{"id":1789,"date":"2026-05-06T06:42:55","date_gmt":"2026-05-06T06:42:55","guid":{"rendered":"https:\/\/gw.adampg777.com\/?p=1789"},"modified":"2026-05-06T06:42:55","modified_gmt":"2026-05-06T06:42:55","slug":"wells-fargo-aarp-flag-major-concerns-on-401ks-iras","status":"publish","type":"post","link":"https:\/\/gw.adampg777.com\/?p=1789","title":{"rendered":"Wells Fargo, AARP flag major concerns on 401(k)s, IRAs"},"content":{"rendered":"
<\/p>\n
In my years of experience reporting on personal finance matters, I’ve found a common trait American workers share.<\/p>\n
Whether they are working for an employer or are self-employed, people saving for retirement are concerned about finding the right financial tools \u2014 and using them effectively.<\/p>\n
Financial services company Wells Fargo and AARP, the nonprofit organization that advocates for older Americans, offer important facts to consider as self-employed Americans contribute to one-participant 401(k) plans and Individual Retirement Accounts (IRAs) for their post-career lives.<\/p>\n
“As a small business owner employing only owners and spouses, you may be able to contribute more with a 401(k) than with other retirement plans,” wrote Wells Fargo.<\/p>\n
“An Individual 401(k) may work well if you have income of less than $200,000 and want to maximize your retirement savings,” the company added. “With an Individual 401(k) you have the flexibility to change how much your business contributes from year to year.”<\/p>\n
Wells Fargo also addresses IRAs for people running businesses.<\/p>\n
A Simplified Employee Pension (SEP) IRA is a retirement arrangement that allows small business owners to make tax?deductible contributions through a straightforward plan to establish and administer. <\/p>\n
When a business has employees, the employer may also be required to contribute to their accounts under the plan.<\/p>\n
“A Simplified Employee Pension (SEP) plan may work well if you want a low-cost, easy-to-maintain retirement plan for you and your employees,” Wells Fargo wrote. <\/p>\n
“Both SEP IRA and Traditional IRA contributions can be made to the same account, and you have the flexibility to change how much your business contributes from year to year.”<\/p>\n
AARP stresses solo 401(k) concerns<\/h2>\n
A solo 401(k) plan functions much like a standard 401(k), but it is designed for a business with a single participant, with the option to include a spouse who earns income from that business, according to AARP.<\/p>\n
Under this arrangement, the business owner may contribute in two capacities: as the employee and as the employer. For 2026, the contribution limit is $24,500 for those under age 50. <\/p>\n
More on personal finance:<\/strong><\/p>\n
\n
Zillow forecasts big mortgage change for U.S. housing market<\/strong><\/li>\n
AARP sounds alarm on major Social Security problem<\/strong><\/li>\n
Dave Ramsey bluntly warns Americans on 401(k)s<\/strong><\/li>\n<\/ul>\n
Individuals ages 50 to 59 or 64 and older may contribute $32,500 through the combination of the standard limit and the $8,000 catch?up allowance. Workers ages 60 to 63 fall under a separate SECURE 2.0 Act of 2022 catch?up tier that permits $35,750 in employee contributions for 2026.<\/p>\n
“SECURE 2.0 gives sole proprietors more flexibility in starting and contributing to a solo 401(k),” wrote AARP. “Previously that had to be done by the end of a tax year for the contribution to be deductible for that tax year. Now, you have until the tax-filing deadline in April of the following year.”<\/p>\n
“If you hire staff for your business, you will no longer qualify for the solo 401(k),” AARP emphasized.<\/p>\n
Employer contributions may also be added, generally up to 25 percent of net self?employment earnings, but total combined contributions for 2026 cannot exceed $72,000 (plus the applicable catch-up amount).<\/p>\n
Contributions may be made on a pretax or Roth basis, though catch-up contributions for high earners must be Roth.<\/p>\n\n
Wells Fargo, AARP explain 401(k) plan and IRA options for small business owners.<\/p>\n
Shutterstock<\/p>\n<\/figcaption><\/figure>\n
Wells Fargo tackles Traditional IRAs, Roth IRAs<\/h2>\n
Traditional and Roth IRAs represent the two primary forms of individual retirement accounts, each offering its own set of characteristics. When evaluating which type is more suitable, a central consideration is the timing of the income taxes that will apply to the savings, Wells Fargo explains.<\/p>\n
Traditional IRAs<\/h3>\n
\n
Traditional IRAs<\/strong> provide the opportunity for investment gains to compound without current taxation.<\/li>\n
Taxes on those earnings are not owed until the funds are withdrawn from the account.<\/li>\n
Depending on income level, contributions to a Traditional IRA may qualify for a tax deduction.<\/li>\n
Postponing taxes can support a larger long?term accumulation of assets.<\/li>\n
Traditional IRA contributions have no upper age limit as long as the individual \u2014 or a spouse in a joint return \u2014 has earned income. \n(Source: Wells Fargo)\n<\/li>\n<\/ul>\n
Roth IRAs<\/h3>\n
\n
Roth IRAs<\/strong> allow investment growth to accumulate without future taxation.<\/li>\n
Earnings can be withdrawn tax?free once the account has been open for more than five years and the individual is at least age 59-and-a-half, or if the distribution meets criteria such as disability, the first?time homebuyer exception, or payment to beneficiaries after death.<\/li>\n
Because Roth IRA contributions are made with after?tax dollars, no deduction is available at any income level.<\/li>\n
Contributions may be made at any age provided the individual \u2014 or a spouse on a joint return \u2014 has earned income and falls within the applicable MAGI limits. \n(Source: Wells Fargo)\n<\/li>\n<\/ul>\n
Related: Dave Ramsey, AARP raise red flags on 401(k)s, IRAs<\/strong><\/p>\n
In my years of experience reporting on personal finance matters, I’ve found a common trait American workers share. Whether they are working for an employer or are self-employed, people saving… <\/p>\n","protected":false},"author":1,"featured_media":1790,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[1265,1262,345,521,2812,1266,900,520],"class_list":["post-1789","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-401ks","tag-aarp","tag-concerns","tag-fargo","tag-flag","tag-iras","tag-major","tag-wells"],"_links":{"self":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1789","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1789"}],"version-history":[{"count":0,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/posts\/1789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=\/wp\/v2\/media\/1790"}],"wp:attachment":[{"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1789"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gw.adampg777.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
![](\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAyOTM5NTc4\/photo-2939578.jpg?io=1&profile=rss\")