094 | Mr. and Mrs. Waffles on Wednesday (WoW) talk about winning on a TV game show, starting their own business, learning the tax code to maximize 401K contributions, and volunteering internationally.

How did Ray win on the Price is Right, and what did he win? What were the tax implications of his winning? How was Ray’s experience at the IRS building in Los Angeles? Why did Jonathan receive a tax penalty last year, and how did he respond? How did Mr. and Mrs. Waffles on Wednesday decide to start a blog, and how did they decide on a name? Why do we have to just live for weekends? How did Ray win-over Mrs. WoW to financial independence? What decisions did Mr. & Mrs. WoW make after they chose to pursue financial independence? How did the pursuit of FI change their careers? What type of business did Mrs. WoW open, and how did she keep her overhead costs down and ultimately increase her income? What is a Solo 401K and why did Mr. WoW choose that option? What is the advantage of a Solo 401K for owner and spouse, and how does the math work? How important is it to control your tax rate? What happened to the Mr. & Mrs. WoW’s retirement accounts when they opted to bring on an employee? What is a Mega Backdoor ROTH? How did Mr. WoW find a plan administrator who could help him set up his accounts? Does Mr. WoW manage his own taxes, or use an accountant? What adjustments has Mrs. WoW made in the past four years that made a positive difference in her life? How does someone volunteer for international aid organizations? Do Mr. & Mrs. WoW add some site seeing or vacation to the volunteering they do? How do they plan for these trips?

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Are you a small business owner or a self-employed individual looking for the right retirement plan for your business? If so, you may have come across the Solo 401K and the SEP IRA as potential options. Both of these retirement plans offer tax advantages and flexibility, but there are differences between the two that can make one more beneficial for you than the other. To help navigate this decision, let’s explore the features of each plan and compare them with a delicious treat – waffles on Wednesday.

The Solo 401K, also known as an Individual 401K, is a retirement plan designed for sole proprietors and small businesses with no employees other than the owner and their spouse. It offers higher contribution limits compared to other retirement plans, allowing you to sock away more money for your golden years. Similar to a waffle with a variety of toppings, the Solo 401K offers diverse investment options, including stocks, bonds, mutual funds, and real estate. This flexibility allows you to create a retirement portfolio that suits your risk tolerance and investment goals, just like how you can customize your waffle with different toppings to suit your taste buds.

On the other hand, the Simplified Employee Pension (SEP) IRA is another retirement plan option for self-employed individuals and small business owners. Like a classic plain waffle, the SEP IRA has a simple and straightforward structure. It allows for tax-deductible contributions, making it a popular choice for entrepreneurs looking to save for retirement while reducing their tax bill. The SEP IRA also offers greater flexibility in that contributions are not required every year, giving you the option to adjust your retirement savings based on your business’s performance.

Now, let’s imagine you’re at a breakfast joint on a Wednesday morning, trying to decide between a Solo 401K and a SEP IRA while indulging in a plate of waffles. As you ponder your options, consider the following analogy: the Solo 401K is like a waffle with an assortment of toppings, offering a wider range of investment choices and the ability to maximize your contributions. Meanwhile, the SEP IRA is akin to a plain waffle, providing a simple and tax-efficient way to save for retirement without the same level of investment diversity.

Ultimately, the best retirement plan for you will depend on your specific business needs and financial goals. If you want to maximize your retirement savings and have the ability to invest in a variety of assets, the Solo 401K may be the way to go. On the other hand, if simplicity and tax advantages are your top priorities, the SEP IRA could be the perfect fit for your business.

When it comes to making decisions about retirement plans, it’s essential to consult with a financial advisor or tax professional to ensure you’re choosing the right option for your unique situation. So, next time you’re torn between the Solo 401K and the SEP IRA, remember the waffles on Wednesday analogy and consider which retirement plan will best satisfy your financial appetite.