@ohiopublic, +1 @notrichenough’s sentiments. Also, even if you manage to structure your compensation as wages – just in case, I would double check to make sure you do not run afoul of the “controlled group” rules:
Solo 401k: http://www.irs.gov/Retirement-Plans/One-Participant-401%28k%29-Plans
If you already have maxed out your FICA wages from some other source, you may be saved from the 12.4% FICA taxes, but not the 2.9% Medicare taxes.
^ I think he would only save on the employee share. IIRC, employer shares don’t combine like that - each employer has to hit the max on their own.
@notrichenough , but each employee has an annual FICA wage base maximum, no matter the source.
For 2015: it’s $118,500. Anything over that (even if withheld on wages earned from another employer) gets reported under Excess SS withheld, Line 71 of Form 1040, and the Taxpayer gets credit for it.
Thank you for the links; they sure don’t make it easy to understand the ins and outs of that solo 401K.
Arab, I’m only aware of it because I had my own business 10 years plus ago.
I have set up several businesses that are not part of a control group – and you have to look at this very carefully so thanks to @AttorneyMother. But, if they are not, I’m pretty sure that you can have retirement plans in more than one entity. My main entity has a DB Plan. Another has a 401(k).
Reflecting on post 6830-6834 - I am just hoping student loan repayment dodger Lee Siegel either has a check payment through ADT payroll, has a tax refund, or other payment form that gets garnished for his deadbeat attitude. I think he will get caught up with unless he completely goes off the grid.
Just finished the book Retirement Rx. (They really should change the title, too clinical sounding. )It is excellent. I have read about 5 books now on this topic. Very clear retirement ideas not including the financial part. I took the test and I did lack the area I thought I would- social support network that I have not worked on but will.
CC friends? Anyway @rockymtnhigh, because you mentioned John Denver in another thread, my husband is now listened to one of his DVD that I just ordered using gift card from my credit card.
Thanks for the book recommendation @rockymtnhigh - sis and I have been thinking through this process, both reading relevant books. I look forward to getting my copy that I just ordered through Amazon. I got a copy of the book for sis “When I’m Gone” - which I already owned; she is a little further in having everything in order to minimize any complications for her children. She also liked seeing my copy of “65 things to do when you retire”.
To comment on John Denver, after seeing a PBS special on him recently, I sought out his music, and listened to his CD that was kind of best hits from live shows on our long vacation drive. H commented “you didn’t buy this from one of those TV ads?” - no I bought at FYE…I also got a great CD from Celine Dion. Seeking out more music - got a Josh Groban CD and have ordered two more.
In retirement, building up the social network if you move to retirement location versus living at least part of the year where you have everything familiar…things to think about. However our CC social network goes wherever we go.
SOS, I saw the PBS special about John Denver and it reminded me when I first came to this country one of his songs was on the top 40 and it became a favorite of mine, yet I didn’t know the lyrics that well.
Do people still buy CDs today? I do not have a working CD player any more today. Even my computer does not come with a DVD/CD player when purchased – later we went to Fry’s Electronics to buy an external DVD/CD player and it is almost never used. Somehow We have rarely used our Roku as well.
When we moved, we did not know what to do with DS’s large collections of CDs. He accumulated a lot of used CDs (a small fraction of them were bought new) when he was growing up. (I think we still keep them in storage for now but I doubt he would ever use any of them. I guess eventually we would get rid of them.)
John Denver died so young, at the age of 53.
I bought a DVD, at the end I saw the number to call and donate. So it’s one of those public television tape.
Yes, John Denver died so young, this reminds us since this is a retirement thread, there is an uncertainty factor for life, nobody can plan that.
I get CDs. My ipod wouldn’t let me transfer the files back on to my computer. Both our cars have CD players and I crank it up when I am traveling solo on long trips.
He had a quite unsafe hobby though: He had a fatal plane crash on his experimental aircraft.
I saw an interview for Sarah Chang (violinist) and it seems she seems to have some not so safe hobby as well (I could not recall what it is.) and she said one’s life is unpredictable In one of her interviews, she also said she is a powerful woman - I think she refers to the fact that she has a powerful arm. Her violin is the violin that used to be owned and played by Issac Stern. (She said she purchased it.) I wonder how much she paid for that. The professional violinist has the burden is his/her life time to make a fortune in order to own a worthy violin. It seems pianist does not have such a financial burden.
^ A good quality Stradivarius or Guarneri violin can cost in the low single millions. The most expensive went for almost $16mil, although that was sold to raise funds after the tsunami in Japan, so there was a large charitable component to the price. A player of the stature of Sarah Chang is probably making $20K-$50K per performance, so she can afford it. There are maybe 20-30 (if that) violinists who can command that kind of money, so it is very difficult for more mortal musicians to get one.
A bigger problem is that these instruments have become investment vehicles, and many are snapped up by collectors and foundations who can outbid a mere musician. If you had picked one up 30 years ago, it would probably be worth 30x what you paid for it. If only…
This forces musicians to seriously look at modern instruments, and luckily for them there is a real renaissance in instrument-making happening now. It is something of a golden age. A number of contemporary makers and make instruments that stack up well against the old Italians. So don’t feel too badly for today’s violinist.
When DS needed to upgrade his violin from a 3/4-sized one to a full-sized one , we bought one from William Harris Lee (I think its shop is in downtown Chicago.) Before that, his violin came from Potters Violins (I think its shop is in Maryland.) I could not remember the makes of his other smaller sized ones. The very first one was very bad.
Of course, these are just student violins (albeit maybe somewhat “better quality” ones for students.)
His piano was an upright Kawaii. We sold it when we moved.
John Denver was an interesting and complicated individual from what I gather. We were in Aspen a few days after his untimely death and the town took it very hard- a lot of candles and flowers in the streets.
The books I read for the psychological part of retirement are –
H is totally into the financial part from day one in the 80s- so not really my thing. He did however get me started on this by getting the first one on the list and thinking i would like it, too.
I am almost thinking that moving in retirement ( we do not plan to do) would be better. It forces you to make new friends and adventure out more. We have been so incredibly busy with careers and kids and parents that relationships beyond that were limited. To add to that my best friends recently moved at retirement quite a distance away.
We do have plans though for more social interaction as that is at least a step in the right direction.
A book I got from a recommendation, “Work Less Live More the way to semi-retirement” by Bob Clyatt 2nd ed NOLO 2007.
Looking forward to absorbing info from several of these books.
I used to read a lot of retirement books in my spare time when I was younger. One of my favorite book is Die Broke, the author suggests in his book to sell everything and buy an annuity, not the advice I took, but the idea is to live well while you can, when you’re gone, you’re money is done its usefulness. I also remember one quote stands out in my mind was “Nobody at their death bed wished they had worked longer”. That’s also the philosophy I subscribe to.