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401k contributions when transitioning to fellow stipend

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  • 401k contributions when transitioning to fellow stipend

    Hi, I’m an attending 1 year out and my wife is starting her second year of fellowship. We’ve been maxing out our 401ks, backdoor Roth IRAs, HSA account and investing in a brokerage account.

    My wife is transitioning from a W2 employee this year to receiving a fellowship stipend. This way my understanding is that she won’t have to pay social security or Medicare however she doesn’t have a retirement account anymore. We’ve been contributing to her 401k throughout the year however we’ve only contributed half a year to her 401k (about $10k). Is there a way for us to max out her yearly contribution at this point or is it too late? Can she open a solo 401k or does that affect the social security and Medicare withholdings?

    thanks in advance

  • #2
    • She can max out through current position (didn’t say when transitioning, realize it’s prob too late)
    • She can do 1099 shifts and open solo-k and contribute
    • She can NOT open a solo-k for income that is not deemed “earned” (ie, no FICA tax due on it).
    Good time to build up the taxable account even more. Maybe contribute to a 529 if your state offers tax benefits.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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