Financial Pros, I have a 401K question

[tooge]

Ok, here's the background. My business has a 401K plan available to my employees and I. I started it 15 years ago through Edward Jones with a patient of mine. He sold his EJ business to another guy who then "ran" the 401K until a couple of years ago. We hit enough money in it, that he told me that he could move us to another company that had more options for us. So, he moves it to Principal. Now, I'm getting bills from some company called McCloud and Associates that is a "qualified plan administrator", I'm pretty sure EJ guy still makes money off of us, and I can't imaging Principal does whatever they do for free. I feel like I'm getting triple fisted here. Any advice?

[TribalElder]

Don't save for tomorrow when you could enjoy today

I wonder how many people never get a chance to spend their life savings because life happens to them

[BlackHelicopters]

I’m 53 and working my last two weeks. Retiring. Already sold the practice. Have pretax and post tax retirement accounts. Lake house. Recently finished a grad degree at Mississippi State. Starting a storm chasing business.

[Rain Man]

Originally Posted by tooge

Ok, thanks. Is it possible to do a SIMPLE IRA and then make up the difference with a Roth? In other words, put the 14K I'm allowed (I"m over 50) in the SIMPLE, then put 7 or 8K into a Roth to make up what I could have put into a 401 K which is $22k for a guy over 50.

There are maximum income limits to have a Roth, so you might want to check that out.

[BlackHelicopters]

Originally Posted by Rain Man

There are maximum income limits to have a Roth, so you might want to check that out.

Roth has income limits only on deductibility . Otherwise you can fund with after tax dollars. Not the best going in, but terrific coming out after five years.

[Rain Man]

Originally Posted by theelusiveeightrop

Roth has income limits only on deductibility . Otherwise you can fund with after tax dollars. Not the best going in, but terrific coming out after five years.

I think Roths are always after-tax dollars going in. They're the opposite of a regular IRA - taxed going in, not taxed coming out.

http://www.rothira.com/what-is-a-roth-ira

[BlackHelicopters]

My mistake. You are correct.

[ChiliConCarnage]

Originally Posted by Rain Man

There are maximum income limits to have a Roth, so you might want to check that out.

It's true there are maximum income limits for contributing to a Roth IRA annually. He or his accountant are probably using the backdoor Roth conversion loophole. I'm fairly surprised it's not being closed as part of the new tax plan. They talked about 401k changes and the Senate Bill was going to force stock sales to be FIFO. Never saw anything about closing IRA loopholes though

[Buehler445]

Originally Posted by theelusiveeightrop

My mistake. You are correct.

It’s traditional IRAs. You can deduct up to $5,000. There are probably income limits on the deduction but I don’t know what they are.

[Coach]

Originally Posted by Hog's Gone Fishin

With an OP like that it's really difficult to turn this into an Alex Smith thread. Have you by any chance ever filled a cavity of his ?

Okay, way to derail it by typing out that name. There is no reason, at all, to inject that crap into this conversation.

Enough of that bullshit.

/rant

[IowaHawkeyeChief]

I see why you are confused and you should try to get more answers. Looking into this it appears Principal is a turnkey provider of retirement plans, including 401k and 401k SIMPLE and are one of the largest providers in the country. In the brief description you provided, a SIMPLE would seem to be the best option. Turnkey should mean they provide recordkeeping and investments, and the EJ guy should be working with you and your employees on your investment mix inside the plan and for each individual. This is what he/she is being compensated to do. McCloud appears to be a consultant/Third Party Administrator. On the surface this seems to be an unnecessary layered cost, especially if you do not know who they are... That should be a real concern. I would call my EJ rep and ask them to explain the relationships and cost as soon as possible. Let us know what you find out. If the EJ rep is layering services you may want to think about changing broker of record... Let us know.

[jspchief]

The obvious answer is to start asking questions. Call your EJ guy and express concerns over fees. See what he has to say.

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