I'm self employed. Currently planning to fund a SEP for 2010. At what threshold do I need to switch to a Solo401k?
(I'm in the SEP because (a) it's easy and (b) it's cheap -- no fees. Solo401k looked like an expensive hassle last year.)
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I think this article explains it pretty well:
Contributions to a SEP are limited to 20% of your business income (which is business income minus half of your self-employment tax), up to a maximum of $45,000. With a solo 401(k), on the other hand, you can contribute up to $15,500 plus 20% of your business income (defined the same way as above), with a maximum contribution of $45,000 in 2007. You can make an extra $5,000 catch-up contribution if you're 50 or older