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Business and Retirement Updates

November 4th, 2020 at 09:54 pm

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?

1 Responses to “Business and Retirement Updates”

  1. terri77 Says:
    1604890898

    Roth conversion ladder seems vaguely familiar. Wish I knew more.

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