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I am hoping somebody can simply examine my pondering as I am attempting to assist my aged mom out. She’s at the moment 75 and nonetheless working incomes ~70k a 12 months. She most likely has a very good 3-4 years left working full time. She has a good portion of her retirement financial savings in non-tax advantaged brokerage accounts from a latest sale of her dwelling. She’s at the moment self employed, so I used to be pondering of serving to her open up a Solo 401(okay) by way of Vanguard so she will be able to shift as a lot cash as doable from her non tax advantaged brokerage account to the Vanguard 401k in order to cut back her taxable earnings as a lot as doable proper now whereas she’s nonetheless working. I used to be going to max it out with $30k because the ‘worker’ and another quantity because the employer – truthfully nonetheless having quite a lot of hassle figuring this worksheet out. If anybody has a hyperlink to an easier clarification of how you can calculate what the max ’employer’ contribution my mother could make I would recognize it as I discover this portion of the IRS web site to be fairly complicated.
My pondering is that this makes extra sense than placing it right into a Roth 401(okay) as a result of she’s typically planning on solely residing on her SSI and RMDs from her 401k in retirement and may have much less earnings. It is also higher than utilizing a SEP IRA as a result of the solo 401(okay) has a better total restrict between employer and worker. Does this typically make sense? Ought to I maintain anything in thoughts?
Thanks for any enter.
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