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Old 04-22-2012, 06:56 AM   #21
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SG, one step he can take is to get an actuarial firm to look at his census (list of employee ages and pay) and see what options are most feasible for his particular goals. These types of businesses are one of the last places left that still do DB plans as well as pension and profit sharing, but the rules are very specific to prevent the employees from being shut out. Usually you'll pay the actuary to create and admin the plan (filing 5500s and so forth) and the investments are independent of the actuarial work.
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Old 04-22-2012, 07:24 AM   #22
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There are hundred's of options available but one should go for the plan which can give maximum benefits. I think that you should give enough time to think about these plans and then decide with calmness.
Very insightful. Thanks for sharing that wisdom.
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Old 04-22-2012, 07:48 AM   #23
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I really appreciate the input thus far. It seems like many are suggesting a standard 401K would be better for him to set up, despite it costing more to create and manage.

A fundamental question I have is, why would any employer offer the SEP if he has to totally fund the employee's accounts? It seems to offer no advantages for an employer who has more than just himself or his spouse employed. Am I missing something here?
I wish this forum was here when I started my dental practice. I had to learn thru trial and error. At that time it was expected or promised that I would get 12% returns inside my retirement accounts so my contributions to employees were worth making the highest possible contribution. Thus I had SEPs and Keoghs. After about 5 years I saw what a disaster these plans were for accumulating wealth. Great for employees though. I would suggest a Simple plan if any.
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Old 04-22-2012, 08:56 AM   #24
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Thank you all for the additional input! I have forwarded the new responses to my friend. He tells me that he has decided for now to focus on paying off all of his debt this year and once that is done will focus on developing his investment plan. Sounds like a great plan to me!
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(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
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Old 04-22-2012, 10:52 AM   #25
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Thank you all for the additional input! I have forwarded the new responses to my friend. He tells me that he has decided for now to focus on paying off all of his debt this year and once that is done will focus on developing his investment plan. Sounds like a great plan to me!
Good plan. There is a group, McGill Advisory out of NC that has a great newsletter for docs. It's info specifically targeted to the health care field.
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Old 04-22-2012, 11:06 AM   #26
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Yes, I have been there and done that.

In my medical practice, I started out with a Keogh and a Pension Plan. It was expensive but let me put away more(Upto 50k a year).

Then I changed to a 401k plan(put away upto 17k/yr), the expense was more reasonable but they are lot of sharks in the field with bundled services, i.e they administer the plan meaning paper work and filing Form 5500 but then they limit you to the mutual funds with whom they have a relationship with, for investing your assets.
They get a back end undisclosed cut from these Mutual Funds or a front end load or in someway these mutual funds end up being costly to you.
Ex... some of these mutual funds are not low cost vanguard like mutual funds.
Most of the Medical practice employees do not contribute in the 401k, so you do not have to do any matching for them, whatsoever.

The best are the unbundled services, keep them separated

a)Keep one firm for administrating your 401K plan and

b)One for your Plan assets investments, something like Vanguard/Fidelity where you have the control and a large choice of low cost mutual funds.

The last I heard was that the Government was going after the Bundled Services Providers to make them disclose to their clients upfront, their compensation from the investment firms, which they limit their clients(You) to.

Now I stopped the retirement plan and have rolled over the assets into a IRA, as I practice part time now.

Come to think about it , in the present times we pay lower taxes, and people are paying the taxes on their saved assets in the IRAs to convert them to Roth IRAs and such.
Some employers it simple with no retirement plans, pay their taxes, save in taxable accounts and protect the assets with the Trust Accounts and such.

Good Luck
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Old 04-22-2012, 06:04 PM   #27
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Thank you so much everyone!
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(49, married; DH 53. I am fully retired as of 2015 (well ok, I still work part-time but only because I love the job and have complete freedom to call off if I want to travel with hubby for work), DH hopes to fully retire 2018 when he turns 55 to access 401K penalty-free...although he may decide to do part-time consulting)
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