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  • SIMPLE 401k

    Does anyone offer this anymore?  depending on the administration cost this would be a decent option to allow backdoor roths...

  • #2
    Yes, they are allowed and yes, the administration costs should be lower than for traditional 401k's. If your goal to do a tax-free backdoor Roth overrides your goal of saving more, this could be an acceptable option.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3




      Yes, they are allowed and yes, the administration costs should be lower than for traditional 401k’s. If your goal to do a tax-free backdoor Roth overrides your goal of saving more, this could be an acceptable option.
      Click to expand...


      Do you know of anyone that offers this?  I didn't see it available on employee fiduciary, vanguard, or fidelity.

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      • #4
        No mainstream provider that I am aware of offers a SIMPLE 401k plan. So your best bet is a TPA.

        I'm sure that they were intended to provide a 401k with lower administrative costs. However, with the reduction in administrative costs for small business 401k plans, I am very skeptical you will save money with a SIMPLE 401K plan.

        You are going to pay one way or another. You will pay administrative fees and/or the administrator is going to recoup money from high expense ratio funds and/or AUM fees.

        I'm sure Edward Jones or any other parasite will hook you right up.

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        • #5




          No mainstream provider that I am aware of offers a SIMPLE 401k plan. So your best bet is a TPA.

          I’m sure that they were intended to provide a 401k with lower administrative costs. However, with the reduction in administrative costs for small business 401k plans, I am very skeptical you will save money with a SIMPLE 401K plan.

          You are going to pay one way or another. You will pay administrative fees and/or the administrator is going to recoup money from high expense ratio funds and/or AUM fees.

          I’m sure Edward Jones or any other parasite will hook you right up.
          Click to expand...


          Even they won't be able to handle that one.  Some plans just don't really exist anymore except on paper.  It would also take a knowledgeable record-keeper. Simple 401k does not have any significant advantages over SIMPLE other than a higher contribution limit - if anything, SIMPLE 401k would require a record-keeper and a TPA while a SIMPLE IRA does not, so that negates higher contribution limit.
          Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

          Comment


          • #6







            No mainstream provider that I am aware of offers a SIMPLE 401k plan. So your best bet is a TPA.

            I’m sure that they were intended to provide a 401k with lower administrative costs. However, with the reduction in administrative costs for small business 401k plans, I am very skeptical you will save money with a SIMPLE 401K plan.

            You are going to pay one way or another. You will pay administrative fees and/or the administrator is going to recoup money from high expense ratio funds and/or AUM fees.

            I’m sure Edward Jones or any other parasite will hook you right up.
            Click to expand…


            Even they won’t be able to handle that one.  Some plans just don’t really exist anymore except on paper.  It would also take a knowledgeable record-keeper. Simple 401k does not have any significant advantages over SIMPLE other than a higher contribution limit – if anything, SIMPLE 401k would require a record-keeper and a TPA while a SIMPLE IRA does not, so that negates higher contribution limit.
            Click to expand...


            Well, there you go. I had not looked for providers and can't tell you anyone who does it, either, so, as Kon Litovsky said, this appears to be a good idea on paper only.
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

            Comment


            • #7










              No mainstream provider that I am aware of offers a SIMPLE 401k plan. So your best bet is a TPA.

              I’m sure that they were intended to provide a 401k with lower administrative costs. However, with the reduction in administrative costs for small business 401k plans, I am very skeptical you will save money with a SIMPLE 401K plan.

              You are going to pay one way or another. You will pay administrative fees and/or the administrator is going to recoup money from high expense ratio funds and/or AUM fees.

              I’m sure Edward Jones or any other parasite will hook you right up.
              Click to expand…


              Even they won’t be able to handle that one.  Some plans just don’t really exist anymore except on paper.  It would also take a knowledgeable record-keeper. Simple 401k does not have any significant advantages over SIMPLE other than a higher contribution limit – if anything, SIMPLE 401k would require a record-keeper and a TPA while a SIMPLE IRA does not, so that negates higher contribution limit.
              Click to expand…


              Well, there you go. I had not looked for providers and can’t tell you anyone who does it, either, so, as Kon Litovsky said, this appears to be a good idea on paper only.
              Click to expand...


              Of course, a TPA somewhere can probably do a plan document, since there is a provision in the code.  But finding a record-keeper would be challenging (and might not even be possible to find anyone who would be willing to set this up).  I'll ask around, it would be interesting to see if anyone still does these plans.
              Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

              Comment


              • #8
                It does appear that SIMPLE 401k is not something that anyone knows about or offers.  I've asked someone with 30 years experience and they haven't even seen one of these things in all that time, which probably means that these are very uncommon, if they exist at all. That is not to say that you can't get one.  If you can find a TPA and a record-keeper who would be willing to put one together, I'm sure it is more than possible to do that, but I doubt there would be many takers for it given that there is no market.
                Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

                Comment

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