White Coat Investor Podcast

WCI #251: How to Fix the Retirement Account System

Feb 24, 2022
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ADVICE

Remember The One Employee Contribution Rule

  • Employee elective deferral limit is one-per-person per year (e.g., $20,500 in 2022) regardless of number of employers.
  • Per-plan total limits (e.g., $61,000 in 2022) apply per unrelated employer and are separate from IRA limits.
ADVICE

Max Out Side-Gig Retirement Contributions

  • If you have side gig income, you can add employer contributions via a solo 401(k) up to about 20% of net income from that gig.
  • S-corp owner contributions are limited to 25% of W-2 salary, so raise W-2 pay to increase contribution room.
ADVICE

Get Pro Help For Small-Business 401(k)s

  • If you have employees you must get professional help to set up a retirement plan; it isn't a DIY project anymore.
  • Use a plan provider experienced with small practices and get a census/analysis to choose the right plan.
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