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Discussion Posts

    • Retirement plans

      • Posted by jbogey
      • on June 27, 2008 12:04 PM EDT
      I have a ER physician client,(43 years old) who is considering dropping 3 shifts per month as an employee and picking up 3 shifts as an independent contractor. His reasoning is that he wants to contribute more to a retirement plan, probably a SEP/IRA.  His current 401k plan contribution is about $22,000 annually. This includes employer contributions and he is maxed out. His salary is $245,000 annually.

      So lets assume he nets $25,000 from being self employed and still can max out his 401K plan. Would he be able to deduct the full 20% SEP/IRA contribution?
       
    • Re: Retirement plans
      • Posted by smithdom
      • on June 30, 2008 3:00 PM EDT
      No, he wouldn't.  I used to be in the same position as your physician. Jeremy Louder showed me the easiest and safest ways to invest my money. Check out his website quadwealth.com
       
    • Re: Retirement plans
      • Posted by no bd for me
      • on July 1, 2008 6:29 AM EDT

      jbogey,

      The Section 415 limit is $46,000 for 2008, which is aggregated between various employer plans.  You physician can put more pre-tax money away by doing what he proposed.  You may also want to consider a profit sharing plan instead of a SEP.

      Smithdom: You shouldn't make obvious plugs as you did.  You didn't add any value to the discussion in what you wrote.

       
    • Re: Retirement plans
      • Posted by jbogey
      • on July 1, 2008 2:31 PM EDT
      Would his employer contribution be factored in this amount?
       
    • Re: Retirement plans
      • Posted by Buzz
      • on July 1, 2008 2:36 PM EDT
      At his income level you want to check out a Defined Benefit Plan.  You can substantially increase the contribution.
       
    • Re: Retirement plans
      • Posted by jbogey
      • on July 1, 2008 2:47 PM EDT
      He's not yet ready for the commitment to a DB plan, Buzz. He has a young family and will stay an employee for awhie. His goal is to drop 3-4  ER shifts per month from his current employer and pick up 3-4 per month as an independent contractor.  The per diem is  often higher with the latter and as mentioned some extra retirement contribtion. Simplicity is the key.

      So back to my last question about the employer contribution. 
       
    • Re: Retirement plans
      • Posted by no bd for me
      • on July 2, 2008 7:45 AM EDT
      Would his employer contribution be factored in this amount?

      Yes, it's factored into the 415 limit.

      KK