How to Get the Most Out of Your Solo 401(k)

Helpful advice for salaried CRNAs who also earn independent-income

As a CRNA, your high-demand job gives you the ability to generate multiple revenue streams. Nurse anesthetists can have the security and stability working as a salaried employee, while also reaping the benefits of contract work to augment their baseline income.

While this is a great way to increase income, any salaried CRNA with a high-earning Locum Tenens opportunity needs to understand the tax implications of this income model, so they can create a strategy to maximize the benefits of their extra work.

Using an Independent 401(k) plan is an excellent method to help you save and protect your assets. It’s a great tactic to help ensure that you keep more of what you’ve earned.

Let’s look at how an Independent 401(k) plan works:
Nancy is a CRNA who is making 160K annually at her hospital job. She uses half of her vacation time to work as a contractor at a smaller hospital in a nearby town. Her contract work pays an extra 45K annually.

Nancy (age 50) defers $15,000 each year in the hospital 401(k), and the hospital makes an additional matching contribution to her plan for her. Nancy’s contracting business adopts an Independent 401(k) Plan, allowing her to make an additional qualified plan post-tax contribution, which can be placed into a ROTH account within the Solo 401(k), and then rolled out into an individual ROTH IRA.

Compensation$160,000$45,000 (Net)
# of employees5001 (Nancy, CRNA)
Salary deferrals$15,000$0
Employer match$6,400$0
Employee after-tax$0$45,000 (ROTH)
Total$21,400$ 45,000

Normally, CRNAs are phased out of making a ROTH contribution due to their income levels.
However, with this strategy Nancy can roll-out her after-tax contribution to her Roth IRA so she can better protect her retirement assets.

To find out how this strategy could work for you, consult a certified financial advisor. Together you will create a plan to maximize your savings and protect your assets.

Book a consultation today.

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