MOAA Tricare Supplement Insurance

[robav8r]

Have an opportunity to be a 1099 employee and will have to provide for my own everything if I take the job. Already have Tricare Retiree Select but would need a supplement to that plus a vision and dental plan. I hear the new BENFEDS Dental Plan is better than the old Delta Dental plan for retirees. Curious about your thoughts on the MOAA option and any other tips for being a 1099 employee and having to take care of the taxes, investment and health insurance stuff yourself. Thanks !

 

[TimeBomb]

The 1099 route can be daunting at first, but there are a few advantages.

A good accountant is critical, since your tax situation has the potential to be a complex mess. Of course you'll be responsible for paying your taxes since nothing will be withheld from your pay. Budgeting for quarterly money dumps to the IRS can really painful. Use the accountant to keep up on your tax liability if you don't work consistent hours, so you keep from overpaying or underpaying as the year goes on. Maintain detailed records, especially of any expenses.

A really sharp financial advisor is also key. Be sure to set up a SEP as a retirement adjunct for you. You can contribute much more to that than you can into a conventional IRA. Depending on your situation, you may be able to list your spouse as an employee of yours, and set up a SEP for her as well, moving money out of your income line. If that isn't feasible, you can still contribute to a typical IRA plan.

Good luck!

V/R

 

[robav8r]

The 1099 route can be daunting at first, but there are a few advantages.

A good accountant is critical, since your tax situation has the potential to be a complex mess. Of course you'll be responsible for paying your taxes since nothing will be withheld from your pay. Budgeting for quarterly money dumps to the IRS can really painful. Use the accountant to keep up on your tax liability if you don't work consistent hours, so you keep from overpaying or underpaying as the year goes on. Maintain detailed records, especially of any expenses.

A really sharp financial advisor is also key. Be sure to set up a SEP as a retirement adjunct for you. You can contribute much more to that than you can into a conventional IRA. Depending on your situation, you may be able to list your spouse as an employee of yours, and set up a SEP for her as well, moving money out of your income line. If that isn't feasible, you can still contribute to a typical IRA plan.

Good luck!

V/R

Thanks ! Been looking at the benefits of an individual 401K as well - any preference to one over the other? I would stay with the Roth option for the 401K. I know my hours will be constant, so I was planning on just dumping a set % of each paycheck into a seperate account for tax purposes. Sounds like MOAA offers all the Tricare supplement plans I would need minus dental - will probably sign up for the new Tricare Dental program. Thanks again !

 

[TimeBomb]

Our financial advisor set up the SEP with his firm as custodian. It's essentially a 401k that you fund and "manage" (https://www.irs.gov/retirement-plans/establishing-a-sep). I think you have to set it up as a traditional IRA since it acts like a 401k plan. You can choose any mix of investments you want to invest in. The max annual contribution is 18.6% of your income, which I suspect will come out to more than the $5500/yr limit on a regular IRA.

We've signed up for dental coverage through BENFEDS as well. The higher end coverages worked best for us due to who was in the network. We won't be using the orthodontic benefit, but no big deal. We didn't sign up for vision coverage. We've done ok with TRICARE Prime, and no supplemental. There is a bit of an oppressive co-pay now, but it has been cheaper over the past few years than getting a supplemental policy.

Don't forget to look into disability insurance. If you're not working, you're not getting paid! Depending on your lifestyle and expenses, that military retirement pay might not be enough if you go med down.

V/R