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I'm trying to become more responsible with finances, read everything about retirement accounts recently, but I can't find advice on this particular question.
Based on what I've read, the goal should be 1. emergency fund, 2. standard tax-free retirement accounts, 3. riskier investing. I got the emergency fund down, now I'm on step 2.
What savings/retirement accounts should I start maxing out first as a sole proprietor if my goal is looking very long-term, and retirement by 60 with the most cash in the end (I'm 27, not married)?
Is it Solo 401k, then SEP IRA, then Simple IRA? And once these are maxed out completely eventually, start a diversified investment portfolio with things like (1) e.g. Vanguard's Index, (2) other Stocks, (3) Bonds, (4) Mutual Funds and only then whatever else is left? Trying to create a plan for myself for years moving forward.
Can I actually fund all of these first three accounts, and if not, which one would be best? Is there any conflict between them (only 1-2 can be contributed to)? And are there other retirement account options I'm missing that I should include/focus on instead?
Also, is it better to max out one first and then move onto the next one, or spread out my contributions into smaller ones across several from the get go?
Finally, are the limits for some of these first three accounts set only for the year (and it resets the next year), or is there a total limit for any of these accounts for sole proprietors when you can't put any more money in, ever?
Sorry for a boatload of questions. I found a lot of answers as to what these are, but I'm confused on the best Plan of Action, so to speak, so that's what I'm working on. Any advice is really appreciated! Thank you!
depending on your income level, I'd start with a Roth IRA (or traditional IRA backdoor'd into a roth), then a Solo 401k if you have one with good options. If both of those are maxed out then taxable brokerage account or maybe real estate...
depending on your income level, I'd start with a Roth IRA (or traditional IRA backdoor'd into a roth), then a Solo 401k if you have one with good options. If both of those are maxed out then taxable brokerage account or maybe real estate...
I agree with making sure you max Roth contributions then whatever else you choose. At your age (27) you should have substantial balances by retirement age and you'll appreciate being able to take non-taxed Roth withdrawals.
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