What retirement vehicles are you using?

[Philip J. Fry]

How are you saving for retirement? Usually, here, people just talk about re-investing their windfall proceeds but no one talks about saving for retirement. So far, I've found tons of options for saving money for retirement, as a solo entrepreneur. For example, you can create a solo-401k and then do a mega backdoor roth conversion, which places ~60,000k in post-tax dollars into a roth. You can also do a roth conversion (not mega) and place 6,000 dollars into a roth IRA, even if you make more than the income limit. The benefit of these plans over a normal brokerage account is that you only pay taxes once. For example, with a ROTH, you pay taxes on it this year and withdrawals are tax free. If you used a brokerage account, you pay taxes on your income, contribute to your brokerage account, and then pay taxes on withdrawals. There's also SEP, SEPP, SIMPLE IRAs, and a whole tons of other options that the IRS made to help you save for retirement. What are you using?

 

[ORMAgencyDude]

re-investing their windfall proceeds but no one talks about saving for retirement

So I think people re-investing their profits, is their retirement. Just like in Real Estate, you keep re-investing up deferring the tax until you are ready to retire.

Same with non-RE reinvestment.. you keep reinvesting up and going larger each time until you cash out and "retire" in your businesses.

Do some people do it wrong and not reinvest up, or fail? Yes. But the same is true for those doing for retirement in reg 401ks and such.

You need to be thinking about what you want in retirement that eat up money and have those knocked out first.

1. You need housing, do you have that? As in full paid for and in your name where you want to live? You got that ranch in Montana or the condo at the beach? Or w/e you want to live paid for and owned yet?

Shit only gets more expensive as time goes by, so if you dont have it now then it will eat away the same to your compound interest in 30 years when you do, do it.

2. Got your healthcare paid for, for when you are 55+? That's gonna eat up money. I'd max out a HSA for long term tax free growth for when you get old and need medical paid for, have it paid for with tax free money. Put some RE into a HSA or some other business into a HSA and let that grow and pay your medical bills tax free. Your welcome....

3. Do you have something that can throw off passive income to you and mature as an asset as you grow older? This is why so many people ARE into RE. Income from retirement 401ks and such are nice, but there is a reason people do it from RE too while also having trad. retirement vehicles.

4. Then, only then.. would I look into retirement plans like IRAs, 401ks, SEP, etc. Take care of what you will need in retirement first ( house, medical, basic income ), then look at "fun" money with retirement plans.

 

[stackcash]

The first thing any financial professional would tell you is that it does not matter what other people are doing to save for retirement. Their situation has nothing to do with yours, so knowing how someone invests their nest egg is essentially meaningless to you. As a former RIA... I agree with that sentiment.

If you're truly interested in investing for retirement instead of living vicariously through other peoples investments, you've got to do the work to determine what vehicles are correct for your personal situation.

The American Association of Individual Investors is a great resource for education. Make a point to learn about asset allocation, the right types of investments for your income level, your personal risk tolerance and how it affects your investment choices, how planned expenses might affect your investing strategy, etc.

The one rule that you can hang your hat on is to never, ever, ever ask random strangers on the internet for financial advice. Even if your question was for entertainment purposes only...the answers you read will affect how you view investing.

Educate yourself and work with licensed professionals that have gone to school for this.

 

[Philip J. Fry]

The first thing any financial professional would tell you is that it does not matter what other people are doing to save for retirement. Their situation has nothing to do with yours, so knowing how someone invests their nest egg is essentially meaningless to you. As a former RIA... I agree with that sentiment.

If you're truly interested in investing for retirement instead of living vicariously through other peoples investments, you've got to do the work to determine what vehicles are correct for your personal situation.

The American Association of Individual Investors is a great resource for education. Make a point to learn about asset allocation, the right types of investments for your income level, your personal risk tolerance and how it affects your investment choices, how planned expenses might affect your investing strategy, etc.

The one rule that you can hang your hat on is to never, ever, ever ask random strangers on the internet for financial advice. Even if your question was for entertainment purposes only...the answers you read will affect how you view investing.

Educate yourself and work with licensed professionals that have gone to school for this.

I'm actually talking to solo 401k providers today. For 2021, you can contribute up to $58,000 into the solo 401k. This is employee and employer side. This is pre-tax money. It only costs $500 to setup and $500/year. You can then transfer the money out of the solo 401k to a roth ira or traditional ira if you so wish. Not bad! My coatfire number is only $400,000, so $58,000 is a big chunk.

@ORMAgencyDude keep hustling!

 

[bernard]

Nothing yet.

I have some old tax debt that I need to get rid of first.

Second, I will buy a home before I start saving, as that's a form of retirement in itself.