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  • New Attending Savings Questions

    Hello:

    I recently started to work as an Attending Physician in a University hospital. I have read White Coat Investor in the past, but the influx of paperwork and information that comes with new employment has been overwhelming. Naturally, this has raised several questions:

     

    Savings:

    - My employer offers a mandate program called Optional Retirement Program. It dictates that 6.65% of my pre-tax earnings will be kept for a Savings account with a 8.5% Employer match. This savings account appears to have no maximum cap. I was planning on saving much more for retirement. They also offer Traditional 403B and Roth 403B. Should I use either one of those for additional savings or should I do one on my own? Should I do something else?

     

     

    If you need any more information, please don't hesitate to ask.
    Thanks a lot.

  • #2


    Should I use either one of those for additional savings or should I do one on my own? Should I do something else?
    Click to expand...


    Hard to say without a plan. Do you have debt and a plan for paying it off? Short-term (next 5 years) goals? do you have appropriate amounts of term life and disability coverage (I believe you are asking about these in another post)? You don't want to tie up all extra cash flow in retirement accounts before taking a comprehensive assessment of all financial goals and how they relate. That calls for a financial plan. Might want to read Financial Guide for New Attendings and/or talk to a fee-only financial planner, and/or read The One Page Financial Plan and/or share more about your plans here.
    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

    Comment


    • #3
      Hello:

      I already have savings in a Roth IRA which I maxed out last year as well as on index funds additional to that. I don't have any debt other than a small (9,000k) educational loan (4 loans tied into 1 account, interest rate ranging from 4-6%). As you said, I am asking about term-life and disability coverage on another forum post, but yes, the plan is to get a private one ASAP.

      Comment


      • #4
        Get a private what? Plan, financial advisor or insurance policy? I would need to know a lot more to advise how much to save for retirement at this point, but you can put a lot of the pieces together by digging into this site. The information I referenced above would help you make some of these decisions.
        Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

        Comment


        • #5
          Sorry what kind of plan is this?  Is it a 457B?

          Comment


          • #6




            Sorry what kind of plan is this?  Is it a 457B?
            Click to expand...


            Wondering myself - 401a?
            Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

            Comment


            • #7




              Get a private what? Plan, financial advisor or insurance policy? I would need to know a lot more to advise how much to save for retirement at this point, but you can put a lot of the pieces together by digging into this site. The information I referenced above would help you make some of these decisions.
              Click to expand...


              Apologies, to get a private insurance/disability plan.

               







              Sorry what kind of plan is this?  Is it a 457B?
              Click to expand…


              Wondering myself – 401a?
              Click to expand...


              Which plan are you referring to?

              Comment


              • #8
                So, the ORP is this:

                 

                https://nb.fidelity.com/public/nb/ut/planoptions/plandetails?planId=82501&option=planBasics

                Comment


                • #9
                  Ah, I see. It's an alternate to the TRS Teacher Retirement System, Texas-specific. Let me take a look at it.
                  Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                  Comment


                  • #10
                    The amount of income that can be taken into consideration for your ORP (as of 2012) is $245k. The funds choices are reasonable (Fidelity) and you have a good match. Without more study, I'd say this is a pretty big benefit. As for the 403b, traditional or Roth, I'll go back to my original recommendation of a financial plan before advice.
                    Our passion is protecting clients and others from predatory advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                    Comment


                    • #11




                      The amount of income that can be taken into consideration for your ORP (as of 2012) is $245k. The funds choices are reasonable (Fidelity) and you have a good match. Without more study, I’d say this is a pretty big benefit. As for the 403b, traditional or Roth, I’ll go back to my original recommendation of a financial plan before advice.
                      Click to expand...


                      Well, I am planning on paying off the 9k loan and saving for retirement and a possible home/apartment down-payment. I already have money saved for both down-payment and retirement.  I just finished fellowship so I don't plan on changing my lifestyle. I can save around 20% for Retirement. I already have Emergency Fund setup.

                      In general, was planning on using 50% of my paycheck and the other 50% saving it between retirement, down-payment and funds I keep for upcoming trips, gifts.

                      Comment


                      • #12




                        Hello:

                        I recently started to work as an Attending Physician in a University hospital. I have read White Coat Investor in the past, but the influx of paperwork and information that comes with new employment has been overwhelming. Naturally, this has raised several questions:

                         

                        Savings:

                        – My employer offers a mandate program called Optional Retirement Program. It dictates that 6.65% of my pre-tax earnings will be kept for a Savings account with a 8.5% Employer match. This savings account appears to have no maximum cap. I was planning on saving much more for retirement. They also offer Traditional 403B and Roth 403B. Should I use either one of those for additional savings or should I do one on my own? Should I do something else?

                         

                         

                        If you need any more information, please don’t hesitate to ask.
                        Thanks a lot.
                        Click to expand...


                        Pretty funny name for a mandatory program. Big match so a big benefit. Basically, you're getting 15% toward retirement right there. For your first six months, maybe the Roth 403b, then the traditional 403b after that. And of course a personal and spousal backdoor Roth, you're spouses's employer's provided accounts and maybe an HSA. After that you're looking at an individual 401(k) if you have a side business and/or a taxable account for savings.

                        Make sure you are adequately insured and have a plan for any student loans, an eventual house purchase etc.
                        Helping those who wear the white coat get a fair shake on Wall Street since 2011

                        Comment


                        • #13







                          Hello:

                          I recently started to work as an Attending Physician in a University hospital. I have read White Coat Investor in the past, but the influx of paperwork and information that comes with new employment has been overwhelming. Naturally, this has raised several questions:

                           

                          Savings:

                          – My employer offers a mandate program called Optional Retirement Program. It dictates that 6.65% of my pre-tax earnings will be kept for a Savings account with a 8.5% Employer match. This savings account appears to have no maximum cap. I was planning on saving much more for retirement. They also offer Traditional 403B and Roth 403B. Should I use either one of those for additional savings or should I do one on my own? Should I do something else?

                           

                           

                          If you need any more information, please don’t hesitate to ask.
                          Thanks a lot.
                          Click to expand…


                          Pretty funny name for a mandatory program. Big match so a big benefit. Basically, you’re getting 15% toward retirement right there. For your first six months, maybe the Roth 403b, then the traditional 403b after that. And of course a personal and spousal backdoor Roth, you’re spouses’s employer’s provided accounts and maybe an HSA. After that you’re looking at an individual 401(k) if you have a side business and/or a taxable account for savings.

                          Make sure you are adequately insured and have a plan for any student loans, an eventual house purchase etc.
                          Click to expand...


                          It's called optional retirement plan because it's mandatory to pick a pension system with periodic contributions, OR this optional plan, at lease at my institution, which from the descriptions sounds to be the same as the OP's plan.

                          Comment


                          • #14
                            Interesting so you basically have to decide whether to participate in a defined benefit or defined contribution plan

                            http://www.thecb.state.tx.us/reports/pdf/0869.pdf

                             

                            edit: or perhaps the TRS plan isn't available to you?

                             

                            Comment


                            • #15




                              Interesting so you basically have to decide whether to participate in a defined benefit or defined contribution plan

                              http://www.thecb.state.tx.us/reports/pdf/0869.pdf

                               

                              edit: or perhaps the TRS plan isn’t available to you?

                               
                              Click to expand...


                              Yes, TRS is the default unless you choose the ORP. I chose ORP because it gives me flexibility if I move to another state or employer.

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