March 28, 2024

DoubleUp

How Some Traders Double-Up On Retirement Plan Contributions

Profitable traders are keen on maximizing retirement plan contributions in trading activities and also in their full-time jobs. Traders are pros at investing, and they understand the power of tax-free compounding while saving for retirement. However, wages are required to make contributions to a retirement plan. Active traders eligible for trader tax status (TTS) can use an S-Corp structure to pay themselves the necessary wages.

Those who have a job in addition to trading can double their retirement savings by maximizing their employer 401(k) and contributing another $58,000 to an unaffiliated TTS S-Corp Solo 401(k) or profit-sharing