The Solo 401(k) just got better!

The IRS issued new inflation adjusted retirement account contribution limits for 2023. Find out how they make the Solo 401(k) even better in 2023!

Here’s the IRS notice on 2023 retirement account contribution limits:

The example I discuss at 00:49 is for someone under age 50. Incredibly enough, the maximum if the solopreneur is 50 or older is even more: $30,000 in this example for 2023!

This video, the show notes, description, and any comments are for educational purposes only. They do not constitute tax, legal, financial, and/or investment advice for any person. Consult with your own advisors regarding your own matters….(read more)

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UPDATE: The Solo 401(k) Just Got Better!

If you’re a freelancer, consultant, or small business owner, you may already be familiar with the benefits of a Solo 401(k) retirement plan. It’s a great option for those who work for themselves and want to save for retirement while taking advantage of potential tax benefits. And now, the Solo 401(k) just got even better with some recent updates.

One of the most significant changes to the Solo 401(k) is the increased contribution limits. For 2021, the maximum contribution for those under the age of 50 has increased to $58,000, up from $57,000 in 2020. And for those 50 or older, the catch-up contribution limit has increased to $6,500, allowing for a total contribution of $64,500. These increases provide an opportunity for individuals to save even more for their retirement while reducing their taxable income.

Another update to the Solo 401(k) is the option to designate Roth contributions. This means that individuals can now make after-tax contributions to their Solo 401(k), which can then be withdrawn tax-free in retirement. This is a great option for those who anticipate being in a higher tax bracket in the future or want to diversify their tax strategy in retirement.

In addition to the increased contribution limits and Roth options, the Solo 401(k) also offers a high level of flexibility and control. As both the employer and the employee, you have the ability to make contributions to the plan and decide how those funds are invested. This level of control can be appealing for those who want a more hands-on approach to their retirement savings.

It’s important to note that the Solo 401(k) is designed for self-employed individuals or small business owners with no full-time employees, other than a spouse. This ensures that the plan remains cost-effective and straightforward to administer.

If you’re considering a Solo 401(k) for your retirement savings, these recent updates make it an even more attractive option. With the increased contribution limits, Roth options, and flexibility and control, the Solo 401(k) offers a powerful tool for self-employed individuals to save for retirement while potentially reducing their tax burden. Be sure to consult with a financial advisor to determine if the Solo 401(k) is the right choice for your individual needs and goals.