Rental Property Investor · Nashville, TN · Member since 2016 · 179 posts · 42 votes
Hi all,
I am planning to invest into Real Estate from SDIRA LLC or Solo 401k LLC. I as of now have a SDIRA. This year and next year I am getting self-employment income on 1099. I like to contribute as much as I can tax differed to the retirement accounts like solo 401k, IRA etc. I know that I can contribute to
Solo 401k $18500 + 20% Employer contribution
$5500 towards Traditional or Roth IRA
And then there are SEP IRA, SIMPLE IRA etc
I am wondering what combination of retirement accounts gives me the maximum contribution to the retirement accounts.
Your business may only sponsor one form of employer based retirement plan; either Solo 401(k), SEP IRA, or SIMPLE IRA, but not a combination. The Solo 401(k) will have the greatest capacity for contributions.
You may separately have an individual IRA. You can contribute up to $5,500, but may not be able to take a deduction for doing so. If you are covered by an employer sponsored retirement plan (i.e. the Solo 401(k)) your income level may prohibit deductions for IRA contributions.
I agree, the Solo 401k is the best bet for maximizing contributions as long as you are eligible for the plan. Contributing to either a traditional or Roth IRA can be an added bonus. Note that while traditional IRAs can be transferred to a Solo 401k, Roth IRAs cannot.
Also, note that you cannot contribute to both a solo 401k and a SIMPLE IRA in the same year if the SIMPLE IRA is also sponsored by your self-employed business.