Solo 401(k), TSP, Employer Match and Converting from Pre-tax to Roth Questions - WCI Podcast #372

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Welcome back to the podcast. As you hear this, I am rafting. I'm in Idaho in the boondocks trying.

To negotiate my way down the middle fork of the salmon with my family and friends. So I hope all is going well.

As you listen to this.

I'm sure it will be and will have been a fun adventure. But whatever you're up to this week, I assume you're not in the boondocks. If you're listening to this, I hope it's going well for you. Thanks for dedicating your life to your profession and to your family. And if you're feeling underappreciated today, know there's somebody out there that greatly appreciates what you're doing.

I've had to see doctors lately. I hate seeing doctors, right? As much as I like you guys.

I don't want to go see you. I'd rather not spend that time doing it.

I got a nasty case of tennis.

Elbow though, so I got it injected. Not sure that's helping much, but I'm doing lots of PT and hopefully by the time you hear this it will be feeling a lot better and it won't be bothering me as I row on the middle fork of the salmon.

Hey, one of my friends, Mitra Sadhu.

Saw a need out there and this lady's awesome, right? She is just a fantastic dog and has done guest posts at White Coat Ambassadors. She spoke at the conference before and I love this.

She told me in an email recently. She said, I'm just not willing to give up on private practice despite these trying times and doing my little bit to make it a tad easier. I believe lean private practice is one viable way out of physician burnout, letting.

Us practice the way we see fit. I totally agree with her on that.

But this cool thing she started is a business, right? It's called linkmedicalspaces.com and I think it's awesome what she's done here. But this is what it does, right?

This is a business that lets you.

Rent out some of your medical office, right? So let's say you got two office locations. You're one Monday, Wednesday, Friday. You're a one Tuesday and Thursday. Well, those other days, that space is sitting unused. What if you could rent it to a different doctor? You know, maybe it's a nephrology clinic, but you could rent it to an internal medicine doc that's working part time, right?

And they can have clinic Tuesdays and.

Thursdays or whatever, Right? It's a pretty slick idea. So the service basically connects buyers and sellers, right?

If you want to rent out some.

Of your space, somebody else wants to rent your space.

This website puts you together and obviously they get paid. It's a business, right? But it's a valuable service.

So check that out.

Linkmedicalspaces.com. thank you, Mitra, for starting that business.

All right, a little bit of promotion.

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It's a date that ought to be celebrated. So happy July 1st. May you not have to go to the hospital on this day. But if you're looking for a discount and you've been waiting for one, now's your chance. Summer 20 is the code.

Okay, we got to do some follow up. I think this is really cool thing. You guys remember episode 368 with Dr. Ian Storch, right? The do guy? And I asked him, why are all the new medical schools being open DO schools? And he went and did some research. And this is what he said. Said, here's what I found out about why there have been more do schools opening than MD schools in the past 10 years. I actually have an interview coming up to discuss it with an expert. He says on his podcast.

You want to check that out?

He says one of the biggest hurdles for starting a new LCME MD school is the requirement that the maximum amount of revenue that can come from tuition is 50%. Do schools do not have this requirement. So MD schools, they have to get.

You know, no more than 50% of.

The revenue from tuition.

So if you're opening a for profit, you know, medical school that's not going.

To have a huge hospital associated with.

It, that's kind of a non starter, right? That's why they're opening DO schools instead of MD schools.

Goes on to say, the second important distinction between osteopathic and allopathic requirements was that although both required an institutional accreditor, I.e. a preexisting university with other offerings, historically, COCA itself could serve as an institutional accreditor. Those who wanted to start a standalone medical school could. So COCA is the Commission on Osteopathic College Accreditation, so they could be the institutional accreditor.

So you didn't need a separate university to be associated with if you wanted to be a standalone medical school.

He goes on to say, this is going to change as of March 1, 2020 24, as Coca will no longer serve as an institutional accreditor for those applicants that applied after the March 1, 2024 date. Those that are in the pipeline now are safe.

But it seems likely we'll see a decline in new osteopathic medical schools opening going forward.

COCA has also added other requirements. One example is that in order to ensure that there is an expansion of postgraduate medical education to support new students, COCA has instituted requirements such as the need for new schools to create GME spots for residencies that are at least 30% of its class size. Thank goodness. Thank you, COCA for doing that. This is not required by the LCME for MD schools, as I understand it.

But it was an important need which the DO community felt should be required.

Well, overall, I think this is going to make it more likely for new.

MD schools to be open and less likely for DO schools. But mostly I think this is going to mean fewer medical schools get open altogether. For better or for worse. Maybe that'll give the residency slots a chance to catch up to all the medical school slots that have been open in the last few years. I'd sure like to see the match rate go up a little bit. I worry about all these doctors who have been graduating from medical school, but not matching and having that number go up over the last decade has been pretty concerning to me. That's a tough spot to be in, and I want to see as few docs as possible in that spot.

I wish the states would do more of these.

What do they call them?

APs.

Right.

Associate physicians.

More spots for these docs that don't match whether they're trying to match next year in two years, or whether this is becoming their career. Now I'd like to see some sort of career option for those docs be more widely available.

It is available in some states as.

An associate position, but not in most states.

Okay, this podcast is all about you.

It's driven by what you want, what you need.

So let's get to some of your questions. Our first one comes From Kate hi.

Dr. Dalli, this is Kate in the Northwest. Thanks for all that you have done over the last five years to support my family's financial security. Reaching out about the changes in solo 401k administration from Vanguard, which is switching over to a census. Hoping that you might be able to update your June 2023 article on Solo 401s and give us some guidance on account choice. I'm particularly interested in accounts that are going to be easy to use for a solo entrepreneur and offer a Roth option. Thank you so much.

Okay, yeah, the landscape changed a little bit. Vanguard actually improved their solo 401k offering.

Not long ago, to the point where I think a lot of people were going there to open their solo 401ks.

The big problem with the Vanguard solo 401k was that they weren't allowing rollovers into the plan. So people that needed a rollover so.

They could do backdoor Roth IRAs need to roll over.

A SEP IRA or a Simple IRA or Traditional IRA couldn't go to Vanguard.

When Vanguard fixed that. I didn't have a lot to complain about with Vanguard's Solo 401 offering, but.

Business being what business is, they decided.

To get out of that business. Recently I wrote a blog Post it ran May 8, 2024, about a company.

Called the Census that has essentially bought.

A Vanguard small business division.

Small.

So if you didn't do anything with.

Your Vanguard Solo 401K, it became an Ascensus 401K with a few downsides, a few more fees, and different people offering the service.

When changes like this happen, there's usually.

Not a big rush that you need to do anything. You've got usually at least months to think about any changes you want to make.

And those who have stuck with the Census. I haven't heard a lot of complaints.

I've heard a few complaints about some of the changes. Most of the people just complain that now they have a few more fees to pay each year.

But the other offerings at other companies.

Aren'T like no brainers, right? They have problems.

If you go to Fidelity, there's some issues.

You go to E Trade, there's some issues. If you go to Schwab, there's some issues. Another option that might be better for.

People is to just get what I.

Call a customized Solo 401K. Now these aren't free like the one at Vanguard was. Like the one at Schwab is the one at Fidelity or E Trade. They basically charge no fees at these companies.

If you get a customized one, there are fees.

It's usually something like 100 bucks or.

500 bucks to set it up initially.

And maybe $150 a year.

So they're low. They're not all that different from what.

You'D pay to a census.

But you get dramatically better service, in my opinion. And you can get a better product. You can get all the bells and.

Whistles available on a 401k.

You can get Roth contributions, you can.

Get loans, 401k loans if you need those.

You can make mega backdoor Roth IRA contributions.

If those are right for you, they're right for Katie and I. We do that in our 401.

You can get just all the bells and whistles. You can get great investments.

You can get a brokerage window.

You can get self directed investments.

If you want to invest in some private real estate fund or something, you.

Can do all that for basically 500.

Ish dollars to set up and maybe 100 or 150 or $200 a year in fees. I think that's probably worth it. I really do. I mean, I'm as cheap as anybody out there. Don't get me wrong. I don't like spending money I don't have to spend. But I don't know that it's worth dealing with a cookie cutter plan, a Schwab or Fidelity or E Trade when you can get this for just a little bit of money.

If you're interested in the people that can offer those plans to you, some of them advertise with us, some of them don't. We just didn't make much money on this product line.

And so I've got a few companies listed there that we don't actually get reimbursed from. But if you go to the recommended page@wicconinvestor.com recommended or you go to the main site and you go on the recommended tab and you scroll down to.

Retirement accounts, you will see that we have a list of small business 401k advisors. Right?

These are for people that have employees. But below that we have a list.

Of self directed, customized, individual 401k and.

Self directed IRA providers. And there's like six of them on the list right now. I think they're all pretty darn good. And they're all super cheap.

They're not free if you want a free one. You know, we're talking about Fidelity and.

Schwab and E Trade, but I think it's probably worth spending a few dollars there.

Hope that's helpful to you. Make sure you read that post again.

That ran on May 8th on the blog. So check that out.

Okay, let's take our next question. This one's about another solo 401 question. Hi, Dr. Dali.

Thank you very much for what you're doing. I am an independent contractor, 1099er and I have a solo 401k, which I am maxing out. I also have a couple of backdoor IRAs. One for myself, one for my wife.

Which I'm also maxing out.

My question to you is, I am in the Army Reserves and would like to contribute to my tsp. Is that okay? Is that possible?

Thank you.

Have a great day.

Okay. The question is, can you have retirement accounts at separate companies more than 1 401? The answer to that is yes. All the rules for this are explained in a blog post on the website.

Okay.

That blog post is titled Multiple 401k Rules what to do with Multiple 401k Accounts. And if you search on the website, Multiple 401k, you will come upon that blog post.

I think the most recent update that was 2020, but it is completely up to date.

It's got 1300 comments on it.

All right?

And I go through all these rules.

In detail, but the bottom line is.

Yes, you can have more than one 401. You can have a solo 401 and a tsp. The two main rules to keep in mind. The first one is that you get one employee contribution. No matter how many companies you work for, no matter how many 401s you have, you get one employee contribution this year for those under 50 is $23,000.

So you only get to use that in one place.

But you can make employer contributions or after tax, employee contributions up to the maximum limit per plan.

And this year for those under 50, that limit's $69,000.

Okay, so you could make employer contributions at your Solo 401 and you could use your employee contribution as much of it as you could in the TSP.

And then get any match that they give you there as well.

Now, to make employer contributions, you know these tax deferred contributions, although soon they may be able to be Roth contributions.

Thanks to the Secure Act 2.0, you have to make a certain amount of money, right? Basically, five times what you want to contribute in there is what you have to make as a self employed person. If you don't make that much, you might want to consider making some employee after tax contributions.

You have to have a 401k that allows that, right?

There's usually a customized Solo 401k like we were talking about with the previous question, but you can do that.

So those are the two main rules.

Now there's a little quirk with 403Bs that's kind of interesting.

And 403S and 401Ks actually, 403S and.

Solo 401Ks actually share that $69,000 limit.

So if your other account is a 403 at your academic job and you.

Got a solo 401K, those actually share $169,000 limit. It's a weird quirk of 403S, but you should be aware of that.

Interestingly, we had a post recently after doing some research from a doc who actually had access to four 403s.

This one ran on the blog.

But it turns out it's not actually.

A limit on contributions you make to these 403s. You can contribute more than $23,000 if you have more than one 403. The limit is on deductions, so you can only deduct that $23,000.

So if you're trying to maximize your match and it takes more than $23,000 to maximize your match at two or.

Three or four different 403s, you can contribute more. You just won't get a tax deduction on it. And that may or may not be worth it to you. Something to look into. All right, I think we've gotten into the weeds on that enough.

Next question comes from David.

Let's take a listen.

Thank you, Dr. Daly, for everything that you do. I'm a current fellow. I have a question about 401k matching. My question is, if you leave your employer and lose your 401 matching funds because you haven't invested, do you lose out on any gains that those matching funds may have made while you were There. So, for example, if last year I received a total of $1,000 in matching funds, but over the course of the year that those funds were invested, that total has increased to 1200 through stock market gains. If I leave that in full and lose those funds, do they remove $1,000 from my account or $1,200 from my account? Thanks again.

Good question. Bad news. You lose the $1,200. You lose not only their contribution, but.

Any returns made on their contribution.

Of course, if you lost money, you lose less, right? I mean, it could be $800 you.

Lose instead of 1,000, but that's the way it works. Sorry. That money basically sits in a separate account until it's vested. And the returns on that money sits in that separate account as well.

It may show in your account, but.

The employer's keeping track of it, I assure you. I don't really like the vesting thing. I think it makes 401s confusing, makes people less likely to use 401s. We actually don't have vesting requirements in the WCI 401. The match our employees get is vested immediately. Because I don't like that. And when you can Design your own.

401, you can design it the way you like.

But I understand why employers do it, right? They're trying to put some golden handcuffs on you and make you stick around for a while.

We use non competes to do that around here.

Just kidding. We just treat people well. We do have non competes, but most of them are about to be invalidated, I think by the ftc. So we won't be able to use those for much longer. We'll have to be even nicer to people. All right, Megan's over here laughing in the corner. I don't think she's planning on quitting anytime soon. If she is, she's hiding it well.

Okay, let's take a question out of the email box. This one says I work at a community system that has about 12 hospitals plus outpatient clinics. Currently I have about $62,000 in a non governmental 457B through this employer. The plan states the earliest distribution is 180 days after the end of employment. The plan doesn't have any distribution options while I'm still employed. At least no options that apply to me. We were recently sent an all employee email saying we need to have 150 million margin improvement by the end of the year or the system won't be.

Able to meet its debt requirements.

They're expecting about 150 million in losses for the first six months of the year. Email mentioned concern that independent parties could step into direct operations.

I haven't been able to meet with.

Leadership yet to understand how attainable this.

150 million improvement is.

So of course I have a lot of concerns right now. The top concern is if the company doesn't make the needed improvement, does this mean my 457B savings is going to the creditors?

And if that is the likely outcome, what actions can I take to protect that money?

One solution I was considering is to quit, form an LLC and work as a locums at the same hospital at similar pay. My assumption is if I were an independent contractor working for the hospital system, that would not preclude me from taking the 457 distribution. Simple option of course is to work somewhere else, which I'm looking into. I also don't know if the system went bankrupt prior to 180 days after me leaving the job with the 457B get seized by the creditors.

Anyway, any thoughts on this situation would be appreciated. Wow.

Sorry you're having to deal with this. Obviously don't contribute more to the 457.

Now that you know the employer is in trouble.

Short of quitting and taking all the money out now, there isn't anything you can do now. Doing that might cost you more than you're going to gain by doing so. So I don't know that I would quit the job. Console yourself with the fact that if you end up losing your 457, you'll be the very first doctor I've ever.

Heard of this happening to.

That means it's still probably unlikely that you lose it. Yes, that money is available to your employer's creditors, but you also become one of those creditors and probably one that the court would look very favorably upon. And so my guess is that you'd still get your money even if your hospital declared bankruptcy. But good luck with your decision. Maybe get some legal advice from a health care contracts attorney in your state.

Before for Quinton for this reason.

Something to keep in mind with non governmental 457. Part of the reason it provides such great asset protection to you is that it's not your money, it's deferred compensation. The downside is it's still available to.

The creditors of your employer.

So some risk there, not a risk with governmental 457. Governmental 457Bs are better in almost every.

Way than A non governmental 457B right? When you leave you can just roll it into an Iraq, you're unlikely to lose it to a creditor.

You often have better distribution options in addition to that IRA rollover.

It's almost always better.

But there are non governmental 457B's out there.

You need to know what kind you have and evaluate that. Take that information into consideration when deciding how much money you want to put in there.

It's only $62,000, right?

I mean, this is not a lot of money. I don't think I'd quit a job over $62,000. It might take you a couple of months to get a new job and in that time you'd turn through that much money that you would have earned had you kept working. Seems a little bit extreme for $62,000.

Now if you had $620,000, maybe that sort of a strategy would actually be.

Worth the hassle and downside. But probably not for $62,000.

Okay, next question comes from William.

Back in 2021, I did a conversion from a 401 pre tax to a Roth IRA. I paid the taxes and everything at that point. So forward to 2023, I decided to do a distribution, pull all my money out of my Roth ira. Probably should not have done that and put it into a brokerage account as I was trying day trading. With that being said, I received a 1099 R for the full amount that I pulled out of my Roth IRA. However, the 1099 R only serves a distribution code of J which is non qualified distribution. So how do I figure out my basis and earnings for the 8606 form?

Thanks.

Wow.

Well, first of all, William, yes, this was a mistake.

This was a bad idea.

If you really wanted to day trade.

Why in the world would you not want to do it inside a tax protected account?

I mean, that's the ideal place to be day trading. Not that day trading is a good idea. But if you're going to day trade.

Don'T do it in a taxable account.

Do it in a Roth IRA if you can.

Right, because then all your gains you don't have to pay taxes on. I mean, presumably you're doing this because.

You'Re smoking the market and having all kinds of awesome gains in that account. But yeah, basically that entire distribution is.

Taxable plus a 10% penalty. It's really bad, right?

Whatever your marginal tax rate plus 10%.

That'S what you're losing on that money you pulled out of that Roth IRA put into a taxable brokerage account. And if your experience was like most Day traders. You then lost a big chunk of that money day trading, not to mention a whole bunch of your time and energy and emotional energy from the worry of losing money.

As far as the 8606 form, if you go to form 8606, and I usually deal with this mostly with people.

Doing backdoor Roth IRAs, not withdrawals from a Roth IRA.

But part three of form 8606 has distributions from Roth IRAs. So you're supposed to complete that part if you take a distribution from a Roth, a Roth SEP or Roth Simple. And so you got to fill that section out. So it's got like six or seven.

Lines on there, right?

The first one's your total non qualified distributions.

The 1099R tells you the whole thing.

Was a non qualified distribution. So you put that on line 19. 20 is for first time home buyer expenses. Sounds like that doesn't apply to you. 21 is just a sum. On 22 you enter your basis, but basis is, is money that's already been taxed.

So I guess what they're talking about here is money that you put in.

The Roth that is not gains while.

It'S in the Roth. So I guess that's probably the amount you converted when you went from the.

Pre tax to the Roth.

So I'd go back and look at your records for that Roth conversion and that's what I'd put on that line.

23 is another sum. You do subtraction to get that. Then you enter your basis and conversions. Okay, so it sounds like that's where.

You put your basis because yours came from a conversion. So that's where your basis would go. The amount you converted on 24, not.

22 and then 25 is just subtraction there and it tells you what the taxable amount is. But the taxable amount is going to.

Be the entire amount you pulled out of your Roth ira. And the downside is you're going to end up paying a 10% penalty on that as well.

All bad for you.

Not a good move. That's going to cost you some money. Hopefully not as much as it probably cost you to be a day trader. But who knows? Maybe you're a brilliant day trader and you made all kinds of money. But the vast majority of people who try that, that is not the case.

Okay, next question.

Hi, Jim, this is Michael from California. Your work with WCI continues to improve my financial literacy, something I'm so grateful for. My question involves the use of an inherited IRA and how we should view it. This is my wife's account of a bit more than $100,000 now from 10 plus years ago pre Secure Act. So we tentatively plan to stretch it out over her lifetime, only taking MRDs to maximize growth and minimize tax burden. Right now it's mostly in US stocks. In terms of asset allocation, would you group this together with our retirement portfolio? My wife and I are both young career physicians with a lot of good uses for cash. The mrds just don't seem to be moving the needle much for us. We're currently maxing out our retirement accounts and saving up slowly for our first home down payment in the municipal money market fund. Instead of saving a cash emergency fund as well, we thought we could maybe view this account as an emergency fund, but maybe shift the allocation into bonds or something more conservative. Another thing we're considering is using this for a home down payment in one to two years. We're both expecting to be in high tax brackets for the foreseeable future. What are your thoughts? Thanks again for all your insight.

First of all, sorry for your loss.

Right?

Anytime we're Talking about inherited IRAs, we.

Got to remember where those things come from because you lost somebody that you presumably care a lot about because they care a lot about you enough to leave you six figures. So I'm sorry to hear about that. It's been a while though for you. And the nice thing about it having been a while is that you're under the old plan for inherited IRAs, which.

Is much more generous than the new plan.

Basically the new plan, it's really complicated, but you have basically 10 years to get the money out of the inherited IRA under the old plan.

If you're a young inherited IRA, you can stretch it out for decades and enjoy that additional tax protection, that additional asset protection, those additional estate planning benefits.

Of having money in a retirement account.

And those are really valuable. They're even more valuable for people like you.

They're in a high tax bracket.

So like any retirement account, you know, it's best to use that for long term needs, right.

For retirement, you don't want to necessarily.

Be raiding your retirement accounts for short.

Term and you know, stuff you want to buy right now.

That said, the nice thing about inherited IRA is you can get to the money without paying a 10% penalty. If it's a tax deferred IRA, you got to pay taxes when you pull the money out. If it's a Roth ira, you don't.

Have to pay taxes when you pull it out. So that's really convenient.

Could use an emergency fund. Yes, you could do that. Once. Once you take the money out, you.

Can'T put it back in the inherited ira. That's not the way most emergency funds work. You can take money out and then put money back. So in that respect, it wouldn't be an ideal emergency fund.

Certainly if you're going to use it as that.

I would, yes. Invest it less aggressively. Right. Cash, short term bonds, that sort of a thing.

That said, the point of money in.

Our lives is to buy things that improve our lives or to give it to people who can buy things that improve their lives. Right.

The point isn't to amass this huge.

Sum of money and die. The richest guy in the graveyard.

This person gave you money.

I don't know if they gave you.

Any instructions on how to use the money they were giving you. Whether they said this is for your retirement, whether they said this is for your house down payment, whether they said this is for your education, whatever, or just didn't put any strings on it at all so you can do whatever.

You want with it.

Do you want to use it to buy a house?

I think that's a good use of cash.

Right.

You're going to lose those tax protection.

Asset protection benefits for the next 50 years or whatever. But there's also benefits to owning your own home and putting down a bigger down payment. It's not like you're trading it for zero sum. So I think you guys need to think and project out your numbers and have a financial plan. And I could go either way on this.

If you want to use it for.

House down payment, I don't think that's crazy. You want to leave it in there just as long as you can and reap every last dollar of tax benefit out of this inherited IRA that you can.

I don't think that's wrong either.

So I hope that's helpful to you as you make your decisions.

You guys counsel together and make sure you have a written investing plan and implement it. If you decide to use it for.

Emergency fund or for house down payment.

Or for long term investing. I think that's all reasonable.

Our quote of the day today comes from Seth Klarman who said investing is the intersection of economics and psychology.

I love that they say personal finance.

Is 90% personal and 10% finance, 90% behavioral, 10% math. People don't get into massive amounts of.

Credit card debt because they can't do math.

They know 28% interest is bad.

They do it because they got some bad financial habits. Bad financial discipline, bad financial psychology. And that's a big part of personal finance. So be sure you're working on that while you're becoming more financially literate.

Okay, let's take a question from Josh.

Hi, this is Josh from Florida, longtime listener, first time caller. My question is regarding retirement accounts. I have a Simple IRA that was initially set up and recommended by my accountant a couple years ago for several 1099 generating side gigs that allowed me to essentially contribute all of these earnings as they are near the contribution max of around 16,000. I now know of your preference for solo 401ks for these type of retirement accounts for various reasons including the backdoor.

Roth to avoid the pro rata rule.

As I've had this Simple IRA for over two years, I understand I can transfer without penalty these funds to my main gig 401. In this situation, does it make sense for me to continue to utilize the Simple IRA as I'm able to contribute more than I would in a Solo 401, even taking into account the missing out on the backdoor Roth? Or is it possible to get the best of both worlds here? Could I, before the end of each year, just transfer the balance from the simple ira into my 401k? That would allow for the backdoor Roth.

Without the pro rata rule.

I'd like to hear your thoughts, hoping to get some insight. Thank you.

Thanks for calling in with that question, Josh.

You know, I can't think really just.

About any situation where for a sole proprietor a 1099, it makes sense to.

Use a simple IRA instead of a solo 401K.

You mentioned that you can contribute more to it.

I don't think that's true at all. I'm not sure why you think that's true.

Certainly is not true with a customized solo 401k.

So plus the loss of the backdoor Roth IRA.

I think you got terrible advice from the accountant to open a Simple ira.

Yes, it's simple.

I guess that's one thing it has going for it, but it's really not that much more simple than a SEP IRA, which is better than a simple IRA. And it's only slightly more simple than a solo 401K. So I would quit messing with a simple IRA. You know, I'd roll that thing into your workplace.

401K simple.

I guess that's one thing it has going for it, but it's really not that much more simple than a SEP ira, which is better than a simple Iraq. And it's only slightly more simple than a solo 401k. So I would quit messing with a simple IRA. You know, I'd roll that thing into your workplace 401k. I'd roll it into your solo 401k that you're going to open for your 1099 income going forward. And I'd forget about this simple IRA and quit dealing with it. You know, unless I'm missing something, that.

There'S some way you can contribute more to a simple IRA than you could do a good customized solo 401 plan.

But I, I can't think of why that would be so. It might depend on exactly how much income you have in this side gig. Maybe if it's a really small amount to side gig, it actually does work out that way. But maybe you ought to just do a little more on the side gig so you get paid a little more and it makes sense to have a solo 401. I don't know. But I wouldn't mess around with that. Certainly if your contribution is that low, the benefit of being able to do a backdoor Roth IRA is much larger in comparison. So I'd get rid of that simple ira.

I just, I mean I understand there's.

A few dental practice and medical practices out there where a simple IRA is the right plan because of, you know, the employees you have and how much they want to contribute, et cetera. But I just don't think that's the case for anybody that doesn't have employees. I see no reason to know. Get us to go. Not to go get a solo 401k instead. I think we've advertised enough for solo 1ks on this solo 401ks on this particular podcast. But they're great. They're great retirement accounts and you're much.

Better off investing in them than you.

Are a taxable account.

And they're better than just about any.

Other retirement account out there. Right? I mean, who doesn't want to put.

$69,000 a year can be Roth can be tax deferred into an account that.

You totally control and that you can borrow against and you can.

Control the investments in and you can have self directed investments in.

I don't know. It's a great plan. It's a great plan and anybody who's eligible for one ought to get one.

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Keep your head up and shoulders back. You've got this. We're here to help you. See you next time on the White Coat Investor Podcast.

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