Roth IRA

[wwillson]

You do realize that Berkshire Hathaway is sitting on top of 149 billion in cash right? And instead of reinvesting the money, lots of company just buy back their stock with profits to boost up the price instead of investing it.

https://www.business-standard.com/a...ith-149-2-billion-on-hand-121110700092_1.html

Yes, as is Apple and many other companies, but I would bet that it isn't sitting rotting away as cash. In 2021 alone, Apple purchased about $110 billion in marketable securities, this is public knowledge. Hence, the vast majority of Apple's cash and many other companies with lots of cash does get invested.

 

[PWMDMD]

If he is self employed, he can just open up a SEP-IRA. I believe you can also convert it to a Roth at some point but not sure if that's going away. You can contribute up to 25% of income to a SEP-IRA and I think the max for 2021 is 57k. It's pretty simple and straightforward to do. I did mine at Fidelity, they can walk you through it, but you just have to read the directions and send in the money.

I need to look into SEP-IRAs. I have a single-member LLC that is a member of the larger business I own. The larger LLC business has 26 employees and offers a 401K. I contribute to the 401k and do a backdoor Roth IRA for myself and one for my wife. I'd still like to contribute more some years and while I think I'd qualify, I don't want to offer it to all 26 employees and it would be awesome if I could do it under my single-member LLC but I often get bitten by the fact my single-member LLC is considered part of a controlled group.

 

[JeffKeryk]

Yes, as is Apple and many other companies, but I would bet that it isn't sitting rotting away as cash. In 2021 alone, Apple purchased about $110 billion in marketable securities, this is public knowledge. Hence, the vast majority of Apple's cash and many other companies with lots of cash does get invested.

Absolutely. Any good size company will have, as part of Treasury, a set of investments and someone who manages them.
Regardless of the state of the business, always make your money work for you.
This was made even more true with the advent of deferred revenue cash, which is a liability on the balance sheet.