I am the newest partner in a small medical practice and have recently become fully vested in our retirement plan. Being the youngest and not fully vested, I had been hesitant to "speak up" until recently. Our current 401 K profit sharing plan has grown in both size and complexity over the past several years; however, the returns have been less than impressive with a great deal of redundancy between the funds. I began to ask some questions about our current plan and was immediately encouraged to begin working on cleaning it up. Changing the allocation and funds we hold is the easy part. What I am struggling with is the vehicle we us to move forward. With the new fiduciary rules set to launch in the next couple of years, it sounds like the complexity and cost of a 401K profit sharing plan will increase significantly. We currently pay a 3rd party administrator around $4,000/year and from what I can gather, those fees are expected to significantly increase over the next few years. My questions are this:
1. Is a 401K profit share plan the best option for a small medical practice (4 docs and 5 support staff) or is an option like a SEP IRA better and why? From what I can gather a SEP is cleaner and simpler, but it does create problems with backdoor Roth conversions and instead of being gradually vested, you are fully vested from day #1.
2. Are you required to have a stock broker/advisor for a 401K profit sharing plan/SEP IRA or can Vanguard handle that directly since we will be switching to a passive investment plan going forward and won't need "advice".
3. What type of plan do you use with your medical practice/small business? What do you like/dislike and why?
Thanks,
JH
1. Is a 401K profit share plan the best option for a small medical practice (4 docs and 5 support staff) or is an option like a SEP IRA better and why? From what I can gather a SEP is cleaner and simpler, but it does create problems with backdoor Roth conversions and instead of being gradually vested, you are fully vested from day #1.
2. Are you required to have a stock broker/advisor for a 401K profit sharing plan/SEP IRA or can Vanguard handle that directly since we will be switching to a passive investment plan going forward and won't need "advice".
3. What type of plan do you use with your medical practice/small business? What do you like/dislike and why?
Thanks,
JH
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