Not enough retirement accounts

[daman42886]

New attending here. I am currently a W2 employee with a path to partnership in 2 years. The practice I started at does not offer any 401k or any similar tax advantaged retirement account. In addition, the health insurance provided by the group is not eligible for HSA as it's out of pocket maximum is too high. I have the option of choosing a new health plan later this year.

Is my only option for tax advantaged retirement savings via a Roth IRA and spousal Roth IRA or am I missing something? $11,000 a year doesn't seem like much to me especially as I'm seeing others on this site putting away significantly more than that.  Don't get me wrong though, I have other things I can do with some of my money like re-financing and paying off my student loans ($210,000), building up our emergency fund, and saving for a down payment on a house. But should I also start putting some money into a taxable account for retirement? Or is there a better option? Thanks.

[FIREshrink]

If employed, you can work with HR to start up a 401k plan. If self-employed/contracted you have other options.

Anyway, you can save money in a taxable account for retirement and it isn't a bad thing at all.

I was very attentive to my employer's retirement plan when I was hired. It was very important to me. They offer a 403b, a 457b, and a 401a (the latter is matching, about 10% of my salary). I knew they offered very low cost Fidelity mutual funds and charged no silly fees. I doubt I would have worked somewhere that didn't offer a retirement plan, and a good one.

[Hatton]

I also agree pay off some debt and save in the taxable..do you have better options as a partner?

[PhysicianOnFIRE]

Ask the other docs what they do. I'm not saying you should do what they do (especially if it involves cash value life insurance), but you might find out that you were missing something or misinformed. Most W2 jobs offer some kind of a retirement plan. How big or small is the employer?

As far as the HSA, a high-deductible health plan should be eligible for an HSA. Are you sure the out-of-pocket max is too high? It may be too low.

Best,

-PoF

[daman42886]

Thanks for the answers.

The out of pocket max for our health plan is actually $14,300 for family which is higher than $13,100 limit for an HSA. It is a pretty bad health plan and I am looking forward to shopping around at the end of the year.

I live in a high cost of living area which may have factored into the group's decision not to offer retirement plans. Not sure what the other 3 partners are doing but will ask. I guess the somewhat good news is that we may be being "bought out"/affiliating with one of the hospital systems in the area and thus will have access to whatever retirement plans that they offer.

On a side note, I recently found out that this hospital system that we may be joining is actually a Section 501(c)(3) organization, which means that if I am employed by them I may be eligible for the public service loan forgiveness program. I have already made about 4.5 years of eligible payments during training. Do you think it would be worth it to wait potentially 1-2 years before refinancing my $210,000 student loan debt (which is at 6.55%) in case this partnership goes through with the hospital system? I know if I refinance now I will be ineligible. I was planning on refinancing with a 10 year term and would probably get a fixed rate around 4-4.5%.

Thanks again for the responses.

 

[Hank]

Going for PSLF somewhere might be worthwhile.  Your current employer seems to have rather poor benefits.  That said, if the compensation is high enough, you still might be okay.

If you don't have much in the way of benefits, it's best to have very high compensation and be a 1099 independent contractor so you can have a solo 401(k), choose your own benefits, and run a bunch of expenses against your income.

[The White Coat Investor]

daman42886 wrote:

Thanks for the answers.

The out of pocket max for our health plan is actually $14,300 for family which is higher than $13,100 limit for an HSA. It is a pretty bad health plan and I am looking forward to shopping around at the end of the year.

I live in a high cost of living area which may have factored into the group’s decision not to offer retirement plans. Not sure what the other 3 partners are doing but will ask. I guess the somewhat good news is that we may be being “bought out”/affiliating with one of the hospital systems in the area and thus will have access to whatever retirement plans that they offer.

On a side note, I recently found out that this hospital system that we may be joining is actually a Section 501(c)(3) organization, which means that if I am employed by them I may be eligible for the public service loan forgiveness program. I have already made about 4.5 years of eligible payments during training. Do you think it would be worth it to wait potentially 1-2 years before refinancing my $210,000 student loan debt (which is at 6.55%) in case this partnership goes through with the hospital system? I know if I refinance now I will be ineligible. I was planning on refinancing with a 10 year term and would probably get a fixed rate around 4-4.5%.

Thanks again for the responses.

 

Click to expand...

Oh man, that's a hard question. I think if I could afford to pay them off, I probably would just refinance and get started in your situation. If I were desperate, maybe I'd hold on. Every year that you don't join the organization makes it less valuable to you. Remember what is forgiven at the end is the difference between attending payments and resident payments, but if you do a 3 year residency and then work outside a 501(c)3 for 3 years, you've eliminated the benefits of PSLF.