Are you self-employed or a small business owner? Do you want a tax-free retirement? Take advantage of two of the best plans in one – the Roth IRA and the Solo 401(k) – with a Roth Solo 401(k), which now allows you to put away over $66,000 in after-tax Roth funds.

On this episode of Adam Live, IRA Financial founder, Adam Bergman, Esq. will discuss the Roth Solo 401(k) and all the benefits of the plan, which will allow you to make all contributions, both employee deferral and employer profit sharing, in Roth. This means you can put away up to $66,000, plus an additional $7,500 if you are at least age 50, after taxes and enjoy tax-free distributions during retirement.

Join us LIVE on Wednesday, October 4th at 1:00PM EDT!
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About IRA Financial:

IRA Financial Group was founded by Adam Bergman, a former tax and ERISA attorney who worked at some of the largest law firms. During his years of practice, he noticed that many of his clients were not even aware that they can use an IRA or 401(k) plan to make alternative asset investments, such as real estate. He created IRA Financial to help educate retirement account holders about the benefits of self-directed retirement plan solutions.

IRA Financial is a retirement account facilitator, document filing, and do-it yourself document service, not a law firm. IRA Financial Group does not provide legal services. No attorney-client relationship exists between Client and IRA Financial Group, its management, salespersons or IRA Financial’s in-house legal counsel. IRA Financial Group provides IRA retirement facilitation service and CANNOT provide Client with legal, investment, or financial advice. Prior to making any investment decisions, please consult with the appropriate legal, tax, and investment professionals for advice.

IRA Financial is not engaged in rendering legal, accounting or other professional services. If legal advice or other professional assistance is required, the services of a competent professional person should be sought. (From a Declaration of Principles jointly adopted by a Committee of the American Bar Association & a Committee of Publishers and Associations.). The scope of Professional Services does not include the costs of any custodian related services.

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How to Contribute $66,000+ in Roth in 2023

The Roth Individual retirement account (IRA) is a popular investment vehicle for retirement savings due to its unique tax advantages. Unlike traditional IRAs, Roth IRAs allow for tax-free withdrawals during retirement, making it an attractive option for those who anticipate being in a higher tax bracket in the future. While the contribution limit for Roth IRAs is set by the Internal Revenue Service (IRS) each year, it is possible to maximize your contributions and potentially contribute over $66,000 in 2023. Here’s how you can do it:

1. Understand the contribution limits: As of 2022, the yearly contribution limit for Roth IRAs is $6,000 for those below the age of 50, and an additional $1,000 “catch-up” contribution is allowed for individuals aged 50 and older. It’s important to stay informed about contribution limit changes, as they may increase in subsequent years.

2. Maximize contributions from earned income: Roth IRA contributions can only be made from earned income, such as wages, salaries, or self-employment income. To contribute $66,000 or more in 2023, you need to have earned income that exceeds this amount. Consider opportunities to increase your income through additional work, side gigs, or investing in assets that generate passive income, such as rental properties or dividend-paying stocks.

3. Leverage the “backdoor” Roth strategy: If your income exceeds the IRS limits for direct Roth IRA contributions (currently $140,000 for individuals and $208,000 for married couples filing jointly in 2021), you can still contribute to a Roth IRA by using the “backdoor” Roth strategy. This involves making a nondeductible contribution to a traditional IRA and then converting it to a Roth IRA. This method allows you to potentially contribute more than the regular limits, but it’s essential to understand the tax implications and consult with a financial advisor or tax professional.

4. Consider a Roth 401(k) if available: If you’re employed and your employer offers a Roth 401(k) option, it can be another way to contribute more towards your retirement savings. The annual contribution limit for Roth 401(k)s is $19,500 for individuals under 50, with an additional $6,500 catch-up contribution allowed for those aged 50 and older. By contributing to both a Roth IRA and a Roth 401(k), you can further increase your tax-free retirement savings potential.

5. Set up automatic contributions: Consistency is key when it comes to building wealth for retirement. Set up automatic contributions to your Roth IRA and Roth 401(k), contributing as much as you can afford each month or pay period. This not only ensures that you’ll reach your contribution goal for the year but also helps you take advantage of dollar-cost averaging, which can smooth out market volatility and potentially increase your overall returns.

6. Make use of windfalls or bonuses: If you receive any unexpected windfalls, such as a work bonus, inheritance, or tax refunds, consider allocating a portion towards your Roth IRA or Roth 401(k). By using these one-time sums, you can boost your contributions and get closer to your target of $66,000 or more for 2023.

7. Monitor your contributions throughout the year: Keeping tabs on your contributions throughout the year is crucial to prevent exceeding the yearly limits. Regularly review your contributions and adjust as necessary to ensure you do not surpass the thresholds.

Remember, while contributing over $66,000 in Roth in 2023 is achievable, it may not be suitable for everyone’s financial situation. Assess your income, expenses, and future retirement needs before planning your contributions. Consult with a financial advisor to tailor a strategy that aligns with your goals and objectives. By maximizing your contributions to a Roth IRA and potentially utilizing a Roth 401(k), you can take advantage of tax-free growth and enhance your retirement savings for the future.