Solo 401(k) (Traditional and Roth)
Chapters in this video
- 0:00 Who qualifies for a Solo 401(k) and why spouses are the only permitted employees
- 1:23 Employee hat versus employer hat: how the $72,000 total is built
- 2:24 Traditional pre-tax versus Roth tax-free growth and qualified distributions
- 2:51 Loan provisions: the $50,000 or 50% vested balance rule
- 3:05 Catch-up tiers by age: nothing under 50, then $8,000, then the super catch-up
- 3:28 The age 60-63 super catch-up of $11,250 and the drop to $8,000 at 64
- 4:28 The $150,000 prior year FICA wage threshold and mandatory Roth catch-up
- 5:29 Rapid-fire exam recap
What this video covers
- Who qualifies for a Solo 401(k): self-employed individuals with no employees other than a spouse, and why this distinction matters versus a Simplified Employee Pension individual retirement account (SEP IRA)
- The 2026 total combined contribution limit of $72,000 and how it is built from the $24,500 employee deferral plus the employer contribution of up to 25% of net self-employment income
- The employee versus employer hat concept and why net self-employment income is calculated after the self-employment tax deduction
- The Traditional (pre-tax) versus Roth (after-tax) designation options and the tax treatment of qualified distributions from each
- The standard $8,000 catch-up at ages 50-59, the $11,250 super catch-up at ages 60-63 only, and the mandatory drop back to $8,000 at age 64
- The Roth catch-up mandate for employees with prior year Federal Insurance Contributions Act (FICA) wages over $150,000 and the flexibility for those at $150,000 or below
- Loan provisions in Solo 401(k) plans: up to $50,000 or 50% of the vested balance, whichever is less
Read the full lesson, free
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