With one employee, you could also probably pay yourself as an employee and set up a profit sharing plan on top of a 401k. Again there is some cost and administration. You’d have to work with somebody who sets up small company 401ks to see if the benefits are worth the costs, including the modest employer contribution and profit share to your employee.Thank you.
There is no 28% tax bracket right now. You are in a higher marginal rate than that.
If you are self employed have you considered a solo 401k? You could substantially increase your retirement contributions.
Yes you should invest more of that half million in cash. Theoretically lump sum is best but it may feel better if you DCA in. I’d put more than $10k a month in. Perhaps 20-25k a month.
Given your high income you may consider a self employed defined benefit plan. You need some help setting it up and administering but the tax savings could be worth it.
https://www.mbopartners.com/blog/self-e ... e%20income.
I misunderstood the tax rate question, I put my average rate instead of my marginal rate. I have corrected this in my original post, it was 35% for 2023 but possibly 37% for 2024.
I think increasing the contribution to 25k per month is going to be the most realistic change I can make. I think I can be comfortable with that.
I have an assistant who is a W-2 employee, I think that messes up the defined contribution plan idea because I would have to offer the same benefit to her I believe. That reminds me I have to see what to do about the SEP also, she is just at about 5 months with me, so I don't think any legal concerns yet but I know at 1 or 2 years I have to do the same for her I do for me. Just to be clear here, I am willing to offer her a retirement plan, not trying to avoid that.
Statistics: Posted by JBTX — Mon Apr 22, 2024 5:24 pm — Replies 14 — Views 1308
