Author Topic: DW gets a Morgan Stanley SIMPLE IRA  (Read 1320 times)

zephyr911

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DW gets a Morgan Stanley SIMPLE IRA
« on: September 02, 2015, 02:07:40 PM »
DW is wrapping up her first year at her current job and will be eligible soon for the above plan. Company matches up to 3%*. Obviously that's a good hard minimum, though I'm encouraging her to go at least 10x that. Our finances are mostly separate and she grosses a little under $40K so "max" probably seems impossible to her, but I want to do whatever I can. I do have the option of taking over one or more bills that she's been paying.

She is a new U.S. resident and content to let me guide her investing, so I need to get smarter on SIMPLE IRA in general (easy enough with this intarwebz thing) and this plan in particular (have requested some literature). I gather MS is known for old-school high costs in general, but am not sure what else to watch out for. Any MS-specific insights?

*I'm surprised they match anything - it's a small firm whose owner is 70+ and squeezing it for all it's worth to try to retire while still being an insane spendypants clown... don't get me started... oops, I started

johnny847

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Re: DW gets a Morgan Stanley SIMPLE IRA
« Reply #1 on: September 02, 2015, 02:28:27 PM »
DW is wrapping up her first year at her current job and will be eligible soon for the above plan. Company matches up to 3%*. Obviously that's a good hard minimum, though I'm encouraging her to go at least 10x that. Our finances are mostly separate and she grosses a little under $40K so "max" probably seems impossible to her, but I want to do whatever I can. I do have the option of taking over one or more bills that she's been paying.

She is a new U.S. resident and content to let me guide her investing, so I need to get smarter on SIMPLE IRA in general (easy enough with this intarwebz thing) and this plan in particular (have requested some literature). I gather MS is known for old-school high costs in general, but am not sure what else to watch out for. Any MS-specific insights?

*I'm surprised they match anything - it's a small firm whose owner is 70+ and squeezing it for all it's worth to try to retire while still being an insane spendypants clown... don't get me started... oops, I started

The fact that they match 3% is not surprising. The IRS says an employer providing a SIMPLE IRA must provide a match with one of the two following methods
Quote
Employer contributions. The employer must annually choose one of the contribution methods below. The employer must tell employees during the election period which method will be used for the following year:

    2% nonelective contribution - 2% of each eligible employee’s compensation regardless of whether or how much the employee deferred, or
    3% matching contribution - match of employee’s elective deferrals on a dollar-for-dollar basis up to 3% of the employee's compensation.
        May reduce the 3% limit to a lower percentage, but in any event, not lower than 1%. May not lower the 3% limit for more than 2 calendar years out of the 5-year period ending with the calendar year the reduction is effective.

I'd take over one of her bills if you're comfortable with that so she can contribute more.

dandarc

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Re: DW gets a Morgan Stanley SIMPLE IRA
« Reply #2 on: September 02, 2015, 02:35:53 PM »
Also - the max on a SIMPLE is $12,500, so that may be more attainable than 18K would be for a 401K.

zephyr911

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Re: DW gets a Morgan Stanley SIMPLE IRA
« Reply #3 on: September 02, 2015, 02:45:11 PM »
Also - the max on a SIMPLE is $12,500, so that may be more attainable than 18K would be for a 401K.
Ah, hadn't found that one yet and was assuming same limit. We should be able to do that next year easily.