I recently became self-employed at the start of this year, operating as a Single Member LLC (SMLLC) with an estimated first-year income of around $65K. My business accounts are set up using the Profit First method, and I take owner draws twice a month.
I have a couple of 401(k)s from previous employers, totaling about $45K, which are in “set it and forget it” target date retirement accounts. My plan is to leave them as they are and let them grow.
However, I want to continue contributing to my retirement. I haven’t done much research, and to be honest, retirement planning and investing feel overwhelming. I believe I need to open a separate investment account for pre-tax contributions, right? I understand there are annual contribution limits depending on the type of account I choose.
Given that it’s my first year in business and my income is still a bit uncertain, should I invest a small percentage each month, or would it be better to make a lump sum contribution at the end of the year to maximize my retirement savings?
I appreciate any advice or insights you can offer. Thank you in advance.