Structuring your business as an S corporation becomes tax-advantageous once income surpasses $100-150k. This allows you to pay yourself a "reasonable salary" subject to payroll taxes, while the remaining profit can be taken as a distribution, which is not subject to Social Security taxes.

The conventional wisdom to always max out a 401(k) is questionable. After fees, the net benefit over a taxable brokerage account can be as low as 40 basis points per year. For high earners or those aiming for early retirement, this small advantage may not justify locking up capital until age 59.5, sacrificing valuable liquidity and flexibility.

The primary decision-makers for mass-market 401(k) plans are often HR or finance teams, not investors. To shield their companies from employee lawsuits, they have historically prioritized funds with the lowest fees, creating a massive structural barrier for higher-fee alternative investments to gain traction.

The term "Solo 401(k)" is a misnomer; it can be used by any business with no non-owner employees. This means a partnership with several partners, and even their spouses, can all participate in the same plan. Each individual becomes eligible for their own contribution limit, assuming company income is sufficient.

For business owners with high income and few or no employees, a defined benefit pension plan can offer significantly larger tax deductions than standard retirement plans like a 401(k), potentially allowing for write-offs exceeding half a million dollars.

It's a common misconception that Solo 401(k)s offer the same robust ERISA creditor protection as corporate 401(k)s. Because they don't cover non-owner employees, they lack this enhanced protection, leaving assets with the same vulnerability as a standard IRA—a critical distinction for professionals in litigious fields.

The Mega Backdoor Roth strategy works perfectly for solo practitioners and owner-only businesses. A solo 401k plan is exempt from the complex compliance testing and administrative burdens that often prevent larger companies from offering the feature, making it an especially powerful and streamlined tool for the self-employed.

Many don't realize the $72,000 annual retirement contribution limit applies per plan, not per person. A solo practitioner with a side business can max out their primary employer's 401(k) and still contribute up to another $72,000 to a separate Solo 401(k) or SEP IRA, provided their side income is sufficient.

Many employees are unaware their 401(k) plan may offer a "Mega Backdoor Roth" option. This allows for substantial after-tax contributions to a 401(k), which can then be converted to a Roth account, creating a large, tax-free bucket for retirement growth beyond standard contribution limits.