Making contributions to your Solo 401k is a great way to grow your retirement nest egg.
The Solo 401k by Nabers Group automatically includes both Roth and traditional 401k accounts. Therefore, you can make both types of contributions to your retirement plan.
Traditional 401k contributions are pre-tax, and can be tax-deductible. Some investors choose to make traditional 401k contributions so they can reduce the amount of taxes they will owe. Your contributions grow tax-deferred, but you have to pay taxes on those funds when you make a withdrawal from the plan at a later date.
Roth contributions are after-tax. They are not tax deductible, but allow your funds to grow tax-free. The Roth 401k allows you to contribute to your 401(k) account on an after-tax basis – and pay no taxes on qualifying distributions when the money is withdrawn. For some investors, this could prove to be a better option than contributing on a pre-tax basis, where deposits are subject to taxes when the money is withdrawn.
Use this calculator to help determine the best option and strategy for your retirement planning.
Disclaimer: Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.