I just had a meeting with my accountant, and it was super helpful and exciting.
Here are the two primary changes that I am going to make:
1. Going to convert my SEP IRA to a 401(k), and that will allow me to put away significantly more this year towards retirement.
2. Starting next year, I am doing an S-election on taxes. This will reduce the amount of tax-deferred money I can put away for retirement in subsequent years, but I will be able to take tax-free distributions that I can then put into the market and can draw upon them sooner than my penalty-free retirement age. I call this an absolute win!
She’s going to get the paperwork started to do payroll and other stuff like that.
She mentioned a 401(k) with a Roth component. I need to look into this. I am not quite sure how that works? I put in tax deferred money, and take out tax free money? That just seems too ridiculous to be true. I feel like I have read about Roth Conversion Ladders. Is this the same thing? Does anyone have experience with this?
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