Self Employed Retirement Planning
Lesson 15 from: FAST CLASS: How to Plan Your Financial FutureErin Lowry/Broke Millennial
Self Employed Retirement Planning
Lesson 15 from: FAST CLASS: How to Plan Your Financial FutureErin Lowry/Broke Millennial
Lessons
Class Introduction
02:04 2The Getting Financially Naked Playbook
10:05 3Financial Red Flags
02:51 4When and Where to Turn for Help
01:53 5Talking Money with Your Friends
04:58 6Stand Up for Your Financial Self
02:03 7Picking Financial Products and a Planner
03:57 8Ditching Bank Fees
03:52What You Should Expect from Your Bank Accounts
04:42 10Everything You Need to Know About Credit Cards
11:45 11Am I Ready to Hire a Financial Planner?
10:48 12Planning for Retirement
08:23 13Retirement Accounts
07:27 14Basic Investing Concepts
05:06 15Self Employed Retirement Planning
02:59 16Setting Up Your Retirement Account
04:07 17What Happens to 401(K) When You Leave Your Job
02:58 18Motivating Yourself to Save
03:47Lesson Info
Self Employed Retirement Planning
So now we are going to talk a little bit more about no employer sponsored retirement account. What do we do? And I get you because I am one of you now, I am self employed. So I've had to figure out how to do this myself. One is just a plain vanilla ira Roth or traditional like I said, I don't particularly care as long as you have one open, then you've got the sep ira, which is the simplified employee pension plan is what cep stands for. It sounds fun because pensions in the title And then you have something called a solo 401K. So again, 401K is actually can be for the self employed. I am going to briefly go over the details of these. They get very technical. I'm not saying that one is ultimately superior to the other. I'm not going to do a super deep dive. You really have to do some research for the kind of business model that you have. So I'm just gonna point out some pros and cons an ira right now in 2000 and 18 you can contribute up to $ if you're under $56,500 if you're over 50 whi...
ch is an okay amount of money. But we're going to get into ways that you can maybe put a little bit more away. I believe they just released the information and that they kicked it up to $6000. I'm pretty positive. Which then would be probably 7500 for 50 and up, not 100% sure, it might just be 7000. Now with a step, The perk of this is that you could put up to $55,000 away in a year. So if you are starting to earn big bucks as a business owner, a step is a way to start putting a lot more money away for the future and retirement because that really blows out of the water the $ contribution to a regular ira. But it's not that anyone can put away 55 brand. Your option is the lesser of 25% of your total compensation or $55,000. So if you're not making that level of money, for example, if you only made $50,000 in self employment income, you're capped at 25% of your income. That's still $12,500. That still blows $5500 out of the water. So that's what I'm saying for people who have the flexibility and the financial ability to save more than 5500. That's when you want to look at a set or a solo four oh one K. So you can be putting more money away for the future again with the solo four oh one K. Similar type of structure, you can do up to 25% of compensation with a cap of 55,000, the lesser of now, I don't want to get too much into the nitty gritty, but some of the reason people tout this as you could contribute as an employee and an employer if it's yours, so it's another way to double down on opportunity. Sometimes you can also add spouses to this scenario and it can come with a Roth option. So if you want to be putting away post tax dollars so you can take it out tax free in the future, you can do that with a solo following K A sep ira really is just all pretax income. So you're not getting the tax benefit in the future, You're getting it today.
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