retirement accounts

[ralux7877]

Hi all,

I am a relatively new attending ( 2 years), an IMG ( no loans/debt), and a single parent (8 y/o- just started a 529 plan this year). I am very new to all this retirement planning ( as i grew up in Europe), but slowly learning.

My salary as an attending is around 200k ( academic institution), and i contribute in a 403(b)- up to 18,000k. This year i did some consulting, surveys and i will have some income on a 1099 ( it will not be a lot- less than 5k), but i was thinking to open a solo 401k.

what are the benefits of solo 401k vs back door roth? How much i can contribute to the solo 401k?

Since i have a dual citizenship, should i look into other investment options ( for European Union- i don't know if there will be any benefits in terms of taxes vs diversity vs long term stability/profit).

 

Thank you very much.

 

[jfoxcpacfp]

A solo-k and a backdoor Roth are not mutually exclusive - you can have both.

A solo-k will allow you to contribute 20% of your net profits to a retirement plan that is separate and in addition to your current employer 403b. The maximum that can be contributed to both accounts in 2017 is $54k (employee and employer), but that won't be a problem with only $5k of income. You must set up your solo-k no later than 12/31/17 to contribute for 2017.

A backdoor Roth allows high earners who are otherwise prohibited from contributing to a Roth IRA to fund one each year via the "backdoor".

These posts may be helpful to you:

• What Business Entity Should I Choose?


• What is a SOLO-401k?


• Small Business Retirement Plans: 401k's


• What is a Roth IRA and do I need one?


• Explaining Backdoor Roth IRAs

A final suggestion: as a non-native resident, you would almost certainly benefit from a relationship with a fee-only financial planner for a year or so. I don't want to discourage you from learning on your own, but having that extra resource to get you up to speed on everything you should and could be doing to improve your financial decision-making process should pay off handsomely. Also recommend an experienced CPA when you have IC income to help maximize your deductions, minimize taxes, and brainstorm for future opportunities.