You may have started gig working to raise some extra cash, to explore self-employment part-time, or to improve your work-life balance. But did you know you can also use your self-employment status to tackle the goal of securing your retirement? As a gig worker, you are likely eligible to open and use a solo 401(k), which is one of the more powerful tax-advantaged retirement accounts available.
The solo 401(k) functions much like a standard 401(k) in terms of tax advantages and contribution limits. What’s different about the solo 401(k) is that you have two roles to play. You are both the employee and employer, and you can contribute in either capacity — which makes for a very high contribution limit. The maximum employee and employer contributions in 2021 is $58,000 annually. If you are 50 or older, you also qualify for an additional $6,500 in catch-up contributions.
More Fromhttps://www.msn.com/en-us/money/savingandinvesting/gig-workers-get-serious-about-retirement-with-a-solo-401k/ar-BB1d4z0l the Motely Fool
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