I recently came across an article about a quirk of the new tax law that will allow a self employed individual to have a 401(k) plan with a higher contribution limit than previously. The link to the original article is:http://webreprints.djreprints.com/00000000000000000023032001.htmlI have also included a link to information on the Pioneer Investment Management web site about their Uni-K product that takes advantage of this change:http://www.pioneerfunds.com/misc/pdfs/10594-00-0801%20Uni-K%20Fact%20Sh.pdfI am planning to retire from NASA in February, 2002. My intention was to work as a contractor to NASA (part time) for three more years until my wife retires. However, with this tax law change, would I be better off setting up a small business with me as the sole employee, working as a subcontractor, rather than accept a postion as an employee of a large company that does contract work for NASA? That way I would be subject to the contribution limit described in the article, rather than the $11,000 limit that would apply to the contractor's corporate 401(k) plan.I will not really need the $ I will earn during those three years for living expenses and I would like to maximize the amount I can put into a tax deferred vehicle. This Uni-K sounds like just the ticket.What are the implications of setting up a sole proprietorship? I would appreciate any advice or insight the board can provide. Thanks. Dave Weiss
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