Too much retirement deferral??

[Snaggletooth]

I have tried to research the effect of multiple plans, but there are so many products it is difficult for me to understand what will work and what won't.

Married couple, young and with huge incomes. Guy has W-2 for $200,000, wife has $60K in self-employment income.
Guy already has put the $18,000 income in his 401k plan at work. Reference is made in TTB to an "overall limit", which might be applicable to each spouse, or may be applicable to the joint return in total.

Wife has an old IRA which she hasn't touched in 3-4 years. She can start an SEP with 25% of her net income, apparently. Or she can start a self-employed SIMPLE with up to $12,500 (and with no employees, there are no problems with having to match).

If she starts a SIMPLE with $12,500, then the combined deferral of both husband and wife would be $30,500. Have they exceeded some sort of "overall limit"? I don't see where they have, but thought I would ask the forum.

Thanks. Ron Jordan

[Lion]

Limits are per tax payer.

SIMPLE plans must be opened, not funded, by 1 October of the tax year. So, it's too late to fund a SIMPLE unless it already exists. If she is contributing to an existing SIMPLE, she also can match 3%.

A SEP can be opened and funded up to the filing date of the return, including extensions.

She can contribute to a Roth through 18 April.

Husband may be able to make nondeductible contributions to an IRA as well.

Are they trying to put away as much as possible? She might want to work with a retirement adviser to explore solo 401(k)s and qualified plans. Or, hire her husband so her company can contribute to him as well.

[Burke]

Also, keep in mind that - if I am not mistaken - funding the SIMPLE plan is mandatory each year. The SEP is not.

[Lion]

I think matching is mandatory with a SEP with a few exceptions. With a SIMPLE, the company doesn't have to match 3% any employee who does not contribute or can chose to contribute 2% to all employees.

[Snaggletooth]

Thanks to All

The details are all in TTB if I had sense enough to read far enough. Thanks to Burke and Lion. By the way, for the SEP it is not mandatory to fund every year.