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401(k) Substitute?
Old 02-27-2013, 08:51 AM   #1
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Eyerishgold's Avatar
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401(k) Substitute?

My wife is accepting a new position at a small company which doesn't offer a 401(k) plan to its employees. Aside from maxing out her traditional IRA, is there any way to make up for the current tax advantages of a 401(k)? She's contributing 15k/yr into her current plan and adding that amount back into her income would have a negative impact on our taxes.

As a side note, I'm contracted as an agent for a 3PL company and have been thinking about incorporating and setting up a solo 401(k). Currently I just max out my IRA's and save the rest in a taxable account. Any advice is appreciated.

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Old 02-27-2013, 09:00 AM   #2
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You don't need to incorporate to set up a solo 401k. Sole proprietors are eligible.

"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."

- Will Rogers
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Old 02-27-2013, 10:11 AM   #3
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Once she gets settled and knows the players better, might she have a discussion asking if the company can set up a 401k program for its employees? If there is no company match as I understand it there would be no or minimal cost to the company and they could outsource it all to Vanguard or some other reputable player. Could be a win-win.

Another possibility is if you have a high deductible health insurance plan is to set up HSAs for you and DW. We think of ours as similar to a Roth but that we will need to spend the accumulated balances on qualified health care costs later in life.
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Old 02-28-2013, 09:49 PM   #4
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It is pretty important that you also have some Roth exposure, if your income allows.

If one spouse does not have a 401k, it is always possible to do some "income shifting" and load up one 401k, if you feel comfortable about it. To supplement that open up two Roth accounts -- once again if you are eligible.

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