Getting married - what do I do for retirement?

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comptalk

Getting married - what do I do for retirement?

Post by comptalk »

I run a small business, so we talked, and we agreed it is best to file married, filing separately. I make around 100k per year, she makes around the same. I contribute to my solo 401k around 40k a year. So what do I do with the retirement contributions after I am married? We're getting married in March 2013.

Suffice to say, I'm concerned.
livesoft
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Re: Getting married - what do I do for retirement?

Post by livesoft »

You keep making those contributions, so I don't really understand your concerns and question. Since she is working, she can do the same. The only thing you need to do is change the beneficiary designation on your retirement plans.

I am not an expert, but filing separately would never benefit our situation, so what specifically makes you all want to do that?

And to help save on taxes, you might read the "$200,000 income" thread which has lots of actionable items on how to minimize your taxes: http://www.bogleheads.org/forum/viewtopic.php?t=79510
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Cut-Throat
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Re: Getting married - what do I do for retirement?

Post by Cut-Throat »

comptalk wrote:I run a small business, so we talked, and we agreed it is best to file married, filing separately. I make around 100k per year, she makes around the same. I contribute to my solo 401k around 40k a year. So what do I do with the retirement contributions after I am married? We're getting married in March 2013.

Suffice to say, I'm concerned.
This seems more like a relationship question , than an investing question.
I sense a bit of 'My Money, Her Money' in these statements. Are you sure you're committed to Marriage?
Have you had the Money Talk? Do you both feel the same way about money? Goals etc.
stonerolled
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Re: Getting married - what do I do for retirement?

Post by stonerolled »

How does one put 40k a year in a 401k?
It seems the maximum for those 50+ is only $22,500.
Topic Author
comptalk

Re: Getting married - what do I do for retirement?

Post by comptalk »

Has nothing to do with that. Since I run a business, I feel it is best doing married filing separately. However, it seems, they really bang you in retirement savings when you do this. There has to be options available.
Johm221122
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Re: Getting married - what do I do for retirement?

Post by Johm221122 »

comptalk wrote:Has nothing to do with that. Since I run a business, I feel it is best doing married filing separately. However, it seems, they really bang you in retirement savings when you do this. There has to be options available.
How do they bang you?
John
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LadyGeek
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Re: Getting married - what do I do for retirement?

Post by LadyGeek »

stonerolled wrote:How does one put 40k a year in a 401k?
It seems the maximum for those 50+ is only $22,500.
Welcome! The OP is discussing a Solo 401(k): Solo 401k plan (Different than an employer's 401(k) plan)

The limit is a combination of the employee salary deferral and employer profit sharing contributions.
Wiki wrote:In 2012 the combined employee and employer maximum contribution limit is $50,000 or $55,500 if the employee is age 50 or older.
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Topic Author
comptalk

Re: Getting married - what do I do for retirement?

Post by comptalk »

With profit sharing and deferred salary, you get to 40k.

So a solo 401k does not have to be concerned about the married, filing separately restrictions? Is there an IRS publication on this?
sscritic
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Re: Getting married - what do I do for retirement?

Post by sscritic »

40k, 50k, what's the difference?
(d) Cost-of-living adjustments
(1) In general
The Secretary shall adjust annually—
...
(C) the $40,000 amount in subsection (c)(1)(A),
for increases in the cost-of-living in accordance with regulations prescribed by the Secretary.
...
For purposes of paragraph (2)—
...
(D) $40,000 amount
The base period taken into account for purposes of paragraph (1)(C) is the calendar quarter beginning July 1, 2001.
You can live in 2001 or 2012. :)
stonerolled
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Re: Getting married - what do I do for retirement?

Post by stonerolled »

LadyGeek wrote:
stonerolled wrote:How does one put 40k a year in a 401k?
It seems the maximum for those 50+ is only $22,500.
Welcome! The OP is discussing a Solo 401(k): Solo 401k plan (Different than an employer's 401(k) plan)

The limit is a combination of the employee salary deferral and employer profit sharing contributions.
Wiki wrote:In 2012 the combined employee and employer maximum contribution limit is $50,000 or $55,500 if the employee is age 50 or older.
thanks for the welcome and the answer...
Topic Author
comptalk

Re: Getting married - what do I do for retirement?

Post by comptalk »

sscritic wrote:40k, 50k, what's the difference?

You can live in 2001 or 2012. :)
I have no idea of what you are talking about.
Default User BR
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Re: Getting married - what do I do for retirement?

Post by Default User BR »

comptalk wrote:
sscritic wrote:40k, 50k, what's the difference?
You can live in 2001 or 2012. :)
I have no idea of what you are talking about.
The current per-plan limit is 50k, not 40k as was originally in the legislation.


Brian
sscritic
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Re: Getting married - what do I do for retirement?

Post by sscritic »

comptalk wrote:
sscritic wrote:40k, 50k, what's the difference?

You can live in 2001 or 2012. :)
I have no idea of what you are talking about.
I thought I explained it (or rather the law did). There are CPI adjustments. $40k was the limit in 2001; $50k is the limit in 2012.
Topic Author
comptalk

Re: Getting married - what do I do for retirement?

Post by comptalk »

Basing it on my salary the max I can place per year in the solo 401k is around 40k.
tj
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Re: Getting married - what do I do for retirement?

Post by tj »

comptalk wrote:With profit sharing and deferred salary, you get to 40k.

So a solo 401k does not have to be concerned about the married, filing separately restrictions? Is there an IRS publication on this?

Why would the tax filing status change one's eligility for a solo 401k? That seems odd to me.
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Cut-Throat
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Re: Getting married - what do I do for retirement?

Post by Cut-Throat »

I am also confused why you want to file Married filing separately.

It seems like you would get a better deal filing jointly.
stan1
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Re: Getting married - what do I do for retirement?

Post by stan1 »

Cut-Throat wrote:I am also confused why you want to file Married filing separately.

It seems like you would get a better deal filing jointly.
I'm also confused about that. Filing separately often isn't going to do much to help you or her in the legal system (liability, divorce).
A pre-nup, liability insurance, and the governance structure of your business (e.g. LLC) are going to give you better legal protection.
I suppose it would help her to file separately if you are planning to file a return that under-reports your income (especially if she knows you are doing so).

Gotta run the numbers before deciding what to do.
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Re: Getting married - what do I do for retirement?

Post by LadyGeek »

stan1 has a good point. Here's the background info: Asset protection (Have her read the article as well... :) )
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Topic Author
comptalk

Re: Getting married - what do I do for retirement?

Post by comptalk »

stan1 wrote:
Cut-Throat wrote: if you are planning to file a return that under-reports your income (especially if she knows you are doing so).
Not even sure why you would even take that into consideration. I do not mess with the IRS. EVER!!!
yahoo
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Re: Getting married - what do I do for retirement?

Post by yahoo »

I would have a local CPA look at your situation before deciding to file separately.
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Cut-Throat
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Re: Getting married - what do I do for retirement?

Post by Cut-Throat »

comptalk wrote:
stan1 wrote:
Cut-Throat wrote: if you are planning to file a return that under-reports your income (especially if she knows you are doing so).
Not even sure why you would even take that into consideration. I do not mess with the IRS. EVER!!!
Well, it was not me that said it, so I'd clean up your mis quote...
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