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  • Solo 401k

    Seeking opinions regarding Solo 401k.

    I have a new side business as an OMD for a local fire department, beginning 1/1/21. I already have a PLLC set up for this purpose. I expect to gross $15,000 from it this year, $4000 of which I have to spend on malpractice insurance.

    I don't think that an SEP-IRA would work for me because I'm doing back door Roth contributions.

    Any suggestions for how and where to set up a Solo 401k?

  • #2
    I did Fidelity and have been very happy so far. The sole reason I chose Fidelity over Vanguard is b/c it can accept IRA rollovers, while Vanguard cannot. If you don't have a need to rollover an IRA now or in the future than Vanguard is fine, but I would do Fidelity to keep this option open. also Fidelity no account costs, have access to cheap fidelity funds (although the Fidelity zero funds are not available). Downside is Vanguard mutual funds you would need to pay a $35 fee but I just buy the corresponding ETF if I really wanted to get access to Vanguard fund and ETF trades are free. Just give them a call. You will also need to get an EIN number which is easy just google it very easy process.

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    • #3
      I usually rec ET or TDA. Live Fido, but they don’t allow Roth option (which usually dn matter)” but I like cover as many bases as possible). In your case Fido sb fine.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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      • #4
        https://www.whitecoatinvestor.com/wh...our-solo-401k/

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        • #5
          Related questions: what does OMD stand for? what is your main job/primary source of income? Are you employed or do you own your own practice?

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          • #6
            OMD is operational medical director. Medical supervision for EMS practice. The EMTs and paramedics by law must practice under the supervision of a physician, along with a set of established protocols, governed by the local EMS council.

            My main job is working in the ER. I'm technically a W2 employee, but the company likes to call us "owners" because we all have some fake stock in the company. My private practice group was forced to sell to this practice management company a few years ago, and we all took a significant pay cut for it. In the past, I never had a year that was less than $400k. Now, I'm lucky if I reach $350k.

            I still have some money coming in from collections for our private practice, but it only amounts to around $15k per year. Obviously it will dry up at some point.

            My goal is to retire from full-time practice by age 55, so I'm developing some other sources of income to carry me until around age 65, when we may start tapping the retirement accounts.

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            • #7
              I did Charles Schwab (because at the time my work 401k was there, and has since moved to fidelity. Schwab also accepts rollovers (or did at the time I created it). It's got super cheap index funds available, too. Kind of a pain to contribute, as you have to mail in a physical check, though, but my 1099 side gig stuff is intermittent and bolus-ey, so not a HUGE deal, but I'd really rather be able to do electronic contributions.

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              • #8
                Originally posted by emtpmd View Post
                My main job is working in the ER. I'm technically a W2 employee, but the company likes to call us "owners" because we all have some fake stock in the company.
                Define "fake" stock. Any ownership interest even an infinitesimal percentage can result in you being in an Affiliated Service Group with the company.

                It is extremely unlikey that the company meets the significant percentage threshold (mid single digits) of it services to the fire department for you to be considered in an Affiliated Service Group with them. However, if you really do have any ownership interest no matter how insignificant. You need to be aware of the possibly of being in an ASG, if you and the company provide services to the same third parties.

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                • #9
                  Originally posted by ROC MD View Post

                  Related questions: what does OMD stand for?
                  I’m glad I wasn’t the only one who didn’t know ;-)
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                  • #10
                    Originally posted by spiritrider View Post
                    Define "fake" stock. Any ownership interest even an infinitesimal percentage can result in you being in an Affiliated Service Group with the company.

                    It is extremely unlikey that the company meets the significant percentage threshold (mid single digits) of it services to the fire department for you to be considered in an Affiliated Service Group with them. However, if you really do have any ownership interest no matter how insignificant. You need to be aware of the possibly of being in an ASG, if you and the company provide services to the same third parties.
                    I did not know that since I am the owner of my internal medicine practice, I could not open an i401k, even if the two jobs are seperate. Thanks spiritrider.

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                    • #11
                      I contribute $19500 to my 401K and my employer contributes the rest to reach the $57000 maximum in 2020 (and 2021).

                      If I start my solo 401K, I assume that I can also contribute up to another $57000 as an employer contribution?

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                      • #12
                        Originally posted by emtpmd View Post
                        I contribute $19500 to my 401K and my employer contributes the rest to reach the $57000 maximum in 2020 (and 2021).

                        If I start my solo 401K, I assume that I can also contribute up to another $57000 as an employer contribution?
                        Correct, assuming you aren't an affiliated service group or controlled group (side gig and current employer). It does take quite a bit of side income to max the solo 401k with only employer contributions.

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                        • #13
                          Originally posted by jhwkr542 View Post

                          Correct, assuming you aren't an affiliated service group or controlled group (side gig and current employer). It does take quite a bit of side income to max the solo 401k with only employer contributions.
                          One suggestion if the income is between $50k & $100k is to use a MBD Roth for the solo-k.
                          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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                          • #14
                            Originally posted by jfoxcpacfp View Post

                            One suggestion if the income is between $50k & $100k is to use a MBD Roth for the solo-k.
                            which custodians allow for MBD Roth in solo 401k?

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                            • #15
                              Originally posted by cucumbers View Post

                              which custodians allow for MBD Roth in solo 401k?
                              The most-recommended that comes to mind is ET. Others alllow it but ET makes it the easiest to facilitate (someone correct me if I’m wrong and/or if this has changed).
                              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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