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  • 401k not offered

    I started a new job recently. I will not be eligible to contribute to our 401k until Jan 2019. I am currently an employee but will be a partner by the time I can contribute to the 401k. In 2018, I plan on maxing out my HSA, Backdoor Roth IRA, and hopefully do some side work to contribute a little to a solo 401k. I do not have a spouse or children. Am I missing any other tax deferred options that I can contribute to before I am allowed to contribute to our 401k in 2019 or should I contribute the rest to a taxable account?

  • #2
    Best to focus on the savings, not the taxes. You're correct, that a taxable account in your situation is the better choice. Or use this year to bolster other areas that need attention, such as OO LTDI, debt payoff, saving for short-term goals, etc.

    11 Reasons You Need a Taxable Investment Account
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Unfortunately, one of more aggravating choices made by companies.  'We love you, we hire you', yet we want you to prove your 'loyalty' by waiting a year to access the 401k plan.  The future value of one year of missed contribution is fairly significant depending upon the contribution time and a 'normal' retirement age.  I get companies don't want to go through the hassle of signing someone up, then the person moving one, especially in areas where employee turnover is high, but there has got to be a better balance than setting a one year 'probation'.  Make it 3 months or 500 hours, but a one year wait is totally arcane imo.

      I am grateful to a former employer who chose to allow me to contribute upon employment in 1998 the full 10K (401k limit at the time), plus whatever match was received.  My expectation is that the 10K will be turned into 65k to 75k of 'retirement funds' by the time I retire.

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      • #4
        I'm in a worse off situation 401k job wise as I will be leaving one with a 401 k (and a 7k match per year) for another one with no 401k option ever, but that comes with a raise to offset it. I am however thankful that my residency offered a great match (they put in 16k over 4 years, free money!) so I had a head start on retirement savings.  I plan on starting a taxable account next year, continuing my HSA/backdoor roths, and paying down student loans (their at 2.8 % variable now).  Do you have any loans that still need paying off that you could pay off more aggressively this year while waiting to be allowed to contribute to your groups 401k?

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        • #5
          Yeah I think I will hit the student loans a little harder. I have about $80k left in student loans that I was going to pay off in about 26 more months. I could definitely hit that a little harder and pay it off early. Interest rate is 3.99% so it wasn’t that bad of a loan. I already maxed my own occupation LTD insurance. I have 6 months living expenses in an emergency fund. Just makes me a little frustrated to not get as much in as possible at a young age into a tax deferred account. I guess if I could work a few weekend hospitalist shifts on the side and make $18,500, I could place every bit of that in my solo 401k and never have to pay taxes on it.

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