Author Topic: New Job - Retirement fund HELP  (Read 1441 times)

Hayden Frys Mustache

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New Job - Retirement fund HELP
« on: June 15, 2015, 05:44:29 PM »
Fellow Mustachians,

I've been offered a new job as executive director of a small business association, including about a 25% increase in total compensation. My current employer (also a small association) offered a SEP plan and contributed 15% to my plan on top of gross income. My new offer includes only a $2,000 "self-directed" retirement contribution. I called the retiring executive director, and she said there's nothing formal set up in terms of a tax-advantaged retirement plan. Presumably, since I'm the boss, I could structure the payroll and benefits any way I wanted with board approval, assuming it adds up to the same benefit package as they offered. I want to get to at least 25% into a 401k, SEP, other tax-advantaged vehicle? Thoughts??

Tjat

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Re: New Job - Retirement fund HELP
« Reply #1 on: June 15, 2015, 08:03:07 PM »
How formal is the association? Is it possible for you to classify yourself as a consultant or independent contractor so you can then open a solo 401k? If so, your contribution limit would be the employee 401k limit (18K) + 25% of your salary.

Hayden Frys Mustache

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Re: New Job - Retirement fund HELP
« Reply #2 on: June 16, 2015, 07:14:18 AM »
I like that suggestion - they are formal with an office location and two employees, though there are other similar sized association who hire out. Are there any negative tax implications to being a consultant?

forummm

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Re: New Job - Retirement fund HELP
« Reply #3 on: June 16, 2015, 07:40:02 AM »
I like that suggestion - they are formal with an office location and two employees, though there are other similar sized association who hire out. Are there any negative tax implications to being a consultant?

You have to pay both the employee and employer side of FICA. It's called self employment tax. 7.65%.