Pre tax accounts

[Nahuja]

I'm joining a private practice which doesn't offer a 401k plan and my husband's job doesn't either. We don't qualify for Roth IRA. He has some money in a traditional IRA that his dad started for him years back as well as a couple of 401k plans from prior jobs. He is a W2 employee currently.

I want to get your thoughts on how to save for retirement.

Thanks!

[DMFA]

Tell your private practice to start one. Why in the world do they not? No DBP? No 403(b), 457, or TSP either in case your spouse works for a non-profit or the government? That's awful tax inefficiency.

Are you paid as an employee or self-employed or partnership? Do you get distributions?

HSA if you have a HDHP. Either deduct your TIRA contributions or do backdoor Roth. Rest can go in taxable.

[Nahuja]

They have it for the ancillary staff and are looking to include physicians but nothing is established and don't think it will be by the time I start. Once I start, I'll be paid as an employee via w2.

Spouse is part of a family business so doesn't have benefits aside from health insurance.

Planned on doing HSA and back for Roth. Was just hoping for other avenues.

How would creating a solo401k work if I did some loving work? How much would I have to make to be able to contribute the full 18k and could I create one for my husband? Is this even worth it?

I'm a novice but trying to get up to speed so I'm not working forever!

[Nahuja]

Locums work

[DMFA]

You could make both employee and employer contributions, so any amount should work. Up to $18,000 in salary deferral and then up to 20% of net profit (income, minus expenses, minus half of self-employment tax) to a total of $54,000. So if you wanted to put the max in there including employee portion, you'd have to make about $198,000 from loving work...I mean, locum work.

I'm not sure people who do "loving work" tend to have 401(k)s...lol

You can't create a retirement account for someone else. Your husband would have to do his own self-employed work to have an individual 401(k)...but why can't his family business have one? Why would they have 401(k) for the ancillary staff, but not physicians who would benefit far more from the tax deduction?

[Hatton]

Another classic for autocorrect. Loving work = locum.  Mine just autocorrected to locus.

[jfoxcpacfp]

DMFA wrote:

So if you wanted to put the max in there including employee portion, you’d have to make about $198,000 from loving work…I mean, locum work. I’m not sure people who do “loving work” tend to have 401(k)s…lol

Click to expand...

First chuckle of the day, good for the heart. I have never been offered a 401k for my loving work.

[litovskyassetmanagement]

Nahuja wrote:

They have it for the ancillary staff and are looking to include physicians but nothing is established and don’t think it will be by the time I start. Once I start, I’ll be paid as an employee via w2.

Spouse is part of a family business so doesn’t have benefits aside from health insurance.

Planned on doing HSA and back for Roth. Was just hoping for other avenues.

How would creating a solo401k work if I did some loving work? How much would I have to make to be able to contribute the full 18k and could I create one for my husband? Is this even worth it?

I’m a novice but trying to get up to speed so I’m not working forever!

Click to expand...

It sounds like you are not one of the partners, and physicians are probably excluded from participation (to save money for the practice).  Bad idea.  They should at the very least open the plan for physicians to contribute, and better yet, give non-partner physicians a match.  If they value their staff, they might also consider doing some profit sharing for physicians, if the cost to the practice is justified.  Adding physicians to the plan (even without a match) won't cost anything, so that's the least they should do.

[hightower]

Yeah, that's crazy to not have access to a pre-tax retirement plan.  Are you absolutely sure you want to work for them?  If its a locums company you could easily find a better one that does offer 401k or at least pays you as a private contractor so you can open your own retirement account.