Hi all. My wife and I are doing some financial planning and I think I have most of the basics figured out, but our main confusion comes in the form of the mega backdoor Roth strategy. Currently our plan is as-follows:
– Each of us max out our full-time job's Roth 401K plan at $23,000 each
– Each of us max out our personal Roth IRAs at $7,000 each
– I max out my HSA yearly at $4,150
– I max out my LLC's Solo 401K plan yearly at $46,000 (depending on the year)
– Invest the appropriate amount yearly for our newborn's 529 plan
We plan on utilizing the 401k conversion ladder strategy to withdraw early with no penalties.
The only other strategy I have heard of to further maximize our tax advantaged investments would be the megabackdoor Roth, but if we are already maxing out my LLC's solo 401K on-top of maxing out my full-time job's 401k plan, is there any point? Perhaps for my wife since she is not maxing any kind of solo 401k since she is not part of my LLC nor has her own?
Thanks for any advice! We are hoping to achieve FIRE someday.
How to Max Tax Advantaged Accounts – Taking Into Account LLC
byu/UnitedPurpose infinancialindependence
Posted by UnitedPurpose
3 Comments
Get your spouse covered on the same insurance and max the HSA to the family limit.
If you are high income you should not do Roth 401k.
Are you structured as an S-Corp? Because that might result in a lower tax burden net of fees. Otherwise you’re pretty much doing everything you can do unless you want to do something like UTMA
If you can afford to save $110k+/year and are looking for more, a Roth 401k sounds like madness to me. Why are you avoiding the immediate tax savings of your (presumably high) tax bracket?