401k plans for doctors

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401k Plans for Doctors

All business owners need to protect their assets. However, for occupations where there is a significantly higher risk of litigation, one needs to be particularly cautious. Small to medium medical practices can benefit by deferring some of their income into a qualified retirement plan, such as a 401k.

Money that is sheltered in this manner is protected from nearly all judgments involving creditors. 401k balances generally cannot be taken from you to satisfy a judgment against you.

Tax benefits of physician 401k plans

Money that is contributed to a qualified retirement plan is not subjected to state or federal taxes. While the Internal Revenue Service caps the amount that can be contributed to your 401k each year, that amount is always growing.

In 2014, individual contributions are limited to $17,500, plus an additional $5,500 for those that are over 50 years of age. Additionally, as a business owner, you can implement a matching or safe harbor program, which can add an additional $7,800 in 2014.

Though it isn’t typically recommended, it is worth mentioning that in leaner years, you may borrow 50% of the vested account balance or $50,000, whichever is less.

Human Resources, Inc. can help you get started

There are many different kinds of retirement plans to choose from and it might be daunting to figure out which one is the best for your specific needs. For the moment, a 401k allows more tax-deferred contributions than an IRA. Financial institutions offer retirement plans with many different mutual fund options in which to invest.

Contact the experts at Human Resources, Inc. to assist in getting your investment and savings vehicle going.

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