If you’re self-employed or earning side income, you’ve got great options for retirement savings. This video compares SEP IRAs and Solo 401(k)s so you can see which one fits your situation best. Whether you want simplicity or flexibility, understanding your choices is key.

Topics Discussed:

• SEP IRA basics and benefits
• Solo 401(k) basics and benefits
• Key differences in flexibility
• Choosing based on income level

Transcript:

Hi everyone. It’s Paul Sydlansky, and welcome to Unlocking Hidden Value. If you’re running your own business, have a side hustle, or doing some consulting, today we’re going to talk about the best retirement vehicle for you.

The two vehicles we’re going to cover are the SEP IRA and the Solo 401(k). The SEP IRA is low-cost, very simple to set up, and allows you to contribute up to 25% of your net earnings to a maximum of about $70,000 per year. There is no Roth option, and there is no age 50 catch-up. A Solo 401(k) allows you to contribute up to about the same $70,000 per year amount, but you have a lot more flexibility because you only need to earn that $70,000 to be able to contribute that amount, while the Solo 401(k) might cost a little bit more, again, you have much more flexibility when it comes to how you’re going to contribute and when. So if you want simplicity and have a relatively high income, a SEP might be the right choice. If you want to maximize financial flexibility and have lower levels of income, a Solo 401(k) might be best for you. If you need help deciding, please reach out. We’re happy to help.

Lake Road Advisors, a Fee-Only, independent financial planning firm with offices in Corning, NY, Ithaca, NY, and Vancouver, WA, works with clients virtually all across the country. Paul Sydlansky, the founder of Lake Road Advisors LLC, has worked in the financial services industry for 20+ years. Prior to founding Lake Road Advisors, Paul worked at Morgan Stanley in Manhattan for 13 years. While at Morgan Stanley, Paul was a senior-level manager within the Institutional Equities Department. In 2018 he was named to Investopedia’s Top 100 Financial Advisors list. Paul received a Bachelor’s degree in Economics from Marist College and holds an MBA from New York University Leonard N. Stern School of Business. Paul is a CERTIFIED FINANCIAL PLANNER™ and a member of the National Association of Personal Financial Advisors (NAPFA) and the XY Planning Network. They can be reached by phone at the Corning, NY office at (607) 438-2914, Ithaca, NY office at (607) 463-8400, or Vancouver, WA office at (607) 292-2172 or at the firm’s website at https://lakeroadadvisors.com/

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.