WCI #260: Self Employed Retirement Accounts Q&A

Apr 28, 2022

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ADVICE

IRA Contribution Year Clarified

You can contribute to an IRA for the previous tax year up until you file your taxes the next year.
Specify the tax year when making the contribution so it counts correctly.

ADVICE

Avoid SEP IRAs With Backdoor Roths

Avoid opening a SEP IRA if you plan to use the backdoor Roth IRA annually.
Open and use a solo 401(k) instead to keep IRA balances at zero for Form 8606 simplicity.

ADVICE

Roll SEP Into Solo 401(k) Promptly

If you ever use a SEP IRA only as a stopgap, roll it into a solo 401(k) promptly and stop using SEPs going forward.
Better: open the solo 401(k) initially to avoid rollover hassles.

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In this episode we answer your questions about self-employed retirement plans. If you are self-employed, open a solo/individual 401(k). If you make a lot of money, you might consider a personal defined benefit plan. Do a backdoor Roth IRA and a health savings account. Those are your retirement plans for a self-employed doc. That's the basic setup. Anything you want to save above and beyond that goes in a taxable account. So it is not that complicated. When you get into all the details though, there can be a lot more questions. We tackle those questions in this episode. See show notes here https://www.whitecoatinvestor.com/self-employed-retirement-accounts-qa-260/

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The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs for specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor channel is for you!

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