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Clinic I work for only offers Simple IRA

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  • jfoxcpacfp
    replied
    You can make up to a $13,500 SIMPLE contribution if < age 50 and an additional if you are age 50+. I’ll be honest - that’s the plan we have always used in our office and I doubt I’ll change anytime soon. Why? Because I don’t believe anyone but myself would max out a 401k and it’s just not worth the cost for me and, maybe, my 2 partners (1 in CPA and 1 in financial planning). Better tp simply build up a taxable account.

    Yes, you need to participate - WTH not?1? You get a tax deduction for your contributions and your employer will match 3% (not any different from a safe-harbor 401k. In addition, you can use any custodian you choose with the investments you choose.

    2 yrs from when you first participate, you are free to do whatever you want to the account without the onerous 25% penalty. Of course, you’ll still be penalize 10% for early w/d, same as other accts. Find some SE income and open a solo-k during that time. OR do a backdoor Roth and pay pro-rata taxes, which I don’t see as a really bad thing (you’re only paying taxes on your TIRA withdrawal before you retire and begin RMDs - but you’re also putting $$ in and allowing it to grow tax-free. Not a big deal in the huge scheme of your retirement planning and maybe even a plus (such as right now).

    I did not post this response to say that a SIMPLE is superior to a 401k. But, it has merit and a 401k is not OSFA for a small employer. Take advantage of the tax deduction today - for sure - and then decide what to do with your SIMPLE savings in 2 yrs. It’s 100% up to the employee to manage - no employer limitations at that point.

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  • runfast00
    replied
    We have a SIMPLE IRA at our private practice. Although it is not a great option, it is something.

    I do some side 1099 gigs and have an i401K as well that I give the max possible from side income.

    My biggest hurdle with SIMPLE is transferring balance out to i401K each year so that my Dec 31 balance is zero. That way I am eligible if I want to do a backdoor Roth

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  • Peds
    replied
    well you cant deduct tIRA
    and you cant cont to rIRA
    and simple is one of the worst options. but its all you got.

    talk to employer to change plans.

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  • Aapl
    started a topic Clinic I work for only offers Simple IRA

    Clinic I work for only offers Simple IRA

    Hi everyone. New doc here seeking advice.
    The company I work for does not offer a 401k and only offers a Simple IRA (which I believe you can put up to 12k into) with 3% matching. Is this a good option to pursue? I'm about to make my first contribution to a retirement acct and not sure if I should take this option or put into a traditional or roth IRA. Thanks!
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