Options if no 401(k)

[freeatlast]

Hubby is taking a new job where he can't join the 401(k) for a year and a half which is a bummer.  We make enough wherein the tax reduction for investing pre-tax dollars is valuable.  Is there any way around the caps on the IRA? Any thoughts on tax favorable investments for him while he waits to get into the plan?

Love this board. Thanks all!

[Mgmny]

Do you work for a company with a 401(k)?

I'm in a similar situation, and unfortunately, I don't think it's possible. Max HSA (if you have one), and just contribute the $11k to your IRA.

[Mother Fussbudget]

Do you do any consulting work on-the-side?  If so, you might qualify for a Solo / Self-employed 401k.  https://en.wikipedia.org/wiki/Solo_401(k)

[Eric]

If he has no access to a 401k (while you do), then the income limits for Traditional IRA deductibility are a lot higher.  However, it's hard for me to know how it's interpreted in this situtation, where there is a 401k, but he's not eligible yet.

https://www.irs.gov/retirement-plans/ira-deduction-limits

I'm sure you could make a good faith argument that you're not covered by a retirement plan if you're not eligible.

[Mgmny]

If he has no access to a 401k (while you do), then the income limits for Traditional IRA deductibility are a lot higher.  However, it's hard for me to know how it's interpreted in this situtation, where there is a 401k, but he's not eligible yet.

https://www.irs.gov/retirement-plans/ira-deduction-limits

I'm sure you could make a good faith argument that you're not covered by a retirement plan if you're not eligible.

I looked into this for myself a few months ago. "Retirement plan" checkbox on your W2 isn't checked unless you are eligible AT ANY POINT during the year. Sorta stupid in my situation because I'm not eligible until mid November, so I lost IRA deductibility for all of 2017, but won't have quite enough time to max 401k either. I guess it could be worse, and be eligible December 30th....

[MDM]

If he has no access to a 401k (while you do), then the income limits for Traditional IRA deductibility are a lot higher.  However, it's hard for me to know how it's interpreted in this situtation, where there is a 401k, but he's not eligible yet.

https://www.irs.gov/retirement-plans/ira-deduction-limits

I'm sure you could make a good faith argument that you're not covered by a retirement plan if you're not eligible.

I looked into this for myself a few months ago. "Retirement plan" checkbox on your W2 isn't checked unless you are eligible AT ANY POINT during the year. Sorta stupid in my situation because I'm not eligible until mid November, so I lost IRA deductibility for all of 2017, but won't have quite enough time to max 401k either. I guess it could be worse, and be eligible December 30th....

The checkbox should be checked if and only if money goes into a company-sponsored retirement account.  Being "eligible for" a 401k does not mean you are "covered by" that plan unless you or the company puts money into it.

If you are eligible for only part of the year, and you would not be eligible to deduct a tIRA if you are "covered by" a 401k, you could
- contribute large amounts to the 401k for the eligible paychecks and don't worry about deducting a tIRA, or
- don't contribute to the 401k at all that year, but use a deductible tIRA instead.

Pick the way that works better for you.

[frugaliknowit]

Your best bet is to:

1.  Put as much as possible into an IRA (both his and yours; there's something called a spousal IRA if the spouse does not work, I believe...).

2.  Stockpile cash (MM account/CD, whatever), then once 401k is available, max out.  By any amount the 401k contribution is "too great for your budget", fund your budget with the stockpile.  Do this until the stockpile is gone, then adjust the 401k to a sustainable rate.