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Episode Summary:
As your practice grows and profits increase, one of the most powerful tax and retirement planning tools available to optometry practice owners is profit sharing within your 401(k) plan. But what exactly is profit sharing, and how can you optimize it for both you and your employees?

In this episode, Evon welcomes back Matt Ruttenberg of Life Inc. Retirement Services to break down everything optometrists need to know about profit sharing contributions. They discuss how profit sharing works, the different methods of calculating contributions, and how practice owners can use this strategy to maximize retirement savings while managing taxes.

Whether you’re new to 401(k) plans or you’re ready to level up your retirement savings strategy, this conversation will give you clarity on how to align your plan design with your goals.

What You’ll Learn in This Episode:

• What profit sharing in a 401(k) plan actually is and why it matters for practice owners
• The “three-tier wedding cake” framework of retirement plan contributions
• Different methods of profit sharing:
  • Pro Rata (the simple but costly method)
  • New Comparability (targeted, strategic contributions that benefit owners most)
• How factors like employee demographics, age, and owner wages impact profit sharing efficiency
• Why your Safe Harbor match choice (match vs. non-elective) matters when layering on profit sharing
• How profit sharing integrates with cash balance plans to supercharge retirement savings
• Key deadlines practice owners need to keep in mind before year-end

Resources & Links:

• Learn more about Matt Ruttenberg and his team: 401k.expert
• The Optometry Money Podcast Ep 111: 2024 Mid-Year Retirement Plan Updates and Deadlines Practice Owners Need to Know with Matt Ruttenberg
• The Optometry Money Podcast Ep 64: How to Invest Six Digits A Year Into Your Practice Retirement Plans with Matt Ruttenberg
• The Optometry Money Podcast Ep 63: Choosing A Retirement Plan for Your Optometry Practice with Matt Ruttenberg

Work With Us:
Thinking about working with a financial planning firm that specializes in optometry? At Optometry Wealth Advisors, we help ODs nationwide align their practice and personal finances for growth, tax efficiency, and long-term wealth.

👉 Schedule a free, no-pressure intro call here: optometrywealth.com

The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.