Roth Solo 401k for consultant: The Ultimate Tax-Saving Plan

The hardest thing to understand in the world is the income tax.

Albert Einstein

A lot of professionals seek out the best methods of tax-saving with little luck. Taxes can have a significant impact on your financial life. In many cases, taxes can reduce earnings of hard working individuals, who’re saving for their retirement funds. Fortunately, you can significantly reduce the actual amount of tax you need to pay with effective planning. Whether you own a small business or you’re a self-employed entrepreneur, the Roth Solo 401(k) for consultant can be the best solution for you.

The Roth Solo 401(k) provides the perfect opportunity to get actual tax-free growth on your investments. When you make withdrawals, no additional hidden taxes are applicable. Get tax-free growth on investments for many more years with the plan.

What makes Roth Solo 401(k) for consultant the best retirement solution?

1. Income gains and investment growth are completely tax-free

The greatest benefit of 401(k) Roth Solo is the opportunity to allow your investment to grow tax-free. However, it is subjected to a few terms and conditions. No additional income tax or capital gains tax is applicable on your investments, a feature that will significantly improve your retirement fund returns.

2. You can make higher contributions

Unlike a regular Roth IRA plan with contribution limits of $5,500 and catch-up contributions of $1,000 for individuals above 50 years of age, Roth Solo 401k has higher contribution limits. Roth Solo 401(k) allows maximum annual contribution of $18,000, with $6,000 catch-up contributions if you are over 50 years old

Whether you run a small business or are a self-employed entrepreneur, the tax-free feature will increase your savings and allow you the flexibility to invest freely. Invest anywhere and make your own investment choices among stocks, real estate, bonds, tax liens, etc. It’s the best legally sanctioned tax-saving method for self-employed entrepreneurs and business owners.

3. Easily borrow money from your retirement fund

Roth Solo 401(k) for consultant offers a unique advantage that can be useful for business owners. It allows you to borrow money from your retirement fund and avail financial assistance during financial hardships. The maximum participant loan limit is $50,000 or up to 50% of the total balance. You can slowly repay the loan in five years, and you just have to ensure one premium installment per quarter.