and to grow in that tax divert or taxfree manner they’re not worried about make waiting till last day they can put it in they’re worried about the first day they can freaking put it in right they’re getting a 16 or 17mon head start on their investing by just getting it early in the year yeah so um for those of you listening wait till January you just do have to have the earned income don’t do it on January 1st you haven’t made a dollar yet okay in the business so you do actually have to have that earned income but you can start
(31:17) making that in January February getting those contributions in um even for you Ira owners too I mean that’s great just start make that in January hsas if you got them set up throw them in early get them invested exactly um all right any other words of advice or common pitfalls or questions we think we need to hit um I think we kind of hit the nail on the head is is get prepared early don’t wait till the deadline we do have a lot of people calling in right now if you’re seeing this video it might be too late
(31:41) depending on the employee contributions you’re trying to make but just get prepared early and and that’s really all we can say yeah and get over to directed ira.com you can schedule a new account appointment with one of our senior account reps go over the solo 401K does it work in your situation we have competitive fees we have a fully self self-directed solo 401k plan approved by the IRS you can work with a lawyer in our firm if you want to consult you can just do docs only and keep it cheap and easy and fast and so we’re here to help
(32:07) you and be a resource for you and of course you can do whatever self- directing you want with this solo 401K you can invest in real estate you can buy small businesses you can invest in private funds or startups all these assets are something you can own in a Solo and if you want to just own stocks and do brokerage we have a brokerage option for your solo Cas too it’s very popular for a lot of solo K owners at least in their first couple years in particular they’ll just buy some stock mutual funds you can do that too yeah
(32:29) you can mix it up gold silver right talked about that right cryptocurrency whatever it is that you want you can have yeah is Bitcoin still up I don’t even yeah I know so um well thanks everybody for tuning in we’ll be back next week with another amazing of the directed Ira podcast until then stay calm self-direct on we’ll see you next year
