The 401(k) rules have changed. Has your retirement plan?

If your practice has been using the same retirement plan for years simply because “it works,” you may be leaving valuable planning opportunities on the table.

On this episode of 20/20 Money: The Business of Optometry, I’m joined by Jared Porter, co-founder of 401GO, for a practical conversation about how much the qualified retirement plan landscape has changed—and why optometric practice owners should periodically reevaluate whether their current plan still fits their business.

We discuss why SIMPLE IRAs may no longer be as “simple” or advantageous as many owners assume, how technology has reduced much of the administrative burden historically associated with 401(k) plans, and why payroll integration should be one of the most important considerations when evaluating a provider.

We also unpack some of the planning opportunities created by recent retirement-plan legislation, including startup and auto-enrollment tax credits, increased contribution opportunities, plan-design flexibility, and the ability to use profit-sharing contributions as part of a broader tax and cash-flow strategy.

Jared and I also dig into an increasingly popular strategy: the mega backdoor Roth.

While it can be valuable in the right circumstances, we explain why after-tax contributions aren’t automatically available—or advantageous—for every practice owner and how required nondiscrimination testing can quickly change the math.

This episode isn’t about convincing every practice owner that they need a 401(k). It’s about understanding the options available today so you can make an educated and informed decision about whether your current retirement plan is still the right tool for your practice, your employees, and your own financial independence.

Some of the topics we cover include:

1. Why SIMPLE IRAs can become limiting as a practice grows
2. How modern 401(k)s differ from the plans many owners remember from years ago
3. Payroll integration and what “360-degree integration” actually means
4. Auto-enrollment requirements and recent retirement-plan legislation
5. Tax credits that may offset the cost of establishing and operating a plan
6. Matching versus safe-harbor non-elective contributions
7. Using profit sharing as part of a practice owner’s tax strategy
8. Why plan design should begin with the end in mind
9. Roth 401(k)s, after-tax contributions, and the mega backdoor Roth
10. The testing requirements that can derail an after-tax contribution strategy

NBS (Next Best Step): Pull out the details of your current retirement plan and ask your advisor to evaluate it based on today’s rules—not the assumptions that were true when the plan was originally established. Specifically, review your contribution limits, employer contribution structure, payroll integration, investment flexibility, administrative costs, available tax credits, and whether profit sharing could improve your overall tax and retirement strategy.

Have a podcast-related question? Contact our team here!

Resources:

401GO

Link: 5 reasons why I hate the SIMPLE IRA

Book a Triage call with Adam

Download the Practice Owner’s Financial Toolkit

20/20 Money Ultimate Financial Success Masterclass

OD Mastermind Interest Form

Check out Adam’s book: How to Buy an Optometry Practice

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For past episodes of 20/20 Money with full companion show notes, please check out our episode archive here!