On Life and Love

Bogleheads’ Retirement Planning: Self-Employment Account Options

A 401(k) for MacGregor? Muy awesome.

I had no idea that there were traditional or Roth 401(k) options for the self-employed. I figured that Greg was due to be stuck with only IRAs, as well as a tangle of alphabet soup even I didn’t want to swim in: SEP-IRAs, SIMPLE IRAs, Keoghs, spousal IRAs.

This totally changes our game plan, even though we won’t hop to a 401(k) immediately.

Being a purely 1099-MISC darling, taxes are a sumbitch for Greg. Numerically, of course, it all shakes out, but actually seeing your tax bill is painful, even on a quarterly basis. I’m totally cool playing tax games with his income.

We’re both currently working through The Money Book for Freelancers, Part-Timers, and the Self-Employed (courtesy of J.D. Roth), which is beeyootiful. Can’t recommend it enough, because I’ve been tearing my hair out–oh, my dear locs!–trying to properly merge finances without just treating his income like a very nice windfall. We’re getting better.

Learning that there are deductible retirement account options from Bogleheads’ for him is a relief. Learning the tactics in The Money Book means we can take advantage of them.

Both Sharebuilder and Vanguard offer individual 401(k) plans. Pricing is tricky to work out, though.

There will probably need to be a spreadsheet involved as our saving gets fully underway.

(This is the fourth in my series of Bogleheads’ Retirement Planning-inspired posts.)