[Kimberly]

I’m planning for retirement and looking into a Solo 401(k), but I’m a bit confused about how the taxes work when I retire.

Is the money in a Solo 401(k) taxed before or after you start withdrawing it during retirement?

I understand that with traditional 401(k)s, the contributions are made pre-tax, and you pay taxes when you take the money out.

However, I’ve heard there are options like Roth Solo 401(k)s where contributions are made after-tax, and withdrawals are tax-free in retirement.

Could someone clarify how this works for Solo 401(k)s?

Are the withdrawals generally taxed, or is it based on the type of account I choose? Thanks in advance!

[Justin]

You don’t pay tax on the money you invest now when you invest it. When you retire and take the money out, you pay tax on the money and growth

[Ran]

It depends if it’s Roth(Post-Tax) or Traditional(Pre-Tax). If your Solo 401K is a Roth, you have already paid taxes and your money and it’s gains grow tax free.

If you put the money in a Traditional Solo 401K(pre-tax), you will be taxed when you withdraw that money when you retire.

[Matt]

I believe Schwab offers a Roth version. I don’t think Fidelity does and I’m sure that Vanguard doesn’t.

[Khang]

Before. By the time you retire, it will be tax at bracket higher than now .

[Author]

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