Author Topic: Advice on Solo 401Ks? [formerly: When being mustachian screws you at work]  (Read 10291 times)

monstermonster

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So the ongoing saga of my 401K being taken away is still happening.

My lovely little nonprofit, which pays most of our employees $13-16/hour, is about to switch out our 401k for just individual IRAs (not SIMPLE*). I've worked really hard to try to convince our (very nice) finance director that we in fact need to keep the 401K or replace it with another pre-tax retirement vehicle, but in the end it's coming down to the fact that absolutely no one else is maxing out their IRA outside of work, so if we can save the organization money by forgoing the 401K, we will.

Because I'm the only person who saves more than $5500/year for retirement, I'm soon to be out of options. Unless I can pull out some serious justification for why we should keep paying $2400/year in administrative fees to essentially only benefit me, I am losing ~$1,344 of money to taxes because of losing my 401K.

As I see it, my options are: 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K 3) Come up with a REALLY compelling case for why we should keep the 401K

Am I missing an option?

*SIMPLE IRA would be the best choice except it requires a match, which is greater than our current 401k admin fees
« Last Edit: January 15, 2016, 12:07:04 PM by monstermonster »

smalllife

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Re: When being mustachian screws you at work
« Reply #1 on: October 07, 2015, 12:21:02 PM »
As for a raise that will net you the equivalent of $1,344 in your pocket?  It would be for after tax investments, but it would drive home the point that losing the 401k is costing you money and that maybe a renegotiation of your payment and benefits is in order.

Would you be open to a 401k with higher fees?  That would take the administrative burden off the company and onto the participants (you) but would keep the 401k as an option.  I talked our CEO into the reverse - they kept their crappy provider but negotiated a different tier structure which helped a bit.

DaveR

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Re: When being mustachian screws you at work
« Reply #2 on: October 07, 2015, 01:00:32 PM »
... 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K ...

How about 1 + 2... leave your job to be a consultant (with solo 401k), and your first client is your former employer?

monstermonster

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Re: When being mustachian screws you at work
« Reply #3 on: October 07, 2015, 01:35:14 PM »
... 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K ...

How about 1 + 2... leave your job to be a consultant (with solo 401k), and your first client is your former employer?

Yea, I like health insurance and PTO and bike part benefits (part of my benefits) a bit too much to be a full-time consultant again.

monstermonster

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Re: When being mustachian screws you at work
« Reply #4 on: October 07, 2015, 01:38:22 PM »
As for a raise that will net you the equivalent of $1,344 in your pocket?  It would be for after tax investments, but it would drive home the point that losing the 401k is costing you money and that maybe a renegotiation of your payment and benefits is in order.
I make a lot more than most people in the organization ($19/hr as opposed to an average of $13.50/hr) and last justified a $10K raise just 4 months ago. So another raise might be good for the sake of argument but not for the sake of my perception at the org

Would you be open to a 401k with higher fees?  That would take the administrative burden off the company and onto the participants (you) but would keep the 401k as an option.  I talked our CEO into the reverse - they kept their crappy provider but negotiated a different tier structure which helped a bit.
Do I understand this correctly? Are you suggesting I pay the recordkeeping fees? Unfortunately, if I paid the admin fees, I'd be paying more each year than I'm saving in taxes (the fees are $2400/annually regardless of # of participants), so it would be better to just put it in a taxable account.

norabird

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Re: When being mustachian screws you at work
« Reply #5 on: October 07, 2015, 01:41:45 PM »
You can still save in other tax advantaged funds without a work 401k--roth contributions, 529 plan (depending on school plans/kids). So do that, job hunt, and in the interim ask for a raise related to the benefit you are losing.

smalllife

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Re: When being mustachian screws you at work
« Reply #6 on: October 07, 2015, 01:47:00 PM »
Would you be open to a 401k with higher fees?  That would take the administrative burden off the company and onto the participants (you) but would keep the 401k as an option.  I talked our CEO into the reverse - they kept their crappy provider but negotiated a different tier structure which helped a bit.
Do I understand this correctly? Are you suggesting I pay the recordkeeping fees? Unfortunately, if I paid the admin fees, I'd be paying more each year than I'm saving in taxes (the fees are $2400/annually regardless of # of participants), so it would be better to just put it in a taxable account.

Plans either pass along the fees to participants (higher cost funds) or admins.  I was suggesting talking to your employer about a 401k plan that is less expensive to them directly but more to the participants.  It depends what your break even is on a high fee fund vs. pre-tax savings and might not be worth it, but it was an idea to keep your 401k.  If that's a fixed cost plan then it doesn't really matter (mine was x% of plan value where most of the broker fees were paid by the fund fees).

JPinDC

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Re: When being mustachian screws you at work
« Reply #7 on: October 07, 2015, 01:54:54 PM »
What happened to the Vanguard 403(b) program you mentioned in other thread?

monstermonster

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Re: When being mustachian screws you at work
« Reply #8 on: October 07, 2015, 02:02:52 PM »
What happened to the Vanguard 403(b) program you mentioned in other thread?

Turns out it costs as much to administer as the 401K's do so there's not much of an advantage to having it.

monstermonster

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Re: When being mustachian screws you at work
« Reply #9 on: October 07, 2015, 02:05:50 PM »
You can still save in other tax advantaged funds without a work 401k--roth contributions, 529 plan (depending on school plans/kids). So do that, job hunt, and in the interim ask for a raise related to the benefit you are losing.

I already max out the roth and I don't have any dependents or future schooling but I do have/need regular health insurance, so 529 and an HSA/FSA don't really work for me. So short of a solo401k or a work 401k, I'm out of additional options.

Easye418

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Re: When being mustachian screws you at work
« Reply #10 on: October 07, 2015, 02:11:09 PM »
So the ongoing saga of my 401K being taken away is still happening.

My lovely little nonprofit, which pays most of our employees $13-16/hour, is about to switch out our 401k for just individual IRAs (not SIMPLE*). I've worked really hard to try to convince our (very nice) finance director that we in fact need to keep the 401K or replace it with another pre-tax retirement vehicle, but in the end it's coming down to the fact that absolutely no one else is maxing out their IRA outside of work, so if we can save the organization money by forgoing the 401K, we will.

Because I'm the only person who saves more than $5500/year for retirement, I'm soon to be out of options. Unless I can pull out some serious justification for why we should keep paying $2400/year in administrative fees to essentially only benefit me, I am losing ~$1,344 of money to taxes because of losing my 401K.

As I see it, my options are: 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K 3) Come up with a REALLY compelling case for why we should keep the 401K

Am I missing an option?

*SIMPLE IRA would be the best choice except it requires a match, which is greater than our current 401k admin fees

Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 

What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I'm not trying to be offensive to nonprofit workers, I just don't understand how the dollars and cents work with them.
« Last Edit: October 07, 2015, 02:12:42 PM by Easye418 »

monstermonster

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Re: When being mustachian screws you at work
« Reply #11 on: October 07, 2015, 02:19:24 PM »
Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 
What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I have an BS in economics from a good college. I really care about the work I do, which is why I do it. I'm good at it, and it makes the world not suck. And I don't have to worry about things like this very often. And generally other people who work in nonprofits are nice people too, so it helps to have good coworkers. We get to eat a lot of free hummus. That's a cool perk. I did a 6 week internship at a tech startup and the sexist, bro attitude was a huge shock coming from the world of saving needy kittens and children.

I've been working in nonprofits my entire life (other than a short stint working for a congressperson, where I made even less - congressional aides make about 12$/hr). I don't really know what else I would do, short of consulting for nonprofits.

But yea, nonprofit burnout is real. I work an average of 65 hours a week, and bad weeks it goes as high as 89 hours.

Oh, I forgot to mention that on $19/hr, I still save 50% of my income. So YEA. It helps I did Americorps and social work when I was younger so I was used to living on $800/month.
« Last Edit: October 07, 2015, 02:21:00 PM by monstermonster »

marcela

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Re: When being mustachian screws you at work
« Reply #12 on: October 07, 2015, 02:29:01 PM »
So the ongoing saga of my 401K being taken away is still happening.

My lovely little nonprofit, which pays most of our employees $13-16/hour, is about to switch out our 401k for just individual IRAs (not SIMPLE*). I've worked really hard to try to convince our (very nice) finance director that we in fact need to keep the 401K or replace it with another pre-tax retirement vehicle, but in the end it's coming down to the fact that absolutely no one else is maxing out their IRA outside of work, so if we can save the organization money by forgoing the 401K, we will.

Because I'm the only person who saves more than $5500/year for retirement, I'm soon to be out of options. Unless I can pull out some serious justification for why we should keep paying $2400/year in administrative fees to essentially only benefit me, I am losing ~$1,344 of money to taxes because of losing my 401K.

As I see it, my options are: 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K 3) Come up with a REALLY compelling case for why we should keep the 401K

Am I missing an option?

*SIMPLE IRA would be the best choice except it requires a match, which is greater than our current 401k admin fees

Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 

What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I'm not trying to be offensive to nonprofit workers, I just don't understand how the dollars and cents work with them.

I work at a non-profit at a mid-level position and I make $26/hr. My undergraduate degree was in Art History. I am on the lower end of salaries for my type of work within my organization (only been in my position 6 months) and some of my co-workers make $80,000-100,000. Just like for-profit jobs, there is a wide range. I make more money than my friends in for-profit businesses.
Some of the benefits I have include some free tuition for classes, excellent insurance, ample time off and retirement benefits. 

beltim

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Re: When being mustachian screws you at work
« Reply #13 on: October 07, 2015, 02:30:20 PM »
Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 

What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I'm not trying to be offensive to nonprofit workers, I just don't understand how the dollars and cents work with them.

To me, one of the benefits of mustachianism is empowering people to choose their career based on considerations other than monetary ones.  There's a lot of engineers here who hate their jobs after 10 years, and want to retire fast.  That's great, but there are lots of people who derive satisfaction from their work - indeed, that's why they chose their career. 

Put another way, why work for 10 years doing something you hate, to retire to something you love, when you could have instead just done what you love all along?  Lots of people have decided that the 10 years are something they can't get back, and wouldn't be worth the difference in money.

monstermonster

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Re: When being mustachian screws you at work
« Reply #14 on: October 07, 2015, 02:34:50 PM »
I work at a non-profit at a mid-level position and I make $26/hr. My undergraduate degree was in Art History. I am on the lower end of salaries for my type of work within my organization (only been in my position 6 months) and some of my co-workers make $80,000-100,000. Just like for-profit jobs, there is a wide range. I make more money than my friends in for-profit businesses.
Some of the benefits I have include some free tuition for classes, excellent insurance, ample time off and retirement benefits.

Oh the world of higher ed. *looks on gazingly* You aren't even in the realm of the type of nonprofits I work in, but sometimes I fantasize about all your benefits.

That's a good point: while at my org the CEO makes 50K, that's because we're a scrappy nonprofit that literally fixes things with bike innertubes. But for my same position in higher ed, I'd make a LOT more money. My 40K job would be ~80K. But then I wouldn't get as much free hummus or get to work with adorable children getting their first bicycle!

Easye418

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Re: When being mustachian screws you at work
« Reply #15 on: October 07, 2015, 02:36:33 PM »

I work at a non-profit at a mid-level position and I make $26/hr. My undergraduate degree was in Art History. I am on the lower end of salaries for my type of work within my organization (only been in my position 6 months) and some of my co-workers make $80,000-100,000. Just like for-profit jobs, there is a wide range. I make more money than my friends in for-profit businesses.
Some of the benefits I have include some free tuition for classes, excellent insurance, ample time off and retirement benefits. 

To me, one of the benefits of mustachianism is empowering people to choose their career based on considerations other than monetary ones.  There's a lot of engineers here who hate their jobs after 10 years, and want to retire fast.  That's great, but there are lots of people who derive satisfaction from their work - indeed, that's why they chose their career. 

Put another way, why work for 10 years doing something you hate, to retire to something you love, when you could have instead just done what you love all along?  Lots of people have decided that the 10 years are something they can't get back, and wouldn't be worth the difference in money.

I have an BS in economics from a good college. I really care about the work I do, which is why I do it. I'm good at it, and it makes the world not suck. And I don't have to worry about things like this very often. And generally other people who work in nonprofits are nice people too, so it helps to have good coworkers. We get to eat a lot of free hummus. That's a cool perk. I did a 6 week internship at a tech startup and the sexist, bro attitude was a huge shock coming from the world of saving needy kittens and children.

I've been working in nonprofits my entire life (other than a short stint working for a congressperson, where I made even less - congressional aides make about 12$/hr). I don't really know what else I would do, short of consulting for nonprofits.

But yea, nonprofit burnout is real. I work an average of 65 hours a week, and bad weeks it goes as high as 89 hours.

Oh, I forgot to mention that on $19/hr, I still save 50% of my income. So YEA. It helps I did Americorps and social work when I was younger so I was used to living on $800/month.

Thank you for this input.  Makes a lot more sense to me now.

That burn out scares me.  I wake up at 630, leave at 7am, get to work at 830AM, leave at 5PM, get home at 630PM...every day.  I get everything I need to get done and more.

I guess where I am getting mindblown with is that my undergrad alone cost about $40k and making $40k for a long stretch of time would just stunt my life so much.   However, I am not necessarily a MMM nor a fancy pants.... so I'm not shorts (MMM) but not italian wool (fancy pants), but a nice, durable pair of khakis.
« Last Edit: October 07, 2015, 02:42:15 PM by Easye418 »

marcela

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Re: When being mustachian screws you at work
« Reply #16 on: October 07, 2015, 02:45:36 PM »
I work at a non-profit at a mid-level position and I make $26/hr. My undergraduate degree was in Art History. I am on the lower end of salaries for my type of work within my organization (only been in my position 6 months) and some of my co-workers make $80,000-100,000. Just like for-profit jobs, there is a wide range. I make more money than my friends in for-profit businesses.
Some of the benefits I have include some free tuition for classes, excellent insurance, ample time off and retirement benefits.

Oh the world of higher ed. *looks on gazingly* You aren't even in the realm of the type of nonprofits I work in, but sometimes I fantasize about all your benefits.

That's a good point: while at my org the CEO makes 50K, that's because we're a scrappy nonprofit that literally fixes things with bike innertubes. But for my same position in higher ed, I'd make a LOT more money. My 40K job would be ~80K. But then I wouldn't get as much free hummus or get to work with adorable children getting their first bicycle!

Trust me, I paid my dues in scrappy non-profits too. Before coming here, my salaries were in the $18,000-$25,000 range and when I was a TA I made a whopping $10,700. I ended up deciding that as much as I loved the causes, it wasn't worth the emotional and financial toll. Now I'm in a position where I can support monetarily the organizations I used to work for and still know my family is provided for.

monstermonster

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Re: When being mustachian screws you at work
« Reply #17 on: October 07, 2015, 02:45:57 PM »
I guess where I am getting mindblown with is that my undergrad alone cost about $40k and making $40k for a long stretch of time would just stunt my life so much.
If you work for nonprofits, after 10 years, many people get to benefit from student loan forgiveness. It's a bit of a complicated program, but it is pretty awesome for people with heavy student loan debt and a low-paying public interest job. Also student loans can be put on Income based repayment, which if your living is small, may be a very small amount, and then they are forgiven after 120 payments. Not a perfect system, overly complicated, but one way to deal with that.

For me personally I went to a small college where the sticker prices was $50K/year but because I was coming from years of working for poverty-level wages, they paid for most of it with financial aid (grants not loans). I came in with $10K of an educational grant from serving 2 years in Americorps. And then I worked all the way through undergrad 20 hours/week so I didn't have to take out any loans. So I ended up graduating free and clear. Some fellowships and scholarships helped along the way.

monstermonster

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Re: When being mustachian screws you at work
« Reply #18 on: October 07, 2015, 02:46:30 PM »
Now I'm in a position where I can support monetarily the organizations I used to work for and still know my family is provided for.

And now my job is asking people like you for money! ;) You're my favorite kinds of supporters <3

monstermonster

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Re: When being mustachian screws you at work
« Reply #19 on: October 07, 2015, 02:54:30 PM »
That burn out scares me.  I wake up at 630, leave at 7am, get to work at 830AM, leave at 5PM, get home at 630PM...every day.  I get everything I need to get done and more.

Is your commute 3 hours each day? Damn! That sounds agonizing.

JustTrying

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Re: When being mustachian screws you at work
« Reply #20 on: October 08, 2015, 12:07:11 AM »
*SIMPLE IRA would be the best choice except it requires a match, which is greater than our current 401k admin fees
[/quote]

Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 

What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I'm not trying to be offensive to nonprofit workers, I just don't understand how the dollars and cents work with them.
[/quote]

I work for a non-profit, but I make almost 6 digits. I should be at the 6-digit point in 2 years. Non-profit doesn't always mean low-pay. The big advantage for me right now is that it qualifies me for public service loan forgiveness (I pray that PSLF doesn't get obliterated). My health insurance is far better than I've had at any previous job. I could make more money if I started my own business, but I have no interest in being a business-owner, so for me, the non-profit job works well!

Villanelle

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Re: When being mustachian screws you at work
« Reply #21 on: October 08, 2015, 12:49:46 AM »
So the ongoing saga of my 401K being taken away is still happening.

My lovely little nonprofit, which pays most of our employees $13-16/hour, is about to switch out our 401k for just individual IRAs (not SIMPLE*). I've worked really hard to try to convince our (very nice) finance director that we in fact need to keep the 401K or replace it with another pre-tax retirement vehicle, but in the end it's coming down to the fact that absolutely no one else is maxing out their IRA outside of work, so if we can save the organization money by forgoing the 401K, we will.

Because I'm the only person who saves more than $5500/year for retirement, I'm soon to be out of options. Unless I can pull out some serious justification for why we should keep paying $2400/year in administrative fees to essentially only benefit me, I am losing ~$1,344 of money to taxes because of losing my 401K.

As I see it, my options are: 1) Leave my job 2) Start freelancing/contracting again so I can start up a solo 401K 3) Come up with a REALLY compelling case for why we should keep the 401K

Am I missing an option?

*SIMPLE IRA would be the best choice except it requires a match, which is greater than our current 401k admin fees

Jesus christ, how many MMMs work for nonprofits?  $13-$16/hr is the average.  At that rate, I would have to work until I was dead to retire. 

What kind of degrees work for nonprofits?  Are they Human Services majors or something?

Are there any perks of working for nonprofits or is a humanitarian good feeling/philanthropist?

I'm not trying to be offensive to nonprofit workers, I just don't understand how the dollars and cents work with them.

Most of my career has been in non-profits, and university-based ones at that.  I made better money than that and a 10% contribution (not a match; it was automatic for everyone) to a 403b. 

My last job paid about 50k, or perhaps more by now. No special skills required, and technically no college degree, although nearly everyone had one and the few who didn't had started at the very bottom and worked their way up.  No loan forgiveness, and because we were the non-profit branch of the university, no reduced tuition like the university staff got. 

If it matters, that last job was grant administration.  Basically, we told professors and university-affiliated non-profits what they could and could not spend various grant monies on, based on the terms of the grant and university policy.  Fiscal oversight of grant and donation money, basically.  I had no special training, but I had worked for several of the university's non-profits as I worked my way up, so I was familiar with how grants work and how the university worked, which qualified me to work at central staff. 

Valetta

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Re: When being mustachian screws you at work
« Reply #22 on: October 08, 2015, 11:42:30 AM »
There are higher salaries in other nonprofits, it's not just higher ed. I work for a human services org - we do employment and housing work for people living in poverty. I make $90k (in the midwest).

Even at the very small arts organization - only a $1m budget - where I'm on the Board, we just hired a Development Manager at $55k. And arts is one of the lowest paying nonprofit fields in our geographic area. Similar to my last job in Human Services - doing employment work for people coming out of prison - we had 13 staff and I was paid $55k.

It's really not all bad. It actually drives me kind of nuts that people think working for a nonprofit must be so terrible and so low-paying. There is a lot of variation from organization to organization.

frugaliknowit

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Re: When being mustachian screws you at work
« Reply #23 on: October 08, 2015, 11:49:15 AM »
You are not "losing" $1,344.  You can no longer "defer" $1,344. 

Easye418

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Re: When being mustachian screws you at work
« Reply #24 on: October 08, 2015, 11:55:11 AM »
That burn out scares me.  I wake up at 630, leave at 7am, get to work at 830AM, leave at 5PM, get home at 630PM...every day.  I get everything I need to get done and more.

Is your commute 3 hours each day? Damn! That sounds agonizing.

Yeah, 3 hours each day.  Another reason why I am moving

@Valetta
@Villanelle
@JustTrying

Thanks for the insights.  I actually knew nothing about non-profits before this forum.

monstermonster

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Re: When being mustachian screws you at work
« Reply #25 on: October 09, 2015, 12:47:57 PM »
I work for a non-profit, but I make almost 6 digits. I should be at the 6-digit point in 2 years. Non-profit doesn't always mean low-pay.

My big question: what do you do in the sector that earns you that takeaway? That's really substantial.

elaine amj

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Re: When being mustachian screws you at work
« Reply #26 on: October 09, 2015, 02:00:45 PM »
Nonprofits is such a nebulous word....it varies VERY widely.

I used to run my own startup...what I called "not for profit". I made a little bit of money (which I classified as salary), but any extras got channeled back into the the particular work I was trying to do. It was a bit of a blurry line between the work I did as a "volunteer" and the work I was "paid for". For taxes etc, it was just easier to classify it as a business. I had no desire to deal with a board who would have authority to overrule me. I did have a board but their authority was limited to what I chose to give them (which was a lot - but I retained final veto). They also had no right to see finances and I kept that completely separate. It helped that I never asked people to give money, just their time. Anyway, I made peanuts at this but it was nice side hustle money as I was a SAHM.

From there, I moved into working at a university. Pay is VERY good - better than a lot in the private sector in my small city.

Unfortunately, that job dried up and I moved on to a health charity to do fundraising. Pay is OK for to work/experience necessary. Overall, the pay throughout the organization was OK with decent pay at the managerial levels. But on the lower end compared to skills. My particular position typically saw a ton of rollover...mostly used as a starting step in a career.

After I gained experience, I moved on to working for municipalities. Pay is good for what I do. That said, our local public college would pay even more for my skill set (I actually interviewed, but stepped back when I discovered the work-life balance was not to my liking). I'm happy to stay where I am for now.

Wow - I never realized so much of my career has been in nonprofts! I wouldn't be opposed to working for a private business if the right opportunity presented itself. 

monstermonster

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Re: When being mustachian screws you at work
« Reply #27 on: December 18, 2015, 01:10:14 PM »
...And this is still happening sadly. In addition to taking away our 401K in February, the budget passed by the board means that no raises will happen next year (including no 1.3% cost of living increase), and our PTO, which we used to get upfront, will now be split halfway down the year. Because of the nature of my job, I can't take any vacation the last half of the year, so I am effectively losing 10 days of PTO. Argh.

And I need to raise 25% more money this year based on the budget with no extra staff.

My SO (who is a software engineer) is putting 75% of his first 3 paychecks of the year into the 401K and will have it maxed out by February 15th. And with 75% cut, his take-home for those 3 paychecks will STILL be bigger than mine.

Sometimes I hate nonprofits. Good thing I like my job when I'm not thinking about things like benefits.
« Last Edit: December 18, 2015, 04:15:49 PM by monstermonster »

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Re: When being mustachian screws you at work
« Reply #28 on: December 18, 2015, 01:21:03 PM »
Because of the nature of my job, I can't take any vacation the last half of the year, so I am effectively losing 10 days of PTO. Argh.


This seems really unacceptable.

Could you get a better paying job and volunteer for this organization that you clearly care a lot about?

I work for a nonprofit, but make a pretty decent amount of money (I don't know my salary, but I'm close to a $40/hr equivalent salary) and we have good benefits. In turn, I spend a lot of my free time working for other causes that I care deeply about.  I'd actually love to work full time for some of those, but I like to set my own terms in the work I do, and they wouldn't pay me half as much as I make now.

monstermonster

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Re: When being mustachian screws you at work
« Reply #29 on: December 18, 2015, 04:29:05 PM »
Because of the nature of my job, I can't take any vacation the last half of the year, so I am effectively losing 10 days of PTO. Argh.


This seems really unacceptable.

Could you get a better paying job and volunteer for this organization that you clearly care a lot about?

I work for a nonprofit, but make a pretty decent amount of money (I don't know my salary, but I'm close to a $40/hr equivalent salary) and we have good benefits. In turn, I spend a lot of my free time working for other causes that I care deeply about.  I'd actually love to work full time for some of those, but I like to set my own terms in the work I do, and they wouldn't pay me half as much as I make now.

An $80K salary at a non-profit? Wow. You must work in higher ed or healthcare or NYC!

I don't think I can really do anything else than what I do now (I've been at this for a long time and don't really have transferable skills to another sector), and this is the going rate what I do (small non-profit development). I've always want to work for this organization and their mission so I can't imagine I'd prefer working anywhere else, even if I could get a job. I could join the board if I left for another job which would be cool, but I really don't know where else I could work. I don't *love* raise money for a living, so if I'm going to do it 40 hours/week, it better be for this mission. Maybe it's just the circle of nonprofit people I know (less than $2 million annual budgets), but it's a stupidly stressful industry.

And if I switch sectors, I won't be able to buy a house on a mortgage for another 3 years (not sure I actually want to do that, but want to leave the option open) - though if I get a higher-paying job, I'd try to buy a house in cash instead if I was going to.

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Re: When being mustachian screws you at work
« Reply #30 on: December 18, 2015, 05:05:25 PM »
Are they not willing to roll over the PTO to the next year? Even part of it?

I get that you love your work, but having my benefits reduced bit by bit while I work more days and get poorer thanks to inflation is not my idea of a good job. To put it in perspective, I used to make $17.40 per hour sitting at home doing semi-mindless computer work (Leapforce) in my PJs.

You're allowed to screw yourself over because you believe in what you're doing, but don't talk about it like it's your only option--it's definitely not. Own your choices :-).

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Re: When being mustachian screws you at work
« Reply #31 on: December 18, 2015, 05:35:16 PM »
Are they not willing to roll over the PTO to the next year? Even part of it?
Good point. Just 40 hours rolls over, which means I'll only lose 5 days, not 10. Still sucks but blah :(

You're allowed to screw yourself over because you believe in what you're doing, but don't talk about it like it's your only option--it's definitely not. Own your choices :-).
Point taken. I have a bit of a poverty mindset because this is the best paying job (and best benefits) I've had after 10 years in this field, so I generally feel like I don't have options. And most of my friends don't have bachelor's degrees so I feel like I'm very well off comparatively. Now that I make this income I can give generously to charity, save half my income, and have a good safety net (plus retire by 45 if I keep on keeping on).

Every job that I'm qualified for either pays less than what I make, or is working for a non-profit I can't imagine raising money for (a museum.)

I just can't imagine qualifying to do anything else except fundraise and work in social services, except running for office. But that pays either nothing at all (county positions) or $7,000/year (state legislature, which involves a 1.5hour commute each way during legislative sessions.)

If I do leave this job though, I feel some responsibility to advocate for my co-workers (who are mostly blue-collar) before I leave to fix things. If I raise enough money, we'll be able to do staff raises hopefully by the end of next year. If I raise $11,000 more, we could raise everyone's salary by CoL at least (1.3%). But I raise a lot of restricted funding most of which can't be spent on personnel even though it's our biggest expense.

Sorry, now I'm just whining. That was just a hard budget to pass through the board.

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Re: When being mustachian screws you at work
« Reply #32 on: December 18, 2015, 08:09:05 PM »
Quote
And I need to raise 25% more money this year based on the budget with no extra staff.
Hope your Board has a realistic plan for making this happen. Either that or you've got an amazing CEO/ED who loves to fundraise.

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Because of the nature of my job, I can't take any vacation the last half of the year
Since the PTO policy was changed, you absolutely can and should take vacation in the latter half of the year. Don't be a martyr and fry yourself out.

Quote
I just can't imagine qualifying to do anything else except fundraise and work in social services, except running for office.

You could always become a fundraising consultant and make good money coaching and teaching nonprofits how to raise money. You could work from home, pick your clients, set your own hours, and take as many vacation days as you want. Oh, and you could start your own retirement plan like a self-employed 401(k).

Quote
And if I switch sectors, I won't be able to buy a house on a mortgage for another 3 years
Sounds like your husband makes plenty of money, enough to quality you to qualify for a mortgage on his salary alone.

Point is, you have a ton of options, even if you're not seeing them or don't want to act on them.


monstermonster

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Re: When being mustachian screws you at work
« Reply #33 on: December 18, 2015, 08:20:22 PM »

Sounds like your husband makes plenty of money, enough to quality you to qualify for a mortgage on his salary alone.

Point is, you have a ton of options, even if you're not seeing them or don't want to act on them.
Fair, though I will say I'm not married to my SO (and it's very likely I never will be) and he already owns 3 rental units. We have very different circumstances.

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Re: When being mustachian screws you at work
« Reply #34 on: December 22, 2015, 02:04:27 PM »

An $80K salary at a non-profit? Wow. You must work in higher ed or healthcare or NYC!



I've seen you say this on these forums over and over and it simply isn't true. There are good salaries out there but you seem determined to believe that more money isn't possible. I'm a fundraiser, don't work in higher education or health care (I work in social services doing employment and housing work for immigrants & refugees, ex-offenders, people with disabilities and people with mental illness), and I'm in the Midwest - and I make $90k per year ($94k with my bonus this year). And I have a great benefits package and work 45 hours per week.

I would strongly encourage you to go look at the Association of Fundraising Professionals salary information so you can get an accurate picture of what is realistic/possible for you.

I know this may seem harsh, but all of your posts come across with a bit of a "martyr" vibe. You truly could make a change but you've painted yourself into a corner where you don't think you could do anything else. Or you don't want to believe you could. Surely you don't work for the only social services organization in your whole entire geographic area? There aren't any other organizations doing good work you could get behind? Yours is the only one doing good work?

Average length of stay for a nonprofit Director of Development in the US is 18 months. Why is that? Because there are so many freaking jobs that it is easy to just go get another one if you don't like where you are at. All my Development friends change jobs every 2-3 years in order to get better and better opportunities. And this is true across all subsectors - arts, healthcare, higher education and yes, even social services.

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Re: When being mustachian screws you at work
« Reply #35 on: December 22, 2015, 03:05:09 PM »
An $80K salary at a non-profit? Wow. You must work in higher ed or healthcare or NYC!

I've seen you say this on these forums over and over and it simply isn't true. There are good salaries out there but you seem determined to believe that more money isn't possible. I'm a fundraiser, don't work in higher education or health care (I work in social services doing employment and housing work for immigrants & refugees, ex-offenders, people with disabilities and people with mental illness), and I'm in the Midwest - and I make $90k per year ($94k with my bonus this year). And I have a great benefits package and work 45 hours per week.

I would strongly encourage you to go look at the Association of Fundraising Professionals salary information so you can get an accurate picture of what is realistic/possible for you.

I know this may seem harsh, but all of your posts come across with a bit of a "martyr" vibe. You truly could make a change but you've painted yourself into a corner where you don't think you could do anything else. Or you don't want to believe you could. Surely you don't work for the only social services organization in your whole entire geographic area? There aren't any other organizations doing good work you could get behind? Yours is the only one doing good work?

Average length of stay for a nonprofit Director of Development in the US is 18 months. Why is that? Because there are so many freaking jobs that it is easy to just go get another one if you don't like where you are at. All my Development friends change jobs every 2-3 years in order to get better and better opportunities. And this is true across all subsectors - arts, healthcare, higher education and yes, even social services.

I know this may seem harsh, but IMO any "non-profit" that can afford to pay such high salaries is misusing its donors' money and ought to be fucking paying taxes! Non-profits are supposed to exist to create social good, not as a get-rich-quick scheme for the people running them.

monstermonster

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Re: When being mustachian screws you at work
« Reply #36 on: December 22, 2015, 05:10:44 PM »

I would strongly encourage you to go look at the Association of Fundraising Professionals salary information so you can get an accurate picture of what is realistic/possible for you.
I thought about shelling out for their membership (under 30 years it's pretty inexpensive) to get that report, so I might actually do that. I do have regional surveys for development salary, which I think are more accurate/realistic, and I'm making a standard development manager wage for a nonprofit of a <$2million. I'm quite in the range not vastly undercompensated at all, higher than median (median is $17.30/hour.) I also make what most of my for-profit friends, other than those in tech, make.


I know this may seem harsh, but all of your posts come across with a bit of a "martyr" vibe. You truly could make a change but you've painted yourself into a corner where you don't think you could do anything else. Or you don't want to believe you could. Surely you don't work for the only social services organization in your whole entire geographic area? There aren't any other organizations doing good work you could get behind? Yours is the only one doing good work?
It's good to get that reality-check. I work in a co-shared office with a lot of similar non-profits and have generally worked at nonprofits with <$200K annual budgets so I'm usually stuck in a certain mode of thinking. Regarding what my nonprofit does, it's very specific so I'd give away my employer if I mentioned it, but it is truly specific (I promise.)


Average length of stay for a nonprofit Director of Development in the US is 18 months. Why is that? Because there are so many freaking jobs that it is easy to just go get another one if you don't like where you are at. All my Development friends change jobs every 2-3 years in order to get better and better opportunities.
I've always associated that with the burnout as opposed to the opportunities. Just shows a change of perspective really flips things around!


I know this may seem harsh, but IMO any "non-profit" that can afford to pay such high salaries is misusing its donors' money and ought to be fucking paying taxes! Non-profits are supposed to exist to create social good, not as a get-rich-quick scheme for the people running them.
So people that do good things don't deserve a good wage? People that spend 60-80 hours a week doing dangerous work with addicts and homeless don't deserve a reasonable wage, even if they're doing equivalent or harder work than their peers in the private sector? Lawyers that work on immigration rights law don't deserve to make $80K when they've taken a $100K paycut over corporate law? Doctors that work in rural clinic for poor children don't deserve a wage they can pay off student loans with?

You only deserve to make a market wage, clearly, if you're making the world a worse place, not if you're contributing to social good.

So, what is a salary that makes sense for someone working full-time in a nonprofit that would make you as a donor comfortable if not $80K? $15/hr? $40K? $55K?
« Last Edit: December 22, 2015, 05:14:10 PM by monstermonster »

Jack

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Re: When being mustachian screws you at work
« Reply #37 on: December 23, 2015, 08:42:15 AM »
I know this may seem harsh, but IMO any "non-profit" that can afford to pay such high salaries is misusing its donors' money and ought to be fucking paying taxes! Non-profits are supposed to exist to create social good, not as a get-rich-quick scheme for the people running them.
So people that do good things don't deserve a good wage? People that spend 60-80 hours a week doing dangerous work with addicts and homeless don't deserve a reasonable wage, even if they're doing equivalent or harder work than their peers in the private sector? Lawyers that work on immigration rights law don't deserve to make $80K when they've taken a $100K paycut over corporate law? Doctors that work in rural clinic for poor children don't deserve a wage they can pay off student loans with?

You only deserve to make a market wage, clearly, if you're making the world a worse place, not if you're contributing to social good.

So, what is a salary that makes sense for someone working full-time in a nonprofit that would make you as a donor comfortable if not $80K? $15/hr? $40K? $55K?

First of all, corporate law lawyers (and most lawyers in general) are WAY FUCKING OVERPAID. The only reason they allegedly "deserve" such high compensation is the complexity of the law, but they're the ones responsible for making it so needlessly complex in the first place. It's a damn racket! Lawyers, as a profession, should not exist at all, because all citizens have the responsibility to know the law. If it's not possible for them to have the capability to know it, then the law is wrong! So forgive me if I'm not persuaded by the comparison to the totally obscene rates other lawyers make.

Second, non-profit doctors get their loans forgiven. Are you suggesting they should get loan forgiveness and make the same gigantic salaries for-profit doctors make?

Third, $40K is a "good wage." Half of all Americans subsist on less!

Fourth, the "social good" of a non-profit is inversely proportional to the amount it spends on overhead. In other words, the more people get paid, the less social good it does. The fact that your non-profit pays higher than the median is evidence by itself that it has below-average effectiveness, or at least less effectiveness-per-dollar than ought to be possible.

monstermonster

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Re: When being mustachian screws you at work
« Reply #38 on: December 23, 2015, 08:56:10 AM »
Third, $40K is a "good wage." Half of all Americans subsist on less!
I agree with that. To note, I get paid $39,500 and it's the highest wage of my life and comfortable enough to save half my income (with no children.) I will also note that median wage is descriptive, not perscriptive. Average salary at my org is $14.50/hr. Which incidentally, isn't enough to support a family in my town with rising housing costs, and desperately needs to be raised. But I think people should be compensated in respect to their skills and training, and a career working for the social good shouldn't involve a 50% pay cut. You should be able to put food on the table on a non-profit salary. People who freak out over non-profit salaries contribute to the atmosphere where many of us get paid poverty wage to work 40-60 hours a week.


Fourth, the "social good" of a non-profit is inversely proportional to the amount it spends on overhead. In other words, the more people get paid, the less social good it does. The fact that your non-profit pays higher than the median is evidence by itself that it has below-average effectiveness, or at least less effectiveness-per-dollar than ought to be possible.
That is quite a myth. Overhead has little to no correlation to the quality and effectiveness of services provided by a nonprofit. I recommend checking out the letter put out by the Better Business Bureau charity rating program, Guidestar, and Charity Navigator, the three major "rating agencies" for non-profits.    http://overheadmyth.com/

It talks about why historically vastly undercompensated staff PLUS a refusal to fund overhead for nonprofits actually hurts effectiveness. Do you know the overhead of your electric provider? Do you know what percentage of their budget is spent on marketing, rent, and accounting? The obsession with overhead in nonprofits is a FALSE indicator of their effectiveness and dangerous, as it leads to 1) compensating people below living wage and not providing benefits like medical insurance, PTO, and 401K because it contributes to overhead 2) massive staff turnover which then increases training costs and service gaps 3) moving budgets and 990s around to recategorize things to get below the "golden" amount of 10% overhead. 4) things like the fact I have a 9-year-old computer that shuts down constantly and a chair that should probably need a liability waiver to sit in because spending money on those things contributes to "overhead"

A good book on this is Forces for Good: The Six Practices of High Impact Nonprofits which looked at 6 highly effective nonprofits and found that it was NOT overhead that indicated their effectiveness.


« Last Edit: December 23, 2015, 07:08:22 PM by monstermonster »

monstermonster

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Re: When being mustachian screws you at work
« Reply #39 on: December 23, 2015, 09:52:47 AM »
Second, non-profit doctors get their loans forgiven. Are you suggesting they should get loan forgiveness and make the same gigantic salaries for-profit doctors make?
Since it seems like you want to end the institution of lawyers entirely (which seems a completely unworkable hypothesis because it assumes that the disabled, uneducated and children in this country would be able to self-represent and provide justice for themselves), I won't use that example as I'm not here to debate the utility of lawyers.

However, you DO understand how the Federal Public Service Loan Forgiveness program works, RIGHT? You must work for 10 years in a nonprofit and you must spend those 10 years making payments on your student loans every month (120 payments, no gaps). You must be in good standing with your loans. The only loans that qualify are federal loans, and specific federal loans (not  Federal Family Education Loan or the Federal Perkins Loan.)

The average doctor has $166,750 in med school debt alone. This cannot be all put into qualifying student loans. This means even if you are making $40,000 a year (your suggested wage that would be fair for anyone working at a nonprofit, regardless of education or skill), you would still have $300 in income-based repayment to make every month on the loans that qualify PLUS loans that don't qualify. Which means paying 15% of your  take-home income each year to make no actual progress on your debts, only pay off interest. Also the loan forgiveness program is so new, very few have successfully used it and those who have tried have had a lot of trouble with working through it.

So essentially, if you're saying doctors in rural poverty clinics should make $40K a year (which would be less than they make as a RESIDENT to be clear) then only people who  have enough wealth to not take out private student loans should do that work. That's then excluding the people that actually come from those communities (because they wouldn't have the means to pay out of pocket for med school) from doing that work. There's a ton of evidence that people from rural low-income communities make the most effective medical practitioners in those communities because they foster trust among their patients and understand local customs & practices.

I'm trained as an economist, so of course I believe skills should be compensated on a scale relative to their demand, so take that bias into account. However, I abhor when people think that "nonprofit" should mean no one should get paid. Or that work in the social sector automatically be compensated below 50% of the market rate for the same work. Making $60K is not a "get rich quick" scheme for any social sector employee, any more than it is for a corporate employee who makes the same. The idea that a banker deserves $60K more than a social worker who deals with physical threats and handles the most delicate and violent members of society each day or a teacher who works with youth in danger of dropping out to help them overcome the barriers & abuse in their lives is simply offensive to me. And this is coming from someone who lived in voluntary poverty as a social worker for years and left to move into the "high hog" of Americorps wages.
« Last Edit: December 23, 2015, 03:48:20 PM by monstermonster »

Petunia 100

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Re: When being mustachian screws you at work
« Reply #40 on: December 23, 2015, 11:39:28 AM »
Maybe you could ask for the Simple IRA, but agree to contribute only $1200 per year?  That would mean a $1200 match for the employer to pay (a savings of $1200 per year for them), you would still get $1200 towards retirement from your employer, and you could save a bit more in tax-advantaged than your own IRA only.

And of course you are going to open that Simple at Vanguard, right?

monstermonster

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Re: When being mustachian screws you at work
« Reply #41 on: December 23, 2015, 11:45:50 AM »
Maybe you could ask for the Simple IRA, but agree to contribute only $1200 per year?  That would mean a $1200 match for the employer to pay (a savings of $1200 per year for them), you would still get $1200 towards retirement from your employer, and you could save a bit more in tax-advantaged than your own IRA only.

And of course you are going to open that Simple at Vanguard, right?
I like the way you're thinking but legally it doesn't work. I tried this too.

It's illegal for a company to place restrictions on the amount of an employee's salary reduction contributions, except to comply with the annual limit on salary reduction contributions ($12,500 for the Simple IRA). So that contract would be illegal.

Additionally, we are legally required to offer the Simple IRA to all employees that meet the qualifications. With matching, it's likely we will have more employees contributing, and the employer is required to match 3% in the Simple IRA, which means we'll have higher overall costs than our current 401K. A similar local nonprofit that does Simple IRA rather than 401K has 80% participation and it costs them $18,000/year in matching vs us who pays $2,400 in fees and none in matching (with 12% participation).

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Re: When being mustachian screws you at work
« Reply #42 on: January 15, 2016, 12:06:03 PM »
So today I met with our Finance Director, who has asked for my help on the research on the 401K, and I essentially ended up giving the recommendation that we should close down the 401K and move to employer payroll deductions to vanguard IRAs for most employees. The finance director and myself are the only two employees who have a chance of maxing out their IRAs and contributing to the 401k, so it makes sense. She acknowledged that this really does suck for me, and she's willing to hold off on making the switch to allow me to try to put as much aside as I can this year. I'm putting 45% of my salary away for the next couple months in the 401K, which will mean I will put away $4,000. (I'd do 100%, but I just can't quite afford the hit to my cash flow without chipping into my emergency fund).

This means I need to figure out how to do a Solo 401K or something else from a side hustle for another (up to) $14,000. I anticipate I won't make more than $5,000 from my anticipated side hustles this year. Does anyone have experience with being an independent contractor and setting aside 100% of what you make from a sidehustle? I still need to pay self-employment tax, right, even though I'll set aside 100%? Do you have to set up an LLC or a DBA instead of just filing it on your normal taxes as 1099 income? Can someone fill me in explain-it-like-you're-5 language?

feelingroovy

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Re: Advice on Solo 401Ks? [formerly: When being mustachian screws you at work]
« Reply #43 on: January 16, 2016, 10:14:47 AM »
My husband has a side bustle with a solo 401k.

My understanding:

You don't need an LLC or a DBA. You report the 1099 income on your regular 1040 schedule C. You can put 100% of schelude C bottom line into the 401k MINUS self employment tax.  So that bottom line of schedule C is after business expenses.

monstermonster

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Re: Advice on Solo 401Ks? [formerly: When being mustachian screws you at work]
« Reply #44 on: January 16, 2016, 10:19:51 AM »
My husband has a side bustle with a solo 401k.

My understanding:

You don't need an LLC or a DBA. You report the 1099 income on your regular 1040 schedule C. You can put 100% of schelude C bottom line into the 401k MINUS self employment tax.  So that bottom line of schedule C is after business expenses.

Awesome, thanks so much for the info! I found this spreadsheet which is helpful on calculating the amount you can put away.