+115 votes
Can self-employed individuals open and contribute to a Roth 401(k) retirement account?
by (420 points)

1 Answer

+77 votes
Best answer
Yes, self-employed individuals can have a Roth 401(k) retirement account. A Roth 401(k) is a retirement savings account that combines features of a traditional 401(k) with those of a Roth IRA. It allows for after-tax contributions and tax-free withdrawals in retirement. Self-employed individuals can establish and contribute to a Roth 401(k) as long as they meet the eligibility requirements. The contribution limits for a Roth 401(k) for self-employed individuals are the same as for employees in traditional workplaces. For 2024, the contribution limit is $19,500, with an additional catch-up contribution of $6,500 for individuals aged 50 or older. Self-employed individuals can also make employer contributions to their own Roth 401(k), which can further enhance their retirement savings. It's important for self-employed individuals to consult with a financial advisor or tax professional to understand the specific rules and regulations regarding Roth 401(k) contributions for self-employment income. Additionally, they should consider their overall financial situation and retirement goals when deciding on the most suitable retirement savings options.
by (460 points)
selected by