Fellow Mustachians,
I am now self-employed and looking at different retirement options to maximize my pre-tax contributions. Based on the following info, what are my options?
Before I became self-employed, the 401K was maxed, my wife and i's IRAs were maxed, and our HSA was maxed. It's likely we will still be able to max them out still based on how business is going now. From my research so far, I am leaning towards a solo 401K because it allows for an employer contribution up to 35,000 for a combined limit of 53,000. The caveat is that the employer contribution is limited to 25% of the employee's compensation. As an s-corp, I don't want to have such a high salary because I will have to pay self-employment tax on it. The biz income will probably be around 150K and considering a salary around 50-60K.
Have also considered a Sep-ira to allow up to 12,500 to be contributed from the biz. Am still leaning towards a 401K though because of the possible mega-backdoor roth option too.