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Hypothetical planning scenario: SEP IRA, Simple IRA, and a potential 401(k) plan…? Lions, tigers, and bears… Oh, my! A financial advisor who I work with quite a bit called looking for some help. He indicated that his clients [Drs. Husband & Wife] are trying to maximize their pre-tax retirement savings due to the fact that their combined income is in excess of $1M annually. The advisor has asked for some informal input. I disclaimed this one is beyond my scope. Since he understands not to rely on hypothetical musings, he is still grateful for any input. We’re trying to jump-start our brains to think this through. As such, crowd-sourcing this could help us think outside the box. J Here are the facts, as we know them: Husband Physician – ER Paid as 1099 independent contractor (no employees) SEP IRA in place, currently registered under Husabnd’s name (Sole Prop) and maxed to IRS limit annually. Wife Physician - General Surgery Owns practice (and has employees) Receives W-2 compensation from the practice (so, I am assuming tax entity is a form of corporation or files as one.) SIMPLE IRA in place for her & her employees with a 3% elective match. LLC Financial advisor recently became aware that his clients established an LLC (no other employees, likely only the husband & wife); The clients’ tax advisor (an EA, not CPA – not that it matters, just more info) is suggesting the husband continues to fund his SEP IRA, BUT through this LLC. (FYI: Per financial advisor, Husband’s SEP is currently registered under Husband’s name as a Sole Prop.) Further, EA is suggesting Husband pays Wife a salary through the LLC so she may also fund SEP IRA contributions to herself… Again, her practice currently maintains a SIMPLE IRA for the benefit of her employees and herself with a 3% elective match. This was the EA’s suggestion - NOT currently in practice. >> The advisor is concerned about the EA’s suggestion to do this. He understands that any comp paid to Husband and/or Wife by LLC is a result of actual services performed for the LLC. The advisor is committed to making sure everything is on the up and up here. If the LLC were to sponsor a 401(k) plan (and we assume the LLC will have bona fide earnings/comp to Drs. Husband & Wife), then per this IRS FAQ about SEP plans, I believe Husband might be able to continue his SEP for self-employment income and also contribute as an employee to a 401(k). However, I believe Wife cannot contribute to her SIMPLE IRA and to a 401(k) in the same year if the two plans’ sponsors are under common control, correct? Regardless, I am sure there is a whole host of potential nondiscrimination concerns to navigate RE: shared ownership w/ the LLC and her practice. The big question: What are the optimal circumstances for his clients in order for both Husband & Wife to save the most advantageous IRS maximum permitted each year? For this hypothetical, let us assume the clients are willing to make any necessary changes to meet the optimum.