To fill the gap, I'll probably contribute the balance to my personally owned company's individual 401k plan.
This has several advantages and disadvantages:
Disadvantages:
- I may have to pay payroll tax on the salary deferal to my individual 401k - estimate about $1,200 - money that I wouldn't have to pay (or at least as much) through my employer's plan.
- I have to move money around to be able to do it.
- Yet another end of year financial activity competing with holiday time, etc....
Advantages:
- I'll have $8k or so not participating in the ridiculous retirement plan available at Big Company.
- The $8k will have a very large variety of investments available - especially low cost index funds.
- I'll have better financial reporting for the money invested outside of my company plan - including better integration with Quicken.
Anyone have any idea if a small C corp needs to make payroll tax contributions if 100% of the salary earned by the employer is deferred into an individual 401k?
Regards, makingourway
3 comments:
Is this a SIMPLE 401k or a Solo 401k? I assume a Solo one.
See http://invest-faq.com/articles/ret-plan-401k-solo.html or http://www.investsafe.com/financing4.html
I somehow didn't know about Solo 401k (or Individual 401k,etc) - Interesting
It's a solo 401k aka individual 401k - depending upon the vendor. My corp that I own has individual 401ks for my wife and myself.
My new employer provides me with a traditional 401k.
regards,
makingourway
owtobahn - I checked out the links - they were great and very helpful. Certainly looks like I'll have to pay the FICA for my salary deferal component. Oh well. That's 15% to the government.
invest-faq looks particularly interesting as well.
Regards,
makingourway
Post a Comment