Self Employed, Young, High Income -How to structure savings? |
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Retire_early
New Poster
Cash: $ 0.45
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Joined: 08 Jan 2014
Location: USA |
Self Employed, Young, High Income -How to structure savings? |
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I am young (25) and am a 1099 contractor (my LLC is the "contractor" , I am the sole employee of my LLC) Any retirement account would be self employed / self directed, whatever the term. However, since I'd be running it through my business, I can contribute the max as an employer match (though it would not be a Roth contribution from my company)
I am saving around 6k/month and right now it's just sitting in a standard brokerage account.
I would like to start putting it into retirement accounts that can offer tax benefits- whether the benefit is now (lower tax bill @ 33% marginal rate) or later (I'm 25 so compounded growth would be huge)
I'm considering contributing the max (17,500) to Roth 401k and doing an employer match of 17,500 as a non-Roth contribution. Then put the rest into a traditional brokerage account, maybe a little into an HSA/FSA if needed. I don't know of any other options for investing/saving that will reduce my tax burden (now or later)
I would welcome any suggestions, especially from those of you who are self-employed!
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Wed Jan 08, 2014 6:18 am |
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oldguy
Senior Member
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Location: arizona |
How about a Simplified Employee Pension Individual Retirement Account? SEP IRA. They are designed for self-employed, they work like a Traditional IRA (age 59 1/2, age 70 1/2, etc), except that the annual contribution limit is $49,900 rather than $5000/yr.
Thr Roths that you mention are not tax-deferred, they won't hepl your present tax situation.
You could invest up to $4166/m (of your available $6000/m). If you use a SP500 Index (historic longterm average return 11%) that would be about $3,500,000 20 years from now. Also, you should maintain the standard taxable brokerage account, maybe at a no-load fund company such as Vanguard or Fidelity - agine, use a SP500 Index Fund. That grows tax-deferred, yet gives you immediately availble cash for per-59 1/2 retirement, business expansions, etc.
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Wed Jan 08, 2014 1:36 pm |
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Retire_early
New Poster
Cash: $ 0.45
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Location: USA |
Thank you for your post. I will look into SEP IRA, I thought they cost quite a bit to maintain but from a quick glance it sounds like they are not expensive.
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Wed Jan 08, 2014 5:34 pm |
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frugalasiandude
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I also second agree that SEP IRA. I would defintely look into that.
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Tue Jun 17, 2014 2:11 am |
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liwern
New Member
Cash: $ 1.00
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Joined: 22 Jun 2014
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Wow what an achievement at such an age! I'd advise to hedge some of your retirement savings in precious metals as paper money loses its value over time, what with the inflation and all. On the other hand, precious metals like silver and gold can act as a hedge in the event of any collapse. You can hit me up to know more as I work as a retirement fund advisor, or you could simply pay a visit to www.goldiraguardian.com.
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Sun Jun 22, 2014 8:29 am |
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Wino
Senior Member
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Location: Dubai |
liwern is a spammer. He only posts "invest in gold" posts. Ignore him until he changes.
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Sun Jun 22, 2014 9:04 am |
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liwern
New Member
Cash: $ 1.00
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Joined: 22 Jun 2014
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Not sure how you came to that conclusion. My expertise and interest is on retirement topics specifically on precious metals, does that make me a spammer if I only post to topics regarding gold? If you noticed I have also posted something in the introduction thread. Thanks.
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Mon Jun 23, 2014 5:53 am |
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oldguy
Senior Member
Cash: $ 751.85
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Location: arizona |
Oh please - did you really think that you could post this - """"Well if you are looking for hassle free, and less stress to deal with, I'd recommend to invest your savings or 401Ks in gold. There are plenty of gold rollover companies out there but the one we use is very reliable. You can check out xxx or hit me up for more information. """" - and no one would notice that you are a spammer??
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Mon Jun 23, 2014 5:04 pm |
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louiefrias
Member
Cash: $ 3.30
Posts: 16
Joined: 05 Oct 2016
Location: Las Vegas, NV |
Here's my advice... |
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Buy and read "Tax Free Retirement" by Patrick Kelly.
Then you'll be totally ready to make solid choices for your retirement.
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Wed Oct 05, 2016 9:02 pm |
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