1 week ago
9
David Beren
Mon, April 13, 2026 astatine 9:05 AM CDT 6 min read
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A self-employed ophthalmologist earning $500,000 annually tin structure implicit $150,000 successful national taxes by stacking a Solo 401(k) with a defined payment pension plan, with publication limits reaching $262,000 for the DB constituent unsocial astatine property 55.
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The strategy works champion for professionals successful their precocious 50s due to the fact that actuarial mathematics requires larger yearly contributions erstwhile less years stay until retirement, and the mandatory yearly DB backing request demands stable, predictable concern income to debar forced contributions during gross downturns.
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A self-employed ophthalmologist successful her precocious 50s earning $500,000 a twelvemonth from her backstage signifier tin legally structure much than $150,000 of that income from national taxes successful a azygous year. The conveyance is simply a operation astir precocious earners person ne'er heard of: a Solo 401(k) stacked connected apical of a defined payment pension plan. Together, they relation arsenic a publication motor that nary W-2 worker tin replicate.
A Solo 401(k) allows a self‑employed idiosyncratic to lend successful 2 roles simultaneously: arsenic an worker and arsenic the employer. In 2026, the worker deferral bounds is $23,500, with an further $7,500 catch‑up for those 50 and older. The leader profit‑sharing publication tin scope up to 20% of nett self‑employment income, bringing the full combined bounds to $69,000 for those nether 50 and $76,500 for those 50 and older. SECURE 2.0’s enhanced “super catch‑up” for ages 60 to 63 is scheduled to statesman successful 2026, but last dollar amounts person not yet been published.
A defined payment (DB) pension program is actuarially funded, meaning the yearly publication is calculated to present a circumstantial status payment by a people age. A solo practitioner successful their mid‑50s earning $500,000 annually tin simultaneously money a DB program based connected actuarial calculations targeting a circumstantial yearly benefit, often allowing an further $80,000 to $175,000 successful pre‑tax contributions per year, depending connected property and income. At property 55, the currency equilibrium publication bounds successful a combined operation tin scope $262,000 for the DB constituent alone, with a combined program full approaching $342,000 erstwhile stacked with a 401(k).
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