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  • Longtime reader, first time poster. I know this is an old post, but there are a lot of TPMG folks here so I'm hoping to get some advice from you all. I read through all 10 pages of this thread and between the HR docs and here, I think I have a pretty decent grasp of all 3 plans. What I don't understand though is what order should we be investing in to make sure we're using the appropriate buckets correctly. A little background info:

    -spouse is TPMG doc, 5 years in (partner) making 350k+
    -me: stay at home parent
    -mortgage $1m (yay norcal), 3%
    -both our student loans total 450k, 3%

    Living in the Bay Area and having kids during residency, we obviously accumulated quite a bit of debt early on. We haven't contributed to plan 3 at all because of constantly paying down all that extra debt. Our only real investment aside from Plans 1-2 has been the house (value risen 100k).

    1) Should we be contributing to retirement accounts or just keep attacking the debt? On one hand, I know there are tax benefits to contributing, but that would be at the expense of having all that debt even longer. I am still leaning towards contributing though.

    2a) If we contribute, what order should we start in before going to the next bucket? Fidelity website gives 3 options: pre-tax, roth, after-tax. What about 529? We can't max everything out because of the debt load.
    2b) I am still trying to understand the difference between backdoor and mega backdoor conversions and how these would tie into 2a above.

    3) Where do accounts in my name fall into this since I have no income? Should we use spouse's salary to contribute and fill space under my name? IRA? Taxed brokerage account?
    Last edited by KaiserMed; 03-18-2020, 01:31 PM.

    Comment


    • I just signed on with TPMG.

      I have a question regarding the forgivable loan. It and the interest are forgiven in increments at year 5-7. In the meantime are you making payments on it?
      I have student loans that I'll be paying off aggressively if you don't have to make payments, I can use to this to get a head start.

      Comment


      • KaiserMed

        I'll try my best.

        1) Should we be contributing to retirement accounts or just keep attacking the debt? On one hand, I know there are tax benefits to contributing, but that would be at the expense of having all that debt even longer. I am still leaning towards contributing though.

        - This is an age old question that is often asked on of the WCI and there really is no right or wrong answer. That being said, given your student loan interest rate is low, I really think maxing out the retirement accounts should be a high priority. If your investing outlook is long, you would expect to have a higher than 3% return over the next 15-20 years. I think WCI would agree with this.

        2a) If we contribute, what order should we start in before going to the next bucket? Fidelity website gives 3 options: pre-tax, roth, after-tax. What about 529? We can't max everything out because of the debt load.

        - In peak earning years, pre-tax should usually take priority to decrease your tax burden now. After that, I have my putting priority to maxing out the after-tax bucket to have the option to do the Mega back door IRA (https://www.madfientist.com/after-tax-contributions/)

        2b) I am still trying to understand the difference between backdoor and mega backdoor conversions and how these would tie into 2a above.

        - See above.
        - "Normal" backdoor Roth IRA is much more straight forward and just involves contributing to a TIRA and converting to Roth IRA (https://www.whitecoatinvestor.com/ba...h-ira-tutorial)

        3) Where do accounts in my name fall into this since I have no income? Should we use spouse's salary to contribute and fill space under my name? IRA? Taxed brokerage account?

        These retirement accounts are all individual specific. The only thing that would have both of your names would be a joint taxable brokerage account.

        Hope this helps!

        Comment


        • Originally posted by KaiserMed View Post
          Longtime reader, first time poster. I know this is an old post, but there are a lot of TPMG folks here so I'm hoping to get some advice from you all. I read through all 10 pages of this thread and between the HR docs and here, I think I have a pretty decent grasp of all 3 plans. What I don't understand though is what order should we be investing in to make sure we're using the appropriate buckets correctly. A little background info:

          -spouse is TPMG doc, 5 years in (partner) making 350k+
          -me: stay at home parent
          -mortgage $1m (yay norcal), 3%
          -both our student loans total 450k, 3%

          Living in the Bay Area and having kids during residency, we obviously accumulated quite a bit of debt early on. We haven't contributed to plan 3 at all because of constantly paying down all that extra debt. Our only real investment aside from Plans 1-2 has been the house (value risen 100k).

          1) Should we be contributing to retirement accounts or just keep attacking the debt? On one hand, I know there are tax benefits to contributing, but that would be at the expense of having all that debt even longer. I am still leaning towards contributing though.

          2a) If we contribute, what order should we start in before going to the next bucket? Fidelity website gives 3 options: pre-tax, roth, after-tax. What about 529? We can't max everything out because of the debt load.
          2b) I am still trying to understand the difference between backdoor and mega backdoor conversions and how these would tie into 2a above.

          3) Where do accounts in my name fall into this since I have no income? Should we use spouse's salary to contribute and fill space under my name? IRA? Taxed brokerage account?
          Hi KaiserMed , I'll try to add a little bit to what jklin09 has mentioned.
          1. I agree with trying to contribute as much as you can to the pretax 401k bucket, first. For growth, time in the market is essential, even if you can't max out contributions-- even at a time like this.
          2b. Most of the time when you see references to "backdoor Roth" on this forum, it usually references a $6000 individual contribution. Separate from this- At TPMG, one nice thing about the Salary deferral plan is the ability to make roughly $15,880 (in 2020) in after-tax contributions yearly. You can then do an in-plan conversion of this after-tax money into a Roth 401k. If you open up Fidelity Netbenefits, and look under "sources" for the salary deferral plan, you would see several buckets: pre-tax deferral, after-tax, and Roth in-plan conversion (as well as possibly rollover money) amounts.
          You can also put this after-tax money into a personal Roth IRA. Prior to this year, you could only do this quarterly for both Roth 401k and Roth IRA. Starting this year, you are now able to set up automatic in-plan Roth 401k conversions (requires a phone call to Fidelity). Each day, any after-tax money present would be automatically put through the Roth in-plan conversion process to end up in the Roth 401k-- which is nice to reduce taxes on any gains. However, you can only do this once a quarter if you want the money in your personal Roth IRA, because it is technically a distribution. I only mention these possibilities because you might not be happy with the fund choices available to you by the employer. TPMG choices are reasonable. I'd personally want a larger selection of plain index funds (they just added a few), but you can also invest via Brokerage Link as well if you want more control or fund choice.
          I know several TPMG colleagues who aren't making the after-tax contributions because they simply need the cash flow. If you can't max out all "buckets" for tax-advantaged contributions you may not worry so much about the above Roth options, but could consider 529 plans.

          Hope this helps!

          Comment


          • Originally posted by asakkings View Post
            I just signed on with TPMG.

            I have a question regarding the forgivable loan. It and the interest are forgiven in increments at year 5-7. In the meantime are you making payments on it?
            I have student loans that I'll be paying off aggressively if you don't have to make payments, I can use to this to get a head start.
            You are not making payments. The loan lands in your account in one big lump sum.

            I had to return half of it after going down on FTE. I didn't lose any money on interest because I'd kept mine untouched in an 18-month CD (would recommend this). The other half is still in there.

            Just make sure that if you're using the forgivable loan to make other loan payments, that you intend to stay with Kaiser. The only time I ever got a timely response to an email from their finance department was when they came to collect on the loan...

            Comment


            • Thanks for the response, so it sort of works like a signing bonus long as you stay there for a long time.

              Comment


              • Sorry if this is dumb question. Just started with TPMG end of last year and recently qualified for plan 2. Wondering how to set up contributions so that I maximize what TPMG puts in. For pre-tax I am just doing whatever % gets me close to 19500. For after tax im doing what gets me close to 57000-(19500+plan 2 contribution). Because I'm not sure exactly how much TPMG will end up contributing as just started plan 2 in march and also can only get so precise with the whole number options for contribution percentages wonder how other people are deciding on the contribution amounts. Is it something you have to adjust towards the end of the year?

                Comment


                • Originally posted by tonyjerry View Post
                  Sorry if this is dumb question. Just started with TPMG end of last year and recently qualified for plan 2. Wondering how to set up contributions so that I maximize what TPMG puts in. For pre-tax I am just doing whatever % gets me close to 19500. For after tax im doing what gets me close to 57000-(19500+plan 2 contribution). Because I'm not sure exactly how much TPMG will end up contributing as just started plan 2 in march and also can only get so precise with the whole number options for contribution percentages wonder how other people are deciding on the contribution amounts. Is it something you have to adjust towards the end of the year?
                  It will stop automatically. You don't need to set your plan 3 contribution to be "close" to 19500. For examply, you can set it at 50% and max out after one paycheck if you want. The after tax max amount is set by TPMG and they won't let you go over it. It assumes you have a base salary at the $285000 IRS limit. I think its around $16000 this year. Just crank up your savings and TPMG will only let you put in what is allowed.

                  Comment


                  • What are everyone's thoughts on what is going to happen next with this depression/recession? Kaiser can't afford to lose 20% of their members and survive as is. I would imagine no new hires (what about those who just signed contracts?), pay freeze, no bonuses....layoffs? May have to renegotiate with nurses as they appear to be doing with the therapists.

                    Comment


                    • Originally posted by tonyjerry View Post
                      Sorry if this is dumb question. Just started with TPMG end of last year and recently qualified for plan 2. Wondering how to set up contributions so that I maximize what TPMG puts in. For pre-tax I am just doing whatever % gets me close to 19500. For after tax im doing what gets me close to 57000-(19500+plan 2 contribution). Because I'm not sure exactly how much TPMG will end up contributing as just started plan 2 in march and also can only get so precise with the whole number options for contribution percentages wonder how other people are deciding on the contribution amounts. Is it something you have to adjust towards the end of the year?
                      Congrats on qualifying for plan 2! Plan 2 is solely based on your base salary (i.e. if you work extra time for pay it doesn't increase plan 2). So all you can do to increase is to up your FTE if you're less than 1.0 and make sure you qualify for the max March incentive based on your med center/department guidelines.

                      Comment


                      • Originally posted by tonyjerry View Post
                        Sorry if this is dumb question. Just started with TPMG end of last year and recently qualified for plan 2. Wondering how to set up contributions so that I maximize what TPMG puts in. For pre-tax I am just doing whatever % gets me close to 19500. For after tax im doing what gets me close to 57000-(19500+plan 2 contribution). Because I'm not sure exactly how much TPMG will end up contributing as just started plan 2 in march and also can only get so precise with the whole number options for contribution percentages wonder how other people are deciding on the contribution amounts. Is it something you have to adjust towards the end of the year?
                        tonyjerry -Not a dumb question at all. It can be super confusing. But there are numerous communication meetings as well as occasional financial seminars, including a "benefits of being a shareholder" that will walk you through all of this.
                        Congrats on qualifying ! As another poster has mentioned, your pre-tax contributions will automatically cap at $19,500. The same is true for the after-tax contributions. Some people choose to front-load their contributions toward the beginning of the year.
                        Plan 2 contributions are based on your salary and not on a "match", and contributions are made with each paycheck. The plan 2 max contribution is $21,615 for 2020. You will see each paycheck contribution as follows: 5% until you have earned $128,400 for that year. Once you cross that threshold, their contribution amounts will be 10% until you have earned about 275,000. Plan 2 max contribution is $21,615.
                        You are right about the max after-tax contributions. Unfortunately, if you contribute $19,500 pre-tax but receive less than the max amount of Plan 2 contributions (for example, you are on a 6 or 7 tenths schedule somehow, or are in a lower-paying specialty), you will not be able to contribute more than a max of $15,885 in after-tax contributions to hit the IRS limit of $57,000. That question has been raised before and it's not clear if they'll change that in the future.
                        So for now, max after-tax contribution amount is capped at $15,885 for 2020.
                        There will be an annual performance incentive payment at the end of the year, and March bonus when you are elected to senior partner.

                        Comment


                        • I think this has been asked before but I don't think there was a direct answer, but I am reviewing an employment contract for TPMG for a 10 base unit/week position in primary care. The contract seems very standardized, so I was wondering if there is any utility in having a contract lawyer take a look at it? Is there anything else I should consider or watch out for?

                          Comment


                          • Originally posted by WheatThins View Post
                            I think this has been asked before but I don't think there was a direct answer, but I am reviewing an employment contract for TPMG for a 10 base unit/week position in primary care. The contract seems very standardized, so I was wondering if there is any utility in having a contract lawyer take a look at it? Is there anything else I should consider or watch out for?
                            unnecessary.

                            Comment


                            • Originally posted by WheatThins View Post
                              I think this has been asked before but I don't think there was a direct answer, but I am reviewing an employment contract for TPMG for a 10 base unit/week position in primary care. The contract seems very standardized, so I was wondering if there is any utility in having a contract lawyer take a look at it? Is there anything else I should consider or watch out for?
                              if its anything like SCPMG you cant change it at all anyways.....so no utility.

                              Comment


                              • Got it, thank you so much, I appreciate it!

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