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Retirement options - W2 & 1099 income

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  • spiritrider
    1. No, employer retirement plan contributions can only be based on compensation from that employer.
    2. Yes, but...
      1. Unless you have reached the annual addition limit (2021 = $58K). A spouse's employer contributions will not increase total contributions. It will just reduce yours.
      2. Not to mention, your spouse to must receive a fair market value (FMV) wage for the actual tasks performed and actual hours worked.
    3. You always have tax efficient taxable investments. It is not as bad a disadvantage as many people think.

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    started a topic Retirement options - W2 & 1099 income

    Retirement options - W2 & 1099 income

    Hi all,
    I have part-time w2 income and 1099 income. My W2 employer does not offer retirement plans. My thinking was that an individual 401k is my best option but I’m open to other ideas.

    My spouse’s w2 salary covers other expenses so this income I’d like to dedicate completely to retirement/investments.

    1. If my 1099 income is less than the max contribution limit ($19,500) can my w2 income or my spouses income be used to max out my contribution.
    2. If I switch to “full time” on 1099 and have income high enough:

    -can I, as my self-employer of 1099 income, contribute beyond the $19500. For example the employer contribution (20% of net profits) until reaching the max?

    -can my spouse also get the “employer contribution” max for being for example my “bookkeeper”? He maxes out his W2 401k so I know he can’t contribute as an employee but can perhaps get a employer contribution (20% of net profits) via my 1099 income.

    3. If I lose the 1099 income and stick to part-time W2 income what options do I have outside of an IRA limited to $6000 max contribution?

    Thank you for taking the time to reply.