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  • #31





    Personally it has saved me just last year >>50k in taxes 
    Click to expand…


    It didn’t save you any money on taxes.  You just deferred your taxes until later.  It might end up saving you some money, but it will almost definitely save you less than the 50k you deferred, as you will have to pay some taxes later even if you have no other income when you withdraw the money.   It’s also possible that you will end up paying more taxes than you would have.  Time will tell.
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    Disagree. Let's say last year I deferred 160K, for my household all 160K would have been taxed at the highest marginal tax rate (39%) so I paid 62K less in taxes. In the meantime that 160K is invested in low cost index fund, so let's say in 15 years after it has grown pre-tax, i will pay taxes at lower rate AND i will not withdraw it in a lump sum, but over many years as it continues to grow. This is a powerful program in my opinion. Not saying it's fair, but this is one way the rich get richer.

    FLP

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    • #32
      Thoughts on the following re: pension solvency?

       

      http://www.modernhealthcare.com/article/20150919/MAGAZINE/309199961?appSession=96426138496872115677144178283 14433288948921325775992606723746373481888378414518 3934055910140542480226295522464905998367625961902

      http://emma.msrb.org/EA742607-EA581963-EA977976.pdf

       

      See the pension section in the financial statements.  7.25% expected return?  Significant underfunding at the moment.

       

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      • #33
        I didn't read the article in detail (yet) but looks like they are referring to KFH pension not TPMG. KFH covers the RN's, and the hospital facilities, they partner with TPMG (the physician group). I believe the TPMG pension is well funded and managed but someone else maybe can chime in.

        fatlittlepig

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        • #34


          Thoughts on the following re: pension solvency? http://www.modernhealthcare.com/article/20150919/MAGAZINE/309199961?appSession=96426138496872115677144178283 14433288948921325775992606723746373481888378414518 3934055910140542480226295522464905998367625961902 http://emma.msrb.org/EA742607-EA581963-EA977976.pdf See the pension section in the financial statements. 7.25% expected return? Significant underfunding at the moment.
          Click to expand...


          FLP is correct, these articles refer to the KFH and Health Plan pensions not the physician pensions. Keep in mind that KP is a grouping of three different entities. Kaiser Foundation Hospitals, Kaiser Health Plan, and (in NCal anyway) TPMG. They send out an annual report giving a bunch of details. The last one I received (April 2016) contained the following information about the funding status based on the year end 2015: Funding target percentage 111.66% with adjusted interest rates (meaning using 25 year average of interest rates), 85.4% without adjusted interest rates (meaning using the last 2 years of interest rates). These numbers are better compared to where the plan was in 2013 and 2014 (both hovering around 80% funding without the adjusted interest rates, ie interest rates around 0%).

           

           

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          • #35


            Disagree. Let’s say last year I deferred 160K, for my household all 160K would have been taxed at the highest marginal tax rate (39%) so I paid 62K less in taxes. In the meantime that 160K is invested in low cost index fund, so let’s say in 15 years after it has grown pre-tax, i will pay taxes at lower rate AND i will not withdraw it in a lump sum, but over many years as it continues to grow.
            Click to expand...


            No matter how you look at it, you will still pay taxes later.  You will possibly pay less, but you are very unlikely to pay nothing. Best case scenario:   You withdraw the 160k in a year with no other income, and pay a federal effective rate of 20%.  So, you would save 31,000, not 62,000. ( plus you will save some state tax as well )  That's assuming that you have no other income that year: no social security, no rental income, no capital gains, no dividends.

            Plus, if your income is that high, ( over 600k after all deductions)  then you will probably have RMDs at age 71 that will put you into the highest tax bracket.  So unless you retire very young, with little other income, you might end up using up all of your lower tax brackets just doing Roth conversions to get your 401k money out of the highest tax bracket.  In that case, there will little or no extra tax savings from your deferred comp.

            Bottom line:  Run the numbers to be sure that the potential tax savings  are worth the risk of company default and the hassle.

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            • #36
              Curious, since the plan offers both non-deductible contributions to do a mega-roth rollover and a deferred comp.

              What's the strategy between the two? Max the mega-roth first and then deferred comp? Or mix it up?

              I imagine the Roth is better from a "safety" perspective since it's in your possessive whereas deferred comp there's the inherent risk of losing it since it's essentially a "promise" from the company.

              If you're in a high marginal bracket and can time your exit then the tax savings could be huge!

              All this being said maybe worth to see how taxes shake out with this administration and make adjustments as needed.

              Comment


              • #37
                Hi all,

                this is more a "how-to" question related to mega backdoor ROTH at TPMG. I've read the WCI post on mega backdoor ROTHs and some other posts about it. Admittedly I have not read the details of the plan documents for this yet, but wanted to get my question in before the thread becomes more dormant.

                At TPMG I know we can contribute after tax money to the plan 3 up to the IRS limit (54k for 2017 minus my 18k employee for my age + Plan 2 contribution ~20k = ~16k... right?). For that after tax contribution, is there an in-service withdrawal or transfer I do on a ?monthly or ?yearly basis to my vanguard ROTH IRA account or how does that all work practically speaking? I am also a little confused about any potential gains that aftertax 401k money makes prior to a conversion and how that factors in.

                Since there are so many of you here, was hoping I could tap into the collective wisdom. Thanks in advance.

                -Brian

                Comment


                • #38


                  this is more a “how-to” question related to mega backdoor ROTH at TPMG. I’ve read the WCI post on mega backdoor ROTHs and some other posts about it. Admittedly I have not read the details of the plan documents for this yet, but wanted to get my question in before the thread becomes more dormant.
                  Click to expand...


                  They sent out instructions on how to do it.  Call regional physician benefits and they can probably send you the instructions and also walk you through it.

                  I believe that you had to indicate in advance a percentage of your paycheck ( or a dollar amount ?? ) that would be contributed as after tax.  Then there was a process to do the in-service rollover.   Check with Physician Benefits .

                  Comment


                  • #39




                    Hi all,

                    this is more a “how-to” question related to mega backdoor ROTH at TPMG. I’ve read the WCI post on mega backdoor ROTHs and some other posts about it. Admittedly I have not read the details of the plan documents for this yet, but wanted to get my question in before the thread becomes more dormant.

                    At TPMG I know we can contribute after tax money to the plan 3 up to the IRS limit (54k for 2017 minus my 18k employee for my age + Plan 2 contribution ~20k = ~16k… right?). For that after tax contribution, is there an in-service withdrawal or transfer I do on a ?monthly or ?yearly basis to my vanguard ROTH IRA account or how does that all work practically speaking? I am also a little confused about any potential gains that aftertax 401k money makes prior to a conversion and how that factors in.

                    Since there are so many of you here, was hoping I could tap into the collective wisdom. Thanks in advance.

                    -Brian
                    Click to expand...


                    Hi Brian-

                    You are correct about the limits of the after-tax contribution that can be made. Once you have money in the after-tax portion of your 401k, you have 3 options (as far as I understand it):

                    1. Leave it as after-tax (which doesn't make much sense to me as to why one would want to do this, but you could)

                    2. Convert it to Roth 401k (which will show up as Roth In-plan Conversion under sources if you look in NetBenefits under Salary Deferral Plan).

                    3. Covert it to Roth IRA.

                    Now my Roth IRA is also with Fidelity, so when I called them to do the conversion they gave me the choice of Roth 401k vs Roth IRA and said either way could be done that day.  I don't know if there are extra steps involved if you are moving from after-tax Fidelity 401k to a Vanguard IRA. When I first did this (I think it was 2012), the research that I did suggested that the Roth 401k was better. I think it was because our investment choices are really good in the 401k and asset protection was somewhat better for the 401k vs the IRA (though I admit the details are fuzzy since I haven't revisited that decision since that time). Starting last year, you can do this conversion once a quarter but not more frequently. (before last year this process was much more difficult requiring a notarized form with spousal signature and you could make the after-tax contribution as a lump sum in December) You will have to pay taxes on any gains and they will send you the appropriate forms for tax time. If you do this each quarter and you spread out the maximum amount throughout the year, you're only looking at gains for less than 3 months for contributions of less than $4k each quarter. Hope this helps!

                    WW

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                    • #40
                      We never did the DCP at Kaiser since we didn't know about it at that time.   I've done it with UC now, also with Fidelity.

                      DCP >  Roth IRA.   It's an after-tax 'distribution'  to the Roth IRA.  simple call and tell them xxx  account to distribute to xxx account.  Disclosures have to be verified and read back every 6 months IIRC.  Simple and easy, just takes about 15min to do.  Can not be done online.

                      I sweep my DCP to Roth IRA every quarter.  There are some earnings that occur, that are taxable at distribution, but I sweep those to a standard Rollover IRA and keep it there.  The fidelity agents know how to do all this.

                       

                       

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                      • #41
                        What do you mean you sweep your DCP to Roth IRA is this something specific to your plan?

                        Are you actually receiving your deferred comp each quarter now, how long did you defer for? How are you taking deferred comp which is pre-tax and magically converting it to post-tax Roth IRA (is there some steps in the middle you're skipping over?).

                        Thanks!

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                        • #42
                          Want to stress that UCs DCP (Defined Compensation Plan) is very different from Kaiser's Employee deferred comp plan (works like a non-governmental 457b).  I believe that Kaiser does have a DCP type plan that allows for Post-Tax contributions and then move those funds to a Roth IRA

                          Here is the boglehead thread that I discovered last year to allow for this:  https://www.bogleheads.org/forum/viewtopic.php?t=68443

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                          • #43
                            Those that have been working at Kaiser for more than 10 years, if you could go back, would you still do it? I'm about to start my first attending job this summer, and considering doing private practice until I retire, but reading about the amazing pension Kaiser offers, makes me wonder... is it worth it?

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                            • #44
                              Yes I would definitely do it again.

                              Comment


                              • #45
                                There's an inherent selection bias for asking any 10+ year person on their job satisfaction of choice.    I think the more telling one is 5-10 years who've gone through a few attrition cycles.

                                Kaiser is definitely worth a look and my family all enjoy being Kaiser docs because their mentality fits the Kaiser model.   Do not get lost in the weeds of compensation and retirement.  Match up the job and all the moving parts that surrounds it.

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