Money Purchase Pension Plan with a 2nd retirement plan
My client employed by a doctor group and is covered by a money purchase pension plan. The employer contributed the maximum ($58,000 for 2021) for her. She is under 50 years old. She also has self employment income of roughly $150,000. Is she able to open and contribute to a solo 401(k) or SEP IRA in addition to the money purchase plan? If so, what are the limits? She has already filed her taxes for 2021. Is there a way to amend her taxes and make the additional contribution, or should she look to 2022 to start and fund an additional plan?
Permalink Submitted by Alan - IRA critic on Wed, 2022-05-11 23:18
It’s too late to adopt a SEP or solo K for 2021, as the due date has passed and she is not on extension. She cannot file an extension after filing the 2021 return. As for 2022, if she is not a 50% owner of the doctor group and therefore subject to a single DC limit of 61k, she could adopt another plan for the SE. Since MPPP contributions are not elective deferrals, she could make her elective deferrals with a solo K and therefore a larger total contribution than with a SEP.