Retired at 65 and Consulting for $30K a Year You Don’t Need? A Solo 401(k) Shelters Nearly All of It. These 3 ETFs Turn It Into a Second Nest Egg

You retired at 65 with the mortgage paid, the pension set, and Social Security running on schedule. Then a former colleague asked you to consult a few days a month, and now roughly $30,000 a year is landing in your checking account that you do not actually need. A Solo 401(k) is the cleanest way to keep the IRS from taking a slice of it, and three ETFs — the Vanguard Mega Cap Growth ETF (NYSEARCA:MGK), the Avantis U.S. Small Cap Value ETF (NYSEARCA:AVUV), and the iShares Core MSCI Emerging Markets ETF (NYSEARCA:IEMG) — can turn that sheltered cash into a second nest egg over the next 20 years.

Why $30K of Consulting Income Can Vanish Into a Solo 401(k)

Here is the math that makes this work. In 2026, the employee deferral limit for a Solo 401(k) is $24,500, and if you are 60 to 63, you can add an $11,250 super catch-up on top. At 65, you drop back to the standard $8,000 catch-up, which still puts your deferral cap above your entire $30,000 of net self-employment income. Add the employer profit-sharing piece (roughly 20% of net SE income) and nearly every dollar of that consulting check can go in pretax.

One caveat worth flagging: If you are collecting Social Security before your full retirement age, earned income can trigger the earnings test. At 65, most retirees are already past FRA, but confirm your birth year before assuming you are clear. The sheltering strategy also assumes you have a 20-year horizon for this money. If the plan is to spend it in five, skip growth ETFs entirely.

MGK: Mega-Cap Growth Doing the Heavy Lifting

MGK is Vanguard’s slice of the biggest, fastest-growing U.S. companies. It tracks the Morningstar Mega Cap Growth Index and holds just 56 stocks, so you are getting concentrated exposure to the mega-cap names driving the S&P 500. The expense ratio is 0.05%, which makes costs almost negligible. Fund assets sit around $33.69 billion, and the 30-day SEC yield is a slim 0.29% because these companies reinvest rather than pay you.

The performance speaks for itself. MGK is up 13.5% year-to-date, 16.63% over the past year, and 96.93% over five years. Inside a Solo 401(k), zero of those gains create a 1099 to deal with.

AVUV: Small-Cap Value as Your Diversifier

AVUV is the counterweight. It is actively managed by Avantis and tilts toward smaller U.S. companies trading at cheaper valuations with real profitability, which historically delivers returns that compound differently from mega-cap growth. The expense ratio is 0.25%, which is high for an index fund but reasonable for a factor-tilted active strategy. Fund assets are roughly $30.93 billion, and the fund launched on September 24, 2019.

Holdings are genuinely diversified across financials, industrials, energy, and consumer names such as Bank OZK, Alaska Air Group, Brunswick, CarMax, Crocs, and Academy Sports & Outdoors. The returns explain why you want this alongside MGK. AVUV is up 20.9% year-to-date and 23.43% over one year, outpacing the mega-cap sleeve when the market rotates.

IEMG: Buying the Rest of the World Cheap

IEMG rounds out the trio with roughly 2,827 stocks across China, India, Taiwan, Saudi Arabia, Brazil, and dozens of smaller markets. The expense ratio is 0.09%, fund assets are around $162 billion, and the 12-month trailing yield is 2.19%, which is meaningfully higher than either U.S. sleeve. Top exposures include Alibaba, PDD Holdings, Saudi Aramco, NetEase, and Nu Holdings.

Emerging markets spent most of the last decade being written off. That is finally reversing. IEMG is up 25.46% year-to-date and 30.64% over the past year. A 20-year horizon lets you sit through the political and currency noise.

Trade-Offs You Need to Accept

This is a growth-tilted portfolio. MGK carries mega-cap concentration risk, AVUV has swung down 3.11% in the past month alone, and IEMG’s five-year return of 54.84% trails MGK’s by a wide margin. Expect at least one calendar year where the whole basket drops 20% or more. If that would rattle you into selling, hold less of it. If it would not, the Solo 401(k) plus these three funds is one of the most tax-efficient ways to turn income you do not need into wealth your heirs almost certainly will need.

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