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401K Question
Old 10-19-2018, 07:01 AM   #1
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401K Question

Good Morning -

One of our son's is somewhat unconventional, bless his heart. Unlike my wife and I who were 9 to 5, corporate, type workers, he is more of an entrepreneur. He is self supporting but because of his world wide adventures he does not have the benefit of a corporate 401K offering. And for me and my wife, the 401K was the only reason we could retire early.

My question is can he create his own 401k or similar retirement fund? He does max out his Roth IRA but in the long term, he needs to save at a higher rate to retire early.

Appreciate any of your ideas how he can save more for his retirement.

And just in case, we're playing Mega Million tonight too.

Thanks
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Old 10-19-2018, 07:30 AM   #2
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Yes, he can open a Solo 401k, also called an "Individual 401k", at a discount brokerage like Fidelity or Vanguard.
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Old 10-19-2018, 07:43 AM   #3
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"World wide adventures" may be decisive, in that it is not known how income flows to him.

For example, his income could be self-employment, paid by foreign or US businesses on 1099 basis, and all handled on his US 1040 form. In this case, he would have self-employment income to support a Solo 401k.

OTH, he may be taxed on the income by foreign businesses, and he gets credit for foreign taxes paid when he completes his US 1040. In this case, you should examine closer.
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Old 10-19-2018, 07:55 AM   #4
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Obviously, he could also invest in a taxable account.
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Old 10-19-2018, 08:00 AM   #5
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of course about the taxable accounts.

His income is mainly US businesses that are doing startups around the world in fresh water production, countries like India and Africa where there are significant problems with water pollution from arsenic and other compounds. he really does nice work but needs to remember that retirement funding is important too.

So I will start investigating Solo 401Ks at Vanguard. He has his Roth IRA there.
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