First of all I will introduce myself as a 3rd year resident getting ready to graduate in EM. That being said I'd selfishly like to create a tutorial of things to do in and around residency graduation date. Setting up retirement accounts, disability/life insurance, 529s, HSAs etc.
Clearly some of these items are personal decisions and there is a great deal of variability of options for graduating residents and the jobs they take. However, I do think collectively this forum could provide a concise resource list or tutorial for those going forward.
A little bit of my situation as there are some details that will surely be applicable.
Age 29, Married with a small child
Residency Income - ~50k + moonlighting which roughly 20k for 2015.
Post Residency Income - ~350-400k, 1099 IC job
Debt:
25k in family loans 0% interest
30k in federal student loans at 6.8% (currently doing income base repayment/pay as you earn, so no accurring interest at this time)
75k Mortgage (Live in very affordable low cost city and have owned house for 7 years, bought starting med school)
No CC/Car debt or payments
Investments:
5k in taxable account currently
No IRA/401k etc at this point. Clearly could have should have contributed along the way but basically decided to pay for most of medical school on my own instead thus this minimal debt.
Cash ~ 20k Emergency/Moving Fund
Insurance
Basic disability/life coverage through residency (under insured currently I know)
Post Residency Job - So my post residency job is an IC job with the expected salary as above in Chicago, which will be a huge step up in cost of living etc. We are planning to rent for the first year in Chicago to make sure we like it and the job etc.
So that all being said I'd like to create a post-residency/pre-graduation check list especially now that we are in the fiscal year of graduation.
1) Establish Solo 401k, my current plan is to establish a Solo 401k through Schwab as I already have existing accounts there at this time. (planning max 53k contribution). This is obviously different for W2 employees
2) Establish IRA Account in which I can do a backdoor Roth conversion (Not sure best company/broker for this)
3) Life Insurance - Obviously several options listed through the site. Roughly planning to do 3m stagged with a 2m 30year and 1m 20 year, could possibily do less?
4) Own Occupation Disability Insurance - Plan to use one of the retailers through this site, have not looked into greatly yet.
5) Personal Health Insurance/HSA - Likely not going to establish a high deductible plan given an expected surgery or 2 in the coming years and possibility of a 2nd child as well.
6) 529 Plan - Is this sometime we as higher income physician should all be using?
7) Establish Living Will
8) Make decision regarding Financial Advisor or doing it yourself. I will likely do it myself at this point.
This is the quick list off the top of my head that I have, what else am I missing?
As far as my personal plans some of which are interwoven here, roughly my plan with my ~350k salary is save 100k/year, plan tax burden of ~100-120k and live on ~100k. As far as tax sheltering my options are basically 53k in 401k plus roth IRA conversion and possibily 529/HSA. Any additional thoughts here or something glaringly wrong/missing? I figure if I save 100k for 10 years I will be in great shape by the time I'm 40 with >1mil in retirement/savings.
Clearly some of these items are personal decisions and there is a great deal of variability of options for graduating residents and the jobs they take. However, I do think collectively this forum could provide a concise resource list or tutorial for those going forward.
A little bit of my situation as there are some details that will surely be applicable.
Age 29, Married with a small child
Residency Income - ~50k + moonlighting which roughly 20k for 2015.
Post Residency Income - ~350-400k, 1099 IC job
Debt:
25k in family loans 0% interest
30k in federal student loans at 6.8% (currently doing income base repayment/pay as you earn, so no accurring interest at this time)
75k Mortgage (Live in very affordable low cost city and have owned house for 7 years, bought starting med school)
No CC/Car debt or payments
Investments:
5k in taxable account currently
No IRA/401k etc at this point. Clearly could have should have contributed along the way but basically decided to pay for most of medical school on my own instead thus this minimal debt.
Cash ~ 20k Emergency/Moving Fund
Insurance
Basic disability/life coverage through residency (under insured currently I know)
Post Residency Job - So my post residency job is an IC job with the expected salary as above in Chicago, which will be a huge step up in cost of living etc. We are planning to rent for the first year in Chicago to make sure we like it and the job etc.
So that all being said I'd like to create a post-residency/pre-graduation check list especially now that we are in the fiscal year of graduation.
1) Establish Solo 401k, my current plan is to establish a Solo 401k through Schwab as I already have existing accounts there at this time. (planning max 53k contribution). This is obviously different for W2 employees
2) Establish IRA Account in which I can do a backdoor Roth conversion (Not sure best company/broker for this)
3) Life Insurance - Obviously several options listed through the site. Roughly planning to do 3m stagged with a 2m 30year and 1m 20 year, could possibily do less?
4) Own Occupation Disability Insurance - Plan to use one of the retailers through this site, have not looked into greatly yet.
5) Personal Health Insurance/HSA - Likely not going to establish a high deductible plan given an expected surgery or 2 in the coming years and possibility of a 2nd child as well.
6) 529 Plan - Is this sometime we as higher income physician should all be using?
7) Establish Living Will
8) Make decision regarding Financial Advisor or doing it yourself. I will likely do it myself at this point.
This is the quick list off the top of my head that I have, what else am I missing?
As far as my personal plans some of which are interwoven here, roughly my plan with my ~350k salary is save 100k/year, plan tax burden of ~100-120k and live on ~100k. As far as tax sheltering my options are basically 53k in 401k plus roth IRA conversion and possibily 529/HSA. Any additional thoughts here or something glaringly wrong/missing? I figure if I save 100k for 10 years I will be in great shape by the time I'm 40 with >1mil in retirement/savings.
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