My husband and I are hoping to maximize our retirement savings this year and need some strategy help.
I currently have a 403b through work. There is no match from the company. I currently fund it myself at a total of just about 10% of my earnings annually (80% pretax and 20% post tax).
My husband has a pension plan at work which he makes mandatory 8% contributions to.
He just started a consulting business and we created a single member LLC. I am serving as Business Manager (so to speak). His current contract is large enough so that the funds will push our total earnings into a higher tax bracket than we've been in the past. We are hoping to save as much as possible of our total earnings pre-tax. I've looked at opening either a Solo 401k and SEP IRA.
I’ve been in a bit of a rabbit-hole reading about all of this. My questions for you all -
1. What is the overall pre-tax savings limit per person for 2020 and does that apply for all accounts (for example, my 403b AND any Solo 401k contributions for me)?
2. Does my husband’s mandatory pension contribution count towards that?
3. Are there any ways to increase that savings? (For example, if we have a Solo 401k, the company can match our contributions up to 25%...)
Our goal is to reduce our overall taxable earnings, ideally far enough to still be eligible to contribute in full to our Roth IRA's as well.
Thanks for your help!