The Franco Suarez Agency - Blog #ERISAThe Franco Suarez Agency - Blog #ERISAhttps://www.francosuarez.com/blogs/tag/erisaFri, 27 Mar 2026 02:45:52 -0700http://zoho.com/sites/<![CDATA[Don’t Miss Your Window: 2025–26 Enrollment & What’s New]]>https://www.francosuarez.com/blogs/post/don-t-miss-your-window-2025–26-enrollment-what-s-newUnderstand the 2025–26 health coverage updates — employer ICHRA rollouts, Medicaid/CHIP eligibility changes, premium tax-credit adjustments, plus telehealth and mental‑health expansions.]]>

Key Dates & Important Enrollment Changes


As you plan your health coverage for the year ahead, the clock is ticking. The Affordable Care Act (ACA) Marketplace open-enrollment period is your annual opportunity to enroll, renew or change coverage. At the Franco Suarez Agency, we don’t just help you pick a plan — we help you manage your health-care expenses and debt to build wealth for retirement. But first, let’s look at what you need to know now.


Key Dates to Mark

The Open Enrollment Period for 2026-coverage for plans through the Marketplace begins November 1, 2025. 

For most states, the deadline to enrol or change plans so coverage starts Jan 1 is December 15, 2025. 

The final deadline in most states for 2026 coverage is January 15, 2026 (coverage starts Feb 1 if you enroll after Dec 15) in many states. 

Note: Some states operate their own exchanges and may have different deadlines. Always check your state’s timeline. 

The enhanced premium tax credits that helped many pay lower premiums may be subject to change or expiration. If they lapse or are reduced, premiums could jump significantly. 

The rules for eligibility, verification and special-enrolment periods are tightening. For example, fewer year-round enrolment opportunities and more paperwork may impact your ability to change coverage outside the open-enrolment window. 

Missing the open-enrolment window means you may only enrol if you qualify for a Special Enrolment Period (SEP) triggered by a life event (job change, move, marriage, etc). 

We monitor the deadlines and alert you when it’s time to act — so you’re not scrambling at the last minute.

We evaluate your current coverage, help you compare plan options (including premiums, network, benefits) and the underlying cost-structure (deductibles, out-of-pocket maximums).

Importantly, we help you integrate the plan into your broader financial strategy: using flexible spending accounts (FSAs), Health Savings Accounts (HSAs), and other tools to not only manage expenses but reduce debt and build toward retirement. When you see health coverage as part of your wealth-building strategy, you’re not just buying another policy—you’re investing in your future.

We help you prepare: collect your income & household info, understand subsidy eligibility, project upcoming life changes (marriage, kids, job change) that might affect your coverage.

    Action Steps


      1. Mark your calendar for November 1, 2025 and December 15 / January 15 deadlines for your state.

      2, Gather documentation: household income estimate for next year, current health coverage details, major life events.

      3, Schedule a review with us now to preview your plan options and subsidy eligibility.

      4, Use your FSA/HSA wisely: we’ll help you map out how much to contribute, how to use the funds, and how this fits into your debt-reduction/retirement plan.

      5, Don’t wait for a crisis. A small change (job, move, marriage) can trigger a life event and a special-enrolment window — we can help you navigate that too.


    In Closing

    Health-insurance decisions often get relegated to “just another cost.” 

    At Franco Suarez Agency, we flip the script: your health plan is part of your financial foundation. The sooner you act, the better your ability to lock in the right coverage, subsidies and strategy. Let’s get ahead of the deadlines and build your plan for health and wealth.


    #ACAEnrollment #HealthCoverageStrategy #FSATools #BuildWealthNotDebt #FrancoSuarezAgency #PlanAhead


    Schedule a Call TODAY!
    ]]>    Wed, 22 Oct 2025 12:47:44 -0600    <![CDATA[Retirement Savings Just Got a Boost]]>https://www.francosuarez.com/blogs/post/retirement-savings-just-got-a-boostBoost your retirement savings with SECURE Act 2.0! Learn about the 401(k) super catch-up contribution, RMD updates, and more. Start planning today for a secure financial future. #RetirementPlanning #401kSavings #SecureAct2 #FinancialFreedom]]>

     Here’s What You Need to Know About the SECURE Act 2.0



    Are you ready for a game-changer in your retirement savings strategy? The SECURE Act 2.0 is rolling out new 401(k) provisions that could help you supercharge your retirement nest egg. Whether you’re a seasoned saver or just catching up, these changes could make a significant impact on your financial future. So, let’s break it down with a dose of humor, a sprinkle of authority, and plenty of actionable insights.

    The Super Catch-Up Contribution: Saving’s New MVP

    Here’s the headline: Starting in 2025, if you’re between the ages of 60 and 63, you’re about to gain VIP access to the world of retirement contributions. The SECURE Act 2.0 introduces the "super catch-up" contribution, allowing you to funnel even more money into your 401(k).


    What’s the Big Deal?

    • You can contribute the greater of $10,000 or 150% of the standard catch-up limit (which is $7,500 as of 2025). Quick math: if the standard limit holds, your super catch-up limit could hit $11,250.

    • Translation: You’re finally rewarded for being an overachiever, and your retirement savings get the boost they’ve been waiting for.


    Why Does It Matter?

    For many people in their early 60s, it’s prime earning time—a sweet spot to shore up savings before retirement. The super catch-up allows you to close gaps, prepare for inflation, and budget for those rising healthcare costs that are as inevitable as your next Netflix binge.

    As financial expert Ted Jenkins puts it, "The super catch-up offers a golden opportunity to bridge any shortfalls and strengthen financial security." We couldn’t agree more, Ted.


    Maximize Your Contributions: Strategy Is Key

    Now that you know the opportunity, let’s talk strategy. Here’s how to make the most of the new rules:

    1. Audit Your Budget

    Can you comfortably max out your contributions? If yes, great! If not, consider trimming some expenses (looking at you, daily lattes) to free up funds.

    2. Consult a Financial Advisor at The Franco Suarez Agency

    An advisor can help you:

    • Navigate tax implications of these higher contributions.

    • Align your retirement goals with your current savings strategy.

    3. Leverage Employer Perks

    Starting in 2025, employers may automatically enroll employees in retirement plans. If this applies to you, take full advantage of it. Automatic enrollment = less hassle, more savings.


    Other Notable Changes: More Than Just Catch-Up

    The SECURE Act 2.0 isn’t just about supercharging contributions; it’s a comprehensive upgrade to retirement savings. Here are some other highlights:

    Required Minimum Distributions (RMDs)

    The age for RMDs has been pushed back, giving your investments more time to grow before Uncle Sam demands his cut.

    Student Loan Matches

    Employers can now contribute to your retirement account based on your student loan payments. Struggling millennials, rejoice!

    Flexibility for Roth Accounts and Hardship Distributions

    New rules make accessing retirement savings easier during financial hardships. Plus, Roth accounts get a few friendly tweaks for added flexibility.


    The Bottom Line: Start Planning Today

    If you’re in the 60-to-63 age range, the super catch-up contribution is your chance to turbocharge your savings at a crucial time. Even if you’re not quite there yet, the SECURE Act 2.0’s broader changes are making retirement planning more accessible and advantageous for everyone.

    Here at the Franco Suarez Agency, we’re ready to help you navigate these changes with tailored financial strategies that maximize your savings and minimize your stress. Schedule a consultation with us today—your future self will thank you.

    Get Started Now
    Buy Me A Coffee
    ]]>    Wed, 15 Jan 2025 08:40:12 -0600    <![CDATA[Final Call for ACA 2025 Coverage]]>https://www.francosuarez.com/blogs/post/final-call-for-aca-2025-coverageLast chance! Enroll for 2025 ACA coverage by Jan 15 with The Franco Suarez Agency—your health sherpa and stress-free solution. Affordable plans, easy guidance, no headaches. Don’t wait! #ACACoverage #HealthcareMadeEasy #EnrollmentDeadline]]>

    The Franco Suarez Agency to the Rescue!

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    • Texas Health Insurance Premiums_ 2023 Analysis.wav
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    🚨 Stop everything! The ACA open enrollment deadline is January 15th, and The Franco Suarez Agency is here to save the day. Think of us as your healthcare sherpa, guiding you through the jungle of plans, premiums, and paperwork—without the headaches. 🩺💊

    Why Act Now (With Us, Of Course)?

    • 🏥 Avoid those "How did this ER visit cost THAT much?" moments.
    • 🌟 Affordable, personalized plans tailored just for you.
    • 🧘 Say goodbye to healthcare stress—we’ve got you covered.

    Why Franco Suarez Agency?
    Because figuring out healthcare alone is like trying to assemble furniture without instructions. We're the pros who make it simple, clear, and pain-free (no ibuprofen needed).



    What to Do:

    1. Visit HealthCare.gov or reach out to The Franco Suarez Agency today.
    2. Tell us your needs—we'll handle the rest like the healthcare ninjas we are. 🥷
    3. Sit back, relax, and bask in the glow of being totally covered for 2025.

    ⏳ Deadline Alert: Don’t miss your chance to lock in coverage. Let Franco Suarez Agency cure your healthcare headaches—before the clock runs out!

    👉 Contact us now! Your future self (and wallet) will thank you.

    Get Started Now
    Buy Me A Coffee
    ]]>    Mon, 13 Jan 2025 15:03:36 -0600    <![CDATA[Unlocks Talent Retention Through Student Debt Relief]]>https://www.francosuarez.com/blogs/post/unlocks-talent-retention-through-student-debt-reliefDiscover how the SECURE 2.0 Act revolutionizes employee benefits! Explore employer strategies for attracting top talent while tackling student debt. Franco Suarez offers expert guidance. #EmployeeBenefits #SECUREAct #StudentDebtRelief #FinancialAdvisor]]>

    Empowering Employers to Secure and Retain Skilled Professionals with Innovative 401(k) Matching Programs

    In the ongoing battle for talent, companies are constantly seeking innovative ways to attract and retain skilled employees. As the burden of student debt continues to weigh heavily on graduates, the SECURE 2.0 Act emerges as a beacon of hope, offering a solution that benefits both employees and employers alike. Under this act, employers now have the opportunity to provide a unique benefit—a matching contribution to an employee's 401(k) plan when they make payments toward their student loans.




    The significance of this benefit cannot be overstated. For many recent graduates, student loan debt is a significant financial obstacle that impacts their ability to save for retirement or achieve other financial milestones. By offering a 401(k) matching program tied to student loan payments, employers can effectively help alleviate some of this burden while simultaneously encouraging employees to save for their future.



    This groundbreaking initiative not only demonstrates a commitment to employee well-being but also serves as a powerful recruitment and retention tool. In today's competitive job market, candidates are increasingly prioritizing employers who offer meaningful benefits that address their financial concerns. A company that supports its employees in managing their student debt is likely to stand out as an employer of choice.



    Implementing a student debt repayment assistance program can seem daunting for employers, but with the right guidance, it can be a seamless process. Franco Suarez, a seasoned Financial Advisor, specializes in helping businesses navigate the complexities of financial planning for both owners and employees. With his expertise, business owners can develop a tailored strategy to implement a student debt repayment benefit that aligns with their company's goals and values.



    By partnering with Franco Suarez, employers can unlock the full potential of the SECURE 2.0 Act and position themselves as leaders in employee financial wellness. Whether it's attracting top talent or fostering loyalty among existing staff, investing in programs that alleviate financial stressors like student debt is a win-win for employers and employees alike.



    In conclusion, the SECURE 2.0 Act offers a transformative opportunity for employers to support their employees in managing their student debt while simultaneously enhancing their retirement savings. By leveraging this legislation and partnering with experts like Franco Suarez, businesses can differentiate themselves in the competitive talent market and cultivate a workforce that is financially secure and engaged for the long term.
    Learn More
    Buy Me A Coffee

    Unleash the power of financial wellness with Health Savings Accounts! 🚀 Invest in your future, save on taxes, and conquer medical expenses like never before. 💰💪 #FinancialFreedom #TaxSavings #HSA #InvestInYourHealth

    Experience the transformative impact of the Affordable Care Act! 🌟 Unlock access to quality healthcare, protect your well-being, and embrace a future of health security for all. 💪💼 #AffordableCareAct #HealthcareForAll #WellnessRevolution #SecureFuture

    Step up your flex game, business owners! Ditch the cliché luxury car and flash your success in a whole new way—with a $2 million life insurance policy! 😎💼 Because who needs a flashy ride when you can have the ultimate status symbol: financial security!💰💥 #BossLifeInsurance #FlexYourSuccess #ForgetTheCar #FinancialSwagger

    ]]>    Tue, 12 Mar 2024 14:45:48 -0600    <![CDATA[ Hello there, Home-Based Business Owners! ]]>https://www.francosuarez.com/blogs/post/hello-there-home-based-business-ownersEmpower your home-based business with Franco Suarez!]]>

    Uncle Sam Loves YOU!





    As tax season approaches, we understand the mix of emotions it can bring, especially for small business owners like you. But fear not – your financial well-being is in good hands with Franco Suarez, your trusted financial advisor!


    We recognize that deciphering tax deductions for home-based businesses can be a bit like navigating a maze. That's precisely why we're here to lend a helping hand. Franco Suarez specializes in making the complex world of taxes simpler for entrepreneurs like yourself.


    In the world of home-based businesses, every penny saved makes a significant impact on your bottom line. That's why we've taken the initiative to craft a comprehensive list of small business tax deductions tailored specifically for home-based entrepreneurs. We want you to make the most of every opportunity to save!


    But the benefits don't stop there. Franco Suarez can guide you through various benefits and savings programs designed to not only ease your tax burden but also enhance your overall financial wellness. Just like employers providing benefits to their employees, your home-based business can reap tax savings through strategically structured programs.


    Imagine the peace of mind that comes with maximizing your savings while ensuring your family enjoys the perks of benefits tailored to your unique situation.


    Ready to embark on a journey of financial empowerment? Franco Suarez is here to help you navigate the complexities and unlock the full potential of your home-based business tax deductions.


    Let's turn this tax season into an opportunity for growth, savings, and financial success. Reach out to Franco Suarez today and make tax season a breeze for your home-based business! 💼💰✨.


     I can provide you with a general list of potential home business tax deductions, but keep in mind that tax laws can vary and change, so it's crucial to consult with a tax professional or accountant for advice tailored to your specific situation. Here are common home business tax deductions that might be applicable for the 2023 filing year:


    1. Home Office Deduction:

       - Deduct a portion of your rent or mortgage, property taxes, insurance, and utilities that are related to your home office space.


    2. Business Use of Your Car:

       - Deduct expenses related to the business use of your vehicle, such as mileage, parking fees, and tolls.


    3. Office Supplies and Equipment:

       - Deduct expenses for office supplies, furniture, and equipment directly related to your business.


    4. Business Insurance:

       - Deduct the cost of insurance specifically for your business, such as liability insurance.


    5. Internet and Phone Expenses:

       - Deduct a portion of your internet and phone bills that are used for business purposes.


    6. Professional Fees:

       - Deduct fees paid to professionals, such as accountants or consultants, for services related to your business.


    7. Marketing and Advertising Costs:

       - Deduct expenses related to marketing your business, including advertising, website maintenance, and promotional materials.


    8. Travel Expenses:

       - Deduct expenses related to business travel, including transportation, lodging, meals, and other associated costs.


    9. Education and Training:

       - Deduct the cost of education and training directly related to your business or industry.


    10. Depreciation:

        - Deduct a portion of the cost of assets used in your business, such as computers or other equipment, over time.


    11. Self-Employment Tax Deduction:

        - Deduct the employer-equivalent portion of your self-employment tax.


    12. Health Insurance Premiums:

        - If you're self-employed, you may be able to deduct the cost of health insurance premiums for yourself, your spouse, and your dependents.


    13. Retirement Contributions:

        - Deduct contributions to retirement plans, such as a Simplified Employee Pension (SEP) IRA or a Solo 401(k).


    14. Home Repairs and Maintenance:

        - Deduct expenses for repairs and maintenance of the portion of your home used for business.


    15. Utilities:

        - Deduct a portion of your utility bills, such as electricity and water, based on the percentage of your home used for business.


    Remember, it's essential to keep detailed records and receipts to support your deductions. Additionally, tax laws can change, so staying informed or consulting with a tax professional is crucial for accurate and up-to-date information.

    Disclaimer:

    Franco Suarez is not an attorney or a tax expert. While he possesses extensive experience and knowledge in the financial domain, it is important to note that the information provided by Franco Suarez is not intended to substitute professional legal or tax advice.

    Any insights, suggestions, or guidance offered by Franco Suarez are based on his personal experience and expertise within the financial sector. However, it is strongly recommended that you consult with qualified professionals, such as attorneys or tax experts, for advice tailored to your specific situation.

    Franco Suarez's expertise is aimed at providing general financial guidance and support, and he does not claim to be a substitute for the specialized knowledge and advice that legal or tax professionals can offer.



    Remember to seek professional counsel for your legal and tax-related inquiries to ensure accuracy and compliance with current regulations. Franco Suarez is here to assist and share his valuable insights, but he encourages you to make informed decisions by consulting the appropriate professionals for your specific needs.



    By engaging with Franco Suarez, you acknowledge and understand the limitations of his expertise and agree to seek independent professional advice for legal and tax matters.
    Thank you for your understanding and cooperation.
    Schedule A Free Consultation
    Buy Me A Coffee

    Solo 401K, Self-Employeed Pension

    Ready to secure your financial future? Schedule a meeting to kickstart your retirement plan today! Maximize tax savings and build a brighter tomorrow. Don't wait, act now! #RetirementPlanning #TaxSavings #FinancialSecurity 💼💰🌟

    Schedule a Free Consultation

    Your Health Savings Account

    If you are healthy and you know it count your dough!

    If you are healthy and you know it and you really want to show it count your dough!


    Your Health Savings Account can pay for your medical expenses tas free with tax exempt savings that grow tax free.

    Your Health Plan

    Boost your home business with health plans, a tax-saving powerhouse! Deduct premiums, cut taxes. #HomeBiz #TaxSavings 🏡💼💰

    Your Virtual Talent and Staff

    Elevate your business with Fiverr! 🚀 Expert help at your fingertips, and it's tax-deductible. Maximize savings, boost success. #FiverrHelp #TaxDeductible #BusinessGrowth

    ]]>    Fri, 09 Feb 2024 20:36:05 -0600    <![CDATA[Unlocking Success: Elevate Your Business with Franco Suarez's Employee Benefits Expertise]]>https://www.francosuarez.com/blogs/post/unlocking-success-elevate-your-business-with-franco-suarez-s-employee-benefits-expertiseDiscover how The Franco Suarez Agency empowers small businesses in Texas with essential employee benefits, without complications or high cost.]]>

    Boost Morale, Productivity, and Retention with the 
    ​Top 5 Desired Employee Benefits





    Running a successful business isn't just about profit margins and growth; it's also about taking care of your most valuable asset – your employees. Today's workforce values certain benefits more than ever before, and as an employer, it's crucial to understand and address these needs. Franco Suarez, a seasoned business consultant, specializes in helping business owners provide the top five most desired benefits by employees. In this blog post, we'll explore these benefits and how Franco Suarez can assist you in meeting your employees' expectations.

    1. Employer-Covered Healthcare


    According to recent surveys, 67% of employees and 68% of employers believe that employer-covered healthcare is the most important benefit. Rising healthcare costs and the importance of maintaining good health make this benefit a top priority for both parties. Franco Suarez can help business owners navigate the complex world of healthcare benefits, finding cost-effective plans that provide comprehensive coverage for employees and their families.





    2. Life Insurance

    Life insurance is another critical benefit that offers financial protection to employees and their loved ones. 45% of employees and 43% of employers consider it a top benefit. Franco Suarez can assist in selecting the right life insurance options, ensuring that your employees have peace of mind, knowing their families are protected in case of unforeseen circumstances.




    3. Pension and Retirement Plans

    Planning for the future is essential, and 34% of employees and 34% of employers agree that pension and retirement plans are vital benefits. Franco Suarez can guide you in creating retirement packages that match your employees' long-term goals, fostering loyalty and financial security.




    4. Mandatory Paid Time Off

    Employees value their personal time, and 31% of them consider mandatory paid time off a top benefit. Unfortunately, it often doesn't make it to the top five benefits among employers' priorities. Franco Suarez can help you understand the importance of work-life balance and assist in implementing paid time off policies that benefit both employees and the company's productivity.





    5. Mental Health Assistance

    Mental health is gaining recognition as a crucial aspect of employee well-being, with 33% of employers naming it a top benefit. However, only 23% of employees listed it, suggesting a potential disconnect in understanding its importance. Franco Suarez can help bridge this gap by creating comprehensive mental health programs, providing employees with the support they need to thrive both personally and professionally.




    Conclusion

    Franco Suarez is dedicated to helping business owners provide their employees with the most desired benefits. Understanding and addressing these needs not only enhances job satisfaction but also helps attract and retain top talent. By prioritizing employer-covered healthcare, life insurance, retirement plans, mandatory paid time off, and mental health assistance, you can create a workplace that values its employees' well-being. Franco Suarez's expertise in benefit planning and implementation can make a significant difference in achieving these goals, ultimately leading to a more successful and harmonious work environment.
    Make sure to book your appointment TODAY




    Book Your Free Consultation

    Disclaimer: The Franco Suarez Agency is a Texas agent serving small businesses but is not representing or represented nor sponsored by the Small Business Administration."

    ]]>    Wed, 04 Oct 2023 17:09:45 -0600    <![CDATA[The Risk of Keeping 401(k) After Retirement:]]>https://www.francosuarez.com/blogs/post/the-risk-of-keeping-y401-k-after-retirementour"Discover the potential risks of post-retirement 401(k) retention and essential insights for informed decisions." (Characters: 86)]]>

    What You Need to Know


    As retirement approaches, many individuals face a crucial decision regarding their 401(k) plans. While these accounts are designed to help people save for retirement, there are risks associated with keeping a 401(k) after retirement that warrant careful consideration. In this post, we'll explore these risks and offer guidance on how to manage them.


    1. Market Volatility: One of the primary risks of keeping a 401(k) after retirement is exposure to market volatility. Your 401(k) investments may still be subject to market fluctuations, which can affect the value of your account. If a market downturn occurs shortly after retirement, it can significantly impact your retirement income.


    Mitigation: Consider diversifying your investments, shifting toward more conservative options, or exploring products like annuities that provide a guaranteed income stream, helping shield you from market volatility.


    2. Required Minimum Distributions (RMDs): After reaching the age of 72 (or 70½ for those born before July 1, 1949), the IRS mandates that you begin taking annual withdrawals from your 401(k). These Required Minimum Distributions (RMDs) can impact your tax liability and potentially deplete your retirement savings faster than anticipated.


    Mitigation: Plan for RMDs by working with a financial advisor to determine the most tax-efficient strategy. Consider using RMDs for living expenses or reinvesting them in a taxable account.


    3. Limited Investment Options: 401(k) plans often provide a limited selection of investment options compared to other retirement accounts. This can restrict your ability to adjust your investments according to your post-retirement financial goals.


    Mitigation: Explore rolling over your 401(k) into an Individual Retirement Account (IRA) to gain access to a broader range of investment choices and greater control over your portfolio.


    4. Maintenance Fees: Many 401(k) plans charge administrative fees, which can eat into your retirement savings over time. These fees may continue even after retirement.


    Mitigation: Evaluate the fees associated with your 401(k) and consider rolling it into an IRA with lower fee options if it makes financial sense.


    5. Inheritance Planning: If you wish to pass on your retirement savings to heirs, a 401(k) might not be the most efficient vehicle. Beneficiaries may face taxes and restrictions on inherited 401(k) funds.


    Mitigation: Discuss your inheritance goals with an estate planning attorney and explore options such as converting your 401(k) into a Roth IRA, which has more favorable inheritance rules.

    In conclusion, while keeping a 401(k) after retirement can offer certain advantages, it's crucial to be aware of the associated risks. Careful planning, diversification, and a clear understanding of your financial goals are essential in managing these risks effectively. Consulting with a qualified financial advisor or retirement planner can help you make informed decisions and ensure a secure and comfortable retirement. Remember that financial decisions in retirement should align with your unique circumstances and aspirations.

    Are You Retirement Ready?
    ]]>    Mon, 25 Sep 2023 17:08:35 -0600    <![CDATA[A solo 401(k) plan]]>https://www.francosuarez.com/blogs/post/a-solo-401-k-planA solo 401(k) is an individual 401(k) designed for a business  owner with no employees .   In fact, IRS rules say you can’t contribute to a solo ]]>

    Quick facts and who qualifies for a solo 401(k)

    A solo 401(k) is an individual 401(k) designed for a business 

    owner with no employees. 


    In fact, IRS rules say you can’t contribute to a solo 401(k) if you have full-time employees, though you can use the plan to cover both you and your spouse.


    The perks of self-employment are plenty, but there’s at least one significant drawback: the lack of an employer-sponsored retirement plan like a 401(k). Enter the solo 401(k), or what the IRS calls a one-participant 401(k). Designed for self-employed workers, a solo 401(k) mimics many of the features of an employer-sponsored plan, without the drag of working for the man.

    Solo 401(k) contribution limits

    The total solo 401(k) contribution limit is up to $61,000 in 2022 and $66,000 in 2023. There is a catch-up contribution of an extra $6,500 for those 50 or older in 2022 and $7,500 in 2023.

    To understand solo 401(k) contribution rules, you want to think of yourself as two people: an employer (of yourself) and an employee (yes, also of yourself). Within that overall $61,000 contribution limit in 2022 and $66,000 in 2023, your contributions are subject to additional limits in each role:

    • As the employee, you can contribute up to $20,500 in 2022, $22,500 in 2023, or 100% of compensation, whichever is less. Those 50 or older get to contribute an additional $6,500 here in 2022 and $7,500 in 2023.

    • As the employer, you can make an additional profit-sharing contribution of up to 25% of your compensation or net self-employment income, which is your net profit less half your self-employment tax and the plan contributions you made for yourself. The limit on compensation that can be used to factor your contribution is $305,000 in 2022 and $330,000 in 2023

    Keep in mind that if you’re side-gigging, employee 401(k) limits apply by person, rather than by plan. That means if you’re also participating in a 401(k) at your day job, the limit applies to contributions across all plans, not each individual plan.

    Is Solo 401(k) tax deductible? Solo 401(k) tax advantages

    The nice thing about a solo 401(k) is you get to pick your tax advantage: You can opt for the traditional 401(k), under which contributions reduce your income in the year they are made. In that case, distributions in retirement will be taxed as ordinary income. The alternative is the Roth solo 401(k), which offers no initial tax break but allows you to take distributions in retirement tax-free.

    In general, a Roth is a better option if you expect your income to be higher in retirement. If you think your income will go down in retirement, opt for the tax break today with a traditional 401(k).

    Because of these tax perks, the IRS has pretty strict rules about when you can tap the money you put into either type of account: With few exceptions, you’ll pay taxes and penalties on any distributions before age 59 ½.


    Covering your spouse under your solo 401(k)

    The IRS allows one exception to the no-employees rule on the solo 401(k): your spouse, if he or she earns income from your business.

    That could effectively double the amount you can contribute as a family, depending on your income. Your spouse would make elective deferrals as your employee, up to the $19,500 employee contribution limit (plus the 50-and-older catch-up provision, if applicable). As the employer, you can then make the plan’s profit-sharing contribution for your spouse, of up to 25% of compensation.






    Get Started Now
    ]]>    Fri, 16 Dec 2022 06:34:40 -0600