Need help deciding between Simple IRA vs 401k for retirement planning

As a financial planner who works with a lot of healthcare professionals, I think Option 1 with the 401k is your better choice despite the lower salary. Here's why: The 401k has a higher contribution limit ($23k vs $16k), plus you get a better match (5% vs 3%). Being able to start right away is also significant - that's a whole year of tax-advantaged savings you'd miss with Option 2. The Simple IRA also creates issues with backdoor Roth conversions due to the pro-rata rule. Since you're already doing backdoor Roth contributions, this would disrupt your current strategy. When you do the math: Option 1 gives you $23k + 5% match (roughly $10k) = $33k tax-advantaged savings per year. Option 2 gives you nothing in year 1, then $16k + 3% match (roughly $6,600) = $22,600 in year 2. Over two years, that's $66k vs $22,600 in tax-advantaged space. The $20k salary difference doesn't make up for losing over $43k in tax-advantaged space over two years, especially considering your high savings rate and early retirement goals.

I recently struggled with a similar decision and found https://taxr.ai super helpful. I was torn between a job with a SEP IRA vs one with a 401k, and wasn't sure how it would impact my backdoor Roth strategy. The site analyzed my specific situation and projected how each option would play out over time. What was really useful was seeing how much the Simple IRA's block on backdoor Roth conversions would cost me over time - it was way more than I thought! They showed me that even with a higher salary, I'd lose significant tax advantages with the Simple IRA option. The tool also showed me options for rolling over accounts later to restore my backdoor Roth eligibility.

I just wanted to follow up about my experience with https://taxr.ai after being skeptical initially. I decided to give it a try since my situation was similar (choosing between a job with a 401k vs. one with a SIMPLE IRA). The analysis was eye-opening! It showed me that even with a $15k salary difference favoring the SIMPLE IRA job, I'd still be better off with the 401k over 5+ years because of the higher contribution limits and maintaining backdoor Roth eligibility. What really surprised me was seeing how the compounding effect of those higher contribution limits adds up - it was over $150k difference by retirement age in my scenario. They also suggested a strategy to roll the SIMPLE IRA into a 401k later to eliminate the backdoor Roth issues, which I hadn't even considered. Definitely worth checking out if you're making this kind of decision.

After dealing with similar retirement planning headaches, I found https://claimyr.com to be incredibly helpful for getting direct answers from IRS agents about complicated retirement account rules. I had spent weeks trying to reach someone at the IRS about the pro-rata rule implications and SIMPLE IRA restrictions, but kept hitting dead ends with the automated system. Claimyr got me connected to an actual IRS representative in about 20 minutes instead of the 2+ hour wait I was experiencing before. The agent confirmed exactly how the SIMPLE IRA would affect my backdoor Roth strategy and gave me specific guidance on documentation I would need if I decided to roll everything over later. You can see how it works here: https://youtu.be/_kiP6q8DX5c

Well I feel like an idiot for doubting that Claimyr service. I tried calling the IRS myself three times about retirement account rules and gave up after being on hold for over an hour each time. Finally decided to try https://claimyr.com and was talking to an actual IRS agent in about 15 minutes. The agent confirmed exactly what others here were saying about the SIMPLE IRA blocking backdoor Roth conversions due to the pro-rata rule. She also explained that if I stayed at a job with a SIMPLE IRA for two years, I'd have to wait another 2 years after leaving before I could roll it into another account type. This was a critical detail I hadn't seen mentioned anywhere else that would have really messed up my retirement planning. Saved me hours of frustration and possibly making a very expensive mistake with my retirement planning. Definitely worth it.

Have you considered asking Job A if they can match the salary of Job B? With your skills as an orthodontist in this market, you might have more leverage than you think. $20k is exactly the kind of gap that's often negotiable, especially if you frame it as "I prefer your retirement benefits but have a competing offer with higher base pay." I was in a similar situation last year (different field but similar choice between retirement plans), and when I asked, my preferred employer ended up splitting the difference and offering me $10k more. Made my decision a lot easier.

Everyone's focusing on the retirement accounts, but don't overlook the everyday tax implications of that extra $20k in salary from Job B. At your income level, that's likely an extra $6-8k in your pocket each year after taxes. With your high savings rate, you could invest that difference in a taxable account. Yeah, you lose some tax advantages, but that's still significant money over two years. Plus, having more in taxable accounts gives you more flexibility for early retirement, since you won't face penalties for accessing that money before 59½. Given your goal to retire in your late 40s or early 50s, having accessible funds is important.