Bob Fraser shows how entrepreneurs can stack multiple 401(k)s legally, including a solo 401(k) alongside a full-time job if you have a qualifying side business. At 65, he and his wife each contributed $77,500 to Roth solo 401(k)s this year. Solo 401(k)s work like a super-mega IRA with higher contribution limits that increase with age.
Let's talk about taxes. One of the greatest things that our tax code did for entrepreneurs is create 401s and solo 401s. Now people may think, now you may think I've got a full-time job, I don't qualify for a solo 401. You're wrong. I have a 401 through my employer. I also have a solo 401. So my Investment Hub business has 2 employees, me and my wife. We're qualified as a solo business. And what the tax code is trying to do is to create incentives for people like us to build retirement wealth and figuring that a lot of entrepreneurs are under-resourced in their retirement, and they are. So they've created this incredible program called Solo 401s. Now, my wife and I are both employees, so we can both have a Solo 401. Now, Solo 401s are insane. It's like a super mega IRA, and it's all accelerated based on age. So I'm 65 years old. I was able this year to put away $77,500 into tax-deferred accounts, and my wife did the same. Think about that in an IRA now and compound that for 20 years. And what's more is I was putting into a Roth. So most of that is a Roth. In fact, all of it's a Roth. It can be either tax deductible. It means it reduces your tax liability in the year you make the contribution, or it's Roth, which means it grows. And, and me, because I'm 65 years old, I can pull money out without penalty right now.
