Investment Options for PhD Candidates Without 401(k)

### Investing Strategies for Young Professionals: Maximizing Opportunities Beyond Traditional Accounts
* 💼 As a 27-year-old PhD candidate earning $40,000 to $50,000 from side hustles, you're already making a strong financial move by **maxing out your Roth IRA**.
* 💰 If your side hustles provide W-2 income, your investment options may be limited, but if you're self-employed and receive **1099 payments**, you have **exciting financial planning opportunities** available.
* 📈 Consider a SEP IRA, which allows you to contribute **20-25% of your income**, but also explore the benefits of a solo 401(k) that offers **higher contribution limits up to $23,000** plus a **profit-sharing component**.
* 📝 It's essential to ensure your self-employment income is subject to **self-employment taxes** to qualify for these retirement plans.
* 🔍 If your part-time work is W-2 based, and you're left with a brokerage account as your primary investment option, that's still a **valid choice at this stage**.
* 🌟 Remember, as a future professional, you will likely gain access to retirement plans such as **401(k)s, 403(b)s, or 457(b)s**, allowing you to **enhance your savings strategy** later on.
* 📊 Focus on cultivating good savings habits now by aiming to **save 25% of your gross income**, as this discipline will serve you well when your income increases in the future.
* 💡 Utilize resources like the **wealth multiplier tool** at moneyguy.com/resources to visualize how your current savings can grow, even if they are currently in a **brokerage account**.

Self-employed individuals can utilize solo 401(k)s to maximize retirement savings.

I'm a 27-year-old PhD candidate.  I'm maxing out my Roth IRA, but have no 401(k) or HSA options. Obviously, those are a big part of a step in the financial order of operations. Do I have any other options for investing other

than a brokerage account? I make about $40,000 to $50,000 in side hustles right now. What would you say to Liam? Oh, Liam, I have a question: when you do those side hustles, how are you getting paid? Like, side hustles meaning like I'm working part-time,

getting W-2 income, because then there's not a whole lot you can do. But if your side hustles are paying you as an independent contractor, well now we have a lot of really fun planning opportunities because when you are self-employed, it opens all

kinds of wonderful world of finance choices. Yeah, I mean, the old-school answer used to be just go look at a SEP IRA and fund that to 20-25% of your income, um, funded basically by the employer. But then along comes solo 401(k)s,

which now allow you to, since you said you don't have a 401(k) at your work, that means you have your full wide open on 415 funding limits, meaning you can do your deferrals up to the $23,000, and then you could do a profit

sharing portion on top of the $23,000, probably 20-25% of the profit of the side gig that you've got going on. And um, it's an incredible saving opportunity, so you don't have to, especially if you

Have side income coming in. If you don't have a 401(k) with your employer, go create your own opportunity. If you have self-employment income, you have to make sure that this is money that's going to be subject to self-employment taxes, or um...

payroll taxes, um, for it to be eligible for these retirement plans. But let's say that, for some reason, maybe you're doing part-time work and it is a W-2 and you're not getting a 1099, and all you can do is a brokerage account; that's okay.

You're a PhD candidate, which means likely when you finish your education you're going to move into a vocation where you're probably going to have access to things like a 401(k), a 403(b), or maybe even a 457(b), where you can double

dip. So just because you're not able to build those accounts right now in your financial journey does not mean that you won't be able to build them at some point in the future. What you really want to master right now is the behavior: If I'm making $40,000 or $50,000 a year, am I

still going to make sure that I'm saving 25% of my gross income for the future? Because if I can do that when I'm making $40,000 to $50,000 a year, then I'm likely going to be able to carry that same behavior forward when I'm making $140,000 to

$150,000 a year and I do have access to all these wonderful retirement plans. So the fact that you're saving at 27... If you haven't done the wealth multiplier, go to moneyguy.com/resources, play with our tool out there; it'll blow your mind what

Every one of those dollars can turn into even more, if it's just falling into a brokerage account, which is totally okay at this stage of your financial journey.

"I Have a Doctorate with No Investing Options!"

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Investment Options for a PhD Candidate with Side Hustles

A 27-year-old PhD candidate maxing out their Roth IRA seeks additional investment options due to lack of 401(k) or HSA access.

The candidate earns $40,000-$50,000 from side hustles, and the method of payment (W-2 vs. independent contractor) impacts investment choices.

Self-employment income opens up more investment opportunities compared to W-2 income.

Solo 401(k) and SEP IRA as Investment Vehicles

SEP IRAs and solo 401(k)s are presented as options, with the solo 401(k) allowing higher contribution limits.

Solo 401(k)s allow deferrals up to $23,000 plus profit sharing, potentially 20-25% of side hustle profits.

The importance of self-employment taxes for eligibility in these retirement plans is highlighted.

If only W-2 income exists, a brokerage account is suggested as an alternative.

Future Investment Opportunities and Behavioral Consistency

The candidate's future career likely offers access to 401(k), 403(b), or 457(b) plans.

The focus shifts to consistent saving behavior, emphasizing the importance of saving a percentage of income regardless of income level.

Maintaining a 25% savings rate, even with lower current income, is encouraged for future financial success.

A wealth multiplier tool is recommended to visualize the long-term impact of savings.

Using a brokerage account is deemed acceptable at the current stage of the financial journey.