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Travel Agents Can Save For Retirement

Some people become Travel agents in retirement and some people are travel agents saving for retirment. If you are a full time or part time travel agent you may be wondering what you can do to plan for your future. The good news is that you have some amazing options and some of them are better that an employer sponsered plan!

My wife started a Travel Agency in 2020 during the COVID-19 Pandemic. And while it didn’t seem like a great time to start a business, she made it work. We had set ouselves up financially so she could slowly transition from teaching to being a full time travel agent. Over the years she slowly and steadily built a business doing something she loves and is passionate about. However, giving up that teacher pension, 403b and 457 retirement plans was a little scary. We were not sure on how we were going to make sure we could efficiently save a little money each year toward retirement.

Now, although my wife is passionate about travel, she doesn’t get much enjoyment out of managing the financial side of the business. Good news, I do! We have a lofty goal of early retirement and one of the things we wanted to figure out early on was how we can continue to save for retirement while she is operating her own business.

When you work for an employer you typically have some type of 401k or other retirement program you can put money into. Human resources gives you some paperwork, you check a few boxes and boom......out of your paycheck those retirement contributions come. However, when you are an independent travel agent, you are on your own. You are both the employer and the employee. Being your own boss is great until it isn't! And while that can seem rather scary, it actually opens up some amazing opportuntities. There are multiple ways to save for retirement and we are only going to touch on a few. This is by no means the only way to do it but it is what we have chosen to do and is working out great.

One Participant 401k

The One Participant 401k (sometimes called Solo 401k, i401k, Solo-k etc) is a traditional or roth 401(k) plan covering a business owner with no employees, or that person and his or her spouse. This typically covers the majority of independent travel agents because even if you have a sub agent, it very likely they are classified as an independent contractor and not an employee. These plans have the same rules and requirements as any other 401(k) plan.

So how does it work. Essentially, you contribute to the plan pre-tax (traditional) or post tax (roth) during the year nearly identical to what you would do if you worked for an employer. You simplly transfer money from your bank acount into the plan throughout the year. The tax savings (for traditional) are seen at the end of the year with the contributions lowering your adjusted gross income. Individuals can contribute up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit ($22,500 in 2023). These contributions need to be made by the end of the calendar year. There are many places you can open a Solo 401k. We chose to use Vanguard as most of our other investments are with them and they are owned by the investors (you).

In addition to the contributions outlined above, you can also contribute as an employer up to 20% of your net income. This is a great way to contribute a little more to retirement that you would not normally be allowed to do. Although the account needs to be established prior to year end, the contributions can be made all the way up until your tax filing deadline. Good thing your boss (you) is so gernerous!

Interested in learning more? Check out the Vanguard Individual 401(k).

Roth IRA

A Roth IRA is also another retirement tool that may be available to you. Contributions to your Roth IRA are made after tax. This can be done in addition to the solo 401k or in lieu of. This won’t save you on taxes now, but when the money is withdrawn in retirement you won’t pay taxes on the money you contributed or the growth! You are able to contribute $6,500 in 2023. To contribute to a Roth IRA, single tax filers must have a modified adjusted gross income (MAGI) of less than $144,000 in 2022 or less than $153,000 in 2023. If married and filing jointly, your joint MAGI must be under $214,000 in 2022 or $228,000 in 2023. We opened our Roth IRA with Vanguard as well. Another great benefit of a Roth IRA is that you can withdraw the contributions tax and penalty free at anytime. Although its isnt recomended and this should be looked at as a retirement account, it is always nice to know you have the option should you get in a pinch.

There are other options as well including a Tradition IRA, SEP IRA, or a Brokerage Account depending on your income and business structure. However, this is what we have chosen to do based on my wife’s current income and business structure.

Author – Andy Roed

I am a tax professional and financial coach focusing primarily on helping travel agents. I am someone who is married to a travel agent, loves to travel and loves everything finance. The intersection of these passions has led me to a career that I am truly passionate about. My goal is to help travel agent get control of both their business and personal finances as well as helping to aliviate the stress with tax time.

If you found this article interesting and are interested in more like it or are looking for someone to help you with all things taxes and finance please visit me at or join our Facebook Community.

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