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solo 401k for moonlighting

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  • jfoxcpacfp
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    Am I allowed to open a solo 401k if I also have an IRA? I think the answer is yes, but want to make sure.  The IRA is just for backdoor Roth purposes so it will be empty 365 days of the year. If I put 18k into my 403b, then the only money I can put in the solo 401k is my 20% employer match on my moonlighting income, right? Is it worth opening a solo 401k for only ~2k? Is there anything else I can do to get more money in retirement accounts?
    Click to expand...


    #2 - note that the contribution is based on the net profits from your IC income, not the gross (what you earn).

    #3 - the best use of your solo k in the beginning will not be for extra savings, but to serve as a receptacle if/after you leave your new job.

    #4 - retirement planning does not involve only tax-blessed "retirement" accounts. As Dr. Mom said, you should also include a taxable account in your portfolio for many reasons. Flexibility is and preferential tax rates are 2 of those reasons.

    Leave a comment:


  • Dr. Mom
    replied
    1. Yes

    2. Yes

    3. Yes.  You will have it ready to go if you ever switch jobs and need to roll into it.

    4. Even if you could, I would submit you are doing enough.  Start taxable investing as it will offer you much flexibility.

    Leave a comment:


  • kritas
    started a topic solo 401k for moonlighting

    solo 401k for moonlighting

    I’m starting my first job out of fellowship in the fall at an academic hospital. I regrettably have ignored financial planning until now and am trying hard to get up to speed and save aggressively for retirement.  I'm SO glad I found WCI!

    I have some questions about whether I can and/or should open a solo 401k.   Here's my situation:

    • I will have a 403b with employer match, 457b with employer match, an HSA.  I plan to max all of these out (18k+18k+3.4k).

    • Also plan do the backdoor Roth IRA, so I will open traditional and Roth IRA’s.

    • I’ve done a small amount of moonlighting during fellowship and will continue this as an attending. It’s about 10k/year of 1099 income.

    • For reference, I’m not married and have no dependents.


    Here are my questions:

    1. Am I allowed to open a solo 401k if I also have an IRA? I think the answer is yes, but want to make sure.  The IRA is just for backdoor Roth purposes so it will be empty 365 days of the year.

    2. If I put 18k into my 403b, then the only money I can put in the solo 401k is my 20% employer match on my moonlighting income, right?

    3. Is it worth opening a solo 401k for only ~2k?

    4. Is there anything else I can do to get more money in retirement accounts?


    Thank you so much for any advice and clarification you can offer!
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