I recently started a new job and enrolled in their retirement savings plan, which is a Roth 401k. I currently am set to contribute a little over $12,000 to it personally per year. The company's 401k match is discretionary at the year's end, but I've been told it averages ~2-3% (for me, approx $1625 based on 2.5%).
I've also recently acquired a freelance client and will be collecting money from them as an independent LLC. With that additional income, I'd like to max out my 401k, but am unsure of the best method for doing so.
Should I max my contributions through my full-time employer and deal with the income from my freelance client just as additional money to my bank account/pay taxes on it? Or will I retain more money/pay less in taxes by contributing money from my freelance client to my 401k? Is that possible to do, and is the differentiation arbitrary? To make things slightly more complicated -- I used to be a full-time freelancer and have a separate Roth IRA available to me with modest holdings. Should I transfer out from that account and consolidate or use that for my freelance retirement savings?
Any insight appreciated. Thank you!
Submitted November 05, 2021 at 11:07AM by kinkyhoe69 https://ift.tt/3mJ6Qvn
