Academic employment advantages?

[finalpsychyear]

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Have a friend considering OSU FTE starting in the nearby future. Is it a no brainer that most anyone in this higher salary range esp being single should be doing the 457b, 403b, and ARP (Defined contribution 14% match from employer) without even thinking twice from day 1?

 

[aneftp]

Usually a 1 year pit stop for lots of attendings.

The issue with academics is the workload
The senior faculty hide out with non clinical days

On days they are clinical they will take the ca-3 or crna and chill

The new attendings are the workhorse of the dept.

Agree on tax advantages of 401a, 403b, 457b as a single person. Can put away $23k, 23k and the irs 401a limit up to w2 (340k) (whatever the mandatory pretax withholding is? So can put away 55k pretax which is pretty good Better than most amc. Plus employer gives generous match.

So if ur friend can deal with the uneven workload. Academics isn’t a bad deal.

 

[kidthor]

Usually a 1 year pit stop for lots of attendings.

The issue with academics is the workload
The senior faculty hide out with non clinical days

On days they are clinical they will take the ca-3 or crna and chill

The new attendings are the workhorse of the dept.

Agree on tax advantages of 401a, 403b, 457b as a single person. Can put away $23k, 23k and the irs 401a limit up to w2 (340k) (whatever the mandatory pretax withholding is? So can put away 55k pretax which is pretty good Better than most amc. Plus employer gives generous match.

So if ur friend can deal with the uneven workload. Academics isn’t a bad deal.

I wish my academic shop had retirement benefits that good! I think that academic places are actually all having worsening retirement packages, oddly - which is leading to hiring problems when you compare to what one can do as a 1099 or partner.

I also agree with you that, depending on the place, the new attendings can be workhorses. It really depends though. Where I am the call and nonclinical time is relatively well spread out and they even let junior people also opt out or scale down their call (which comes at a dollar price of course).

 

[Iso4ane]

Usually a 1 year pit stop for lots of attendings.

The issue with academics is the workload
The senior faculty hide out with non clinical days

On days they are clinical they will take the ca-3 or crna and chill

The new attendings are the workhorse of the dept.

Agree on tax advantages of 401a, 403b, 457b as a single person. Can put away $23k, 23k and the irs 401a limit up to w2 (340k) (whatever the mandatory pretax withholding is? So can put away 55k pretax which is pretty good Better than most amc. Plus employer gives generous match.

So if ur friend can deal with the uneven workload. Academics isn’t a bad deal.

And depending on how you feel about the future of tax rate, I heard OSU offers Roth post-tax contributions into the 403B and 457B. One can do partial or full non-Roth/Roth contributions depending on how much hedging you want to take.

 

[aneftp]

And depending on how you feel about the future of tax rate, I heard OSU offers Roth post-tax contributions into the 403B and 457B. One can do partial or full non-Roth/Roth contributions depending on how much hedging you want to take.

Roth post tax offered at most state universities and VA federal places.

I live in Florida a no state income tax state and keep my effective tax rate below 23%. We can debate till the cows go home. But if u effective tax rate is lower. And live in no state income tax state like Florida. I’d advise to go for Roth

But if live in California or New York exposed to high state income taxes and are single (meaning ur Effective tax rates likely 27-30%) pretax is a no brainer.

The married people who make less than 550k gross and married and no state income tax state who have access to Roth, it’s better (in my opinion) to go for Roth due to the tax brackets. You won’t touch the 35% marginal tax threshold being married and making less than that

Singles get killed after 225k agi.

 

[finalpsychyear]

Roth post tax offered at most state universities and VA federal places.

I live in Florida a no state income tax state and keep my effective tax rate below 23%. We can debate till the cows go home. But if u effective tax rate is lower. And live in no state income tax state like Florida. I’d advise to go for Roth

But if live in California or New York exposed to high state income taxes and are single (meaning ur Effective tax rates likely 27-30%) pretax is a no brainer.

The married people who make less than 550k gross and married and no state income tax state who have access to Roth, it’s better (in my opinion) to go for Roth due to the tax brackets. You won’t touch the 35% marginal tax threshold being married and making less than that

Singles get killed after 225k agi.

Base is 450 ish plus bonuses which usually have them over 500. Thats crazy to be single w2 at 500k. need to do pre tax 457 and 403 imo.

 

[aneftp]

Base is 450 ish plus bonuses which usually have them over 500. Thats crazy to be single w2 at 500k. need to do pre tax 457 and 403 imo.

If they are single making 500k. Even with tax deductions. They will pay around 20k more in federal taxes than a married person making 500k

Blame the USA tax code on that. So if the spouse is a teacher making 50k a year. It makes no sense to have the teacher salary exposed to 35-37% taxes above 550k plus pay for child care (30k in child care) when the kids are very young

 

[Simba1711]

Some considerations for 457b is that it’s more like a deferred compensation. If the company goes bankrupt they can use your money to pay debt. It’s protected if it’s governmental 457b. Also, for non governmental companies , the options for roll over may be limited once you leave the job. It’s a no brainer for governmental 457b. Probably safe for nongovernmental 457b but more risk and depends on rollover options.

 

[aneftp]

Some considerations for 457b is that it’s more like a deferred compensation. If the company goes bankrupt they can use your money to pay debt. It’s protected if it’s governmental 457b. Also, for non governmental companies , the options for roll over may be limited once you leave the job. It’s a no brainer for governmental 457b. Probably safe for nongovernmental 457b but more risk and depends on rollover options.

Seems like OP is referring to a true state academic gig.

 

[Simba1711]

Seems like OP is referring to a true state academic gig.

Good to know. My next academic job is non governmental 457 b so I’m debating whether to do it.

 

[ToKingdomCome]

If they are single making 500k. Even with tax deductions. They will pay around 20k more in federal taxes than a married person making 500k

Blame the USA tax code on that. So if the spouse is a teacher making 50k a year. It makes no sense to have the teacher salary exposed to 35-37% taxes above 550k plus pay for child care (30k in child care) when the kids are very young

This isn’t a bad Compensation package for academics ? But it’s bad because he will probably have to work a **** ton as
Others have mentioned ?

 

[DrN2O]

In addition to Roth 403b and 457b, some places also have mechanisms for mega backdoor roth. That way one should max out the 403b and 457b with pretax contribution, and do the rest in MBR.

 

[ambiturner]

I wish my academic shop had retirement benefits that good! I think that academic places are actually all having worsening retirement packages, oddly - which is leading to hiring problems when you compare to what one can do as a 1099 or partner.

I also agree with you that, depending on the place, the new attendings can be workhorses. It really depends though. Where I am the call and nonclinical time is relatively well spread out and they even let junior people also opt out or scale down their call (which comes at a dollar price of course).

Our big academic center hired consultants a few years back to address benefits. The consultants are clearly paid to say that the ‘trends’ in academic benefits is toward lower matches, no defined benefit plans, and crappier health plans. Because the centers essentially control the median package, it is fairly easy to accomplish this nationally and I agree that the places that used to offer crazy good benefits (full tuition for kids, pension plans, all healthcare paid, full 403b contribution, etc) are one by one disappearing.

This OSU package is quite good if you don’t mind Columbus, an affordable city with good amenities but landlocked and bad weather.

 

[aneftp]

Our big academic center hired consultants a few years back to address benefits. The consultants are clearly paid to say that the ‘trends’ in academic benefits is toward lower matches, no defined benefit plans, and crappier health plans. Because the centers essentially control the median package, it is fairly easy to accomplish this nationally and I agree that the places that used to offer crazy good benefits (full tuition for kids, pension plans, all healthcare paid, full 403b contribution, etc) are one by one disappearing.

This OSU package is quite good if you don’t mind Columbus, an affordable city with good amenities but landlocked and bad weather.

I’m sorry. Im a traditionalist at heart. But most true academics places have and continue to have great benefits. From the state academic places to even private true academic like Hopkins has great benefits even 50% off tuition for kids to attend ANY COLLEGE in the USA.

I have no clue what these non traditional academic places like hca gme places offer.

But when in think academics. I think of duke, Hopkins Mass gen/brigham/stanford to true state academic places like unc, uva , iowa, Indiana, uab etc

 

[deleted87051]

Speaking of academics, Brigham cardiologist and associate professor of medicine at HMS earns $255k? Insane.

Cardiologist files lawsuit over salary—says she earns 37% less than male colleague she trained

A veteran cardiologist in Boston has filed a new lawsuit that claims she is earning a much lower salary than a less experienced male colleague. She believes this violates the Massachusetts Equal Pay Act.

cardiovascularbusiness.com

 

[aneftp]

Speaking of academics, Brigham cardiologist and associate professor of medicine at HMS earns $255k? Insane.

Cardiologist files lawsuit over salary—says she earns 37% less than male colleague she trained

A veteran cardiologist in Boston has filed a new lawsuit that claims she is earning a much lower salary than a less experienced male colleague. She believes this violates the Massachusetts Equal Pay Act.

cardiovascularbusiness.com

It’s true. One of the mass gen residents told
Me anesthesia pay is also
Very low. Because of the prestige of the Harvard resume.

Mass eye and ear does pay better than mgh. (For anesthesia)

So they are counting on doctors taking less pay due to institution name.

 

[Simba1711]

Doesn’t surprise me. Generally bigger academic name and prestige means lower pay.

 

[ambiturner]

I’m sorry. Im a traditionalist at heart. But most true academics places have and continue to have great benefits. From the state academic places to even private true academic like Hopkins has great benefits even 50% off tuition for kids to attend ANY COLLEGE in the USA.

I have no clue what these non traditional academic places like hca gme places offer.

But when in think academics. I think of duke, Hopkins Mass gen/brigham/stanford to true state academic places like unc, uva , iowa, Indiana, uab etc

I didn’t say they weren’t good, but that they were getting worse. UChicago and Boston Childrens used to cover nearly full tuition anywhere in US and had to pull it back to something closer to that median 50%, to give one example.

 

[finalpsychyear]

Usually a 1 year pit stop for lots of attendings.

The issue with academics is the workload
The senior faculty hide out with non clinical days

On days they are clinical they will take the ca-3 or crna and chill

The new attendings are the workhorse of the dept.

Agree on tax advantages of 401a, 403b, 457b as a single person. Can put away $23k, 23k and the irs 401a limit up to w2 (340k) (whatever the mandatory pretax withholding is? So can put away 55k pretax which is pretty good Better than most amc. Plus employer gives generous match.

So if ur friend can deal with the uneven workload. Academics isn’t a bad deal.

so the 401a (55k), 403b(23k), 457b (23k) add up to a 100k ish that the academic faculty employee can tax defer all of it? Here I was thinking the 1099 foks have got it nice with the 69k 401k limit not counting the DB plans and such which aren't that great until your in your 40-50s

 

[aneftp]

so the 401a (55k), 403b(23k), 457b (23k) add up to a 100k ish that the academic faculty employee can tax defer all of it? Here I was thinking the 1099 foks have got it nice with the 69k 401k limit not counting the DB plans and such which aren't that great until your in your 40-50s

With employer matching 7-10% of 401a (up to irs 401a limit or similar) is up to 345k employee salary this year (so not your total salary)

Plus employee deferrals. You are talking a 75-80k retirement both employer and employee for retirement in true academics state places. If over age 50. That’s around 100k retirement per year.

“
The annual compensation limit under sections 401(a)(17), 404(l), 408(k)(3)(C),
and 408(k)(6)(D)(ii) is increased from $330,000 to $345,000.”

https://www.irs.gov/pub/irs-drop/n-23-75.pdf

 

[finalpsychyear]

With employer matching 7-10% of 401a (up to irs 401a limit or similar) is up to 345k employee salary this year (so not your total salary)

Plus employee deferrals. You are talking a 75-80k retirement both employer and employee for retirement in true academics state places. If over age 50. That’s around 100k retirement per year.

“
The annual compensation limit under sections 401(a)(17), 404(l), 408(k)(3)(C),
and 408(k)(6)(D)(ii) is increased from $330,000 to $345,000.”

https://www.irs.gov/pub/irs-drop/n-23-75.pdf

Thanks for the clarification. All i know is 14% from the employee and 11% roughly from the employer goes into the 401a until they add up to 69k combined limit. Then apparently it goes into some weird 415(m) type of rare account unqualified.

They will be close to 100k even if they don't do the 457 or 403 but not all of that 100k will be tax deductible.

 

[aneftp]

Thanks for the clarification. All i know is 14% from the employee and 11% roughly from the employer goes into the 401a until they add up to 69k combined limit. Then apparently it goes into some weird 415(m) type of rare account unqualified.

They will be close to 100k even if they don't do the 457 or 403 but not all of that 100k will be tax deductible.

Correct. There is a 415 limit of 69k (for those under age 50).

But state institutions can bypass the 69k limit cause of irs exemptions to a state 457b plan (that doesn’t count) against
That limit or various other retirement means

 

[finalpsychyear]

Correct. There is a 415 limit of 69k (for those under age 50).

But state institutions can bypass the 69k limit cause of irs exemptions to a state 457b plan (that doesn’t count) against
That limit or various other retirement means

Hi thanks for all the info you were spot on in what you said. Essentially they keep contributing into the 415 after you hit the 69k limit.
So it adds up to about 110k (61k employee tax deductible and roughly 50k employer). If one were to do the 457b and 403b those are 23k a piece tax deductible so a theoretical 156k running total plus i don't know if a backdoor roth ira of 7k plus hsa of 4k is still allowed but holy crap that pushes it to almost 170k in retirement savings if that were the case. Insane amounts regardless.

Wish me luck in convincing a 29 yo to do more than the 110k amount that's essentially mandatory.

 

[abolt18]

Hi thanks for all the info you were spot on in what you said. Essentially they keep contributing into the 415 after you hit the 69k limit.
So it adds up to about 110k (61k employee tax deductible and roughly 50k employer). If one were to do the 457b and 403b those are 23k a piece tax deductible so a theoretical 156k running total plus i don't know if a backdoor roth ira of 7k plus hsa of 4k is still allowed but holy crap that pushes it to almost 170k in retirement savings if that were the case. Insane amounts regardless.

Wish me luck in convincing a 29 yo to do more than the 110k amount that's essentially mandatory.

Backdoor Roth is 100% still allowed. HSA only if you have a HDHP that qualifies... I'd suspect less likely with an academic institution? They usually have pretty solid health insurance.

 

[aneftp]

Hi thanks for all the info you were spot on in what you said. Essentially they keep contributing into the 415 after you hit the 69k limit.
So it adds up to about 110k (61k employee tax deductible and roughly 50k employer). If one were to do the 457b and 403b those are 23k a piece tax deductible so a theoretical 156k running total plus i don't know if a backdoor roth ira of 7k plus hsa of 4k is still allowed but holy crap that pushes it to almost 170k in retirement savings if that were the case. Insane amounts regardless.

Wish me luck in convincing a 29 yo to do more than the 110k amount that's essentially mandatory.

It will likely be less since the 401a limit is 345k this year (give or take)

So even if my academic salary were 500k. Say employer gives a 10% match with a 4% mandatory employee contribution.

The most the employer will match u is $34500.00 (10% of 345k). Not 10% of the 500k academic salary same goes for 4% employee contributions. ($13800) based on 345000 irs 401a limit.

 

[Simba1711]

The hsa plan is nice for its triple tax savings but it’s limited to 4150 for a single person in 2024. Like someone posted above it’s usually not applicable for an academic job. They are usually available for people in amcs or private practice where they offer high deductible plans and these health insurance plans are terrible. I would take the great health insurance plans in academics anytime over a chance to save some extra money in hsa.

 

[Simba1711]

The backdoor Roth should still be allowed at your job. The white coat investor has a nice step by step guide to implement depending on your brokerage firm. Just make sure you don’t have any money in Ira accounts and roll over that money to a non Ira account if you do. You will have to pay taxes on any money in an Ira account per the pro-Rata rule.

 

[maxxor]

I didn’t say they weren’t good, but that they were getting worse. UChicago and Boston Childrens used to cover nearly full tuition anywhere in US and had to pull it back to something closer to that median 50%, to give one example.

I'm in Radiology, but looking for a new gig and notice this change as well. The "conventional wisdom" that academic places have "awesome benefits" doesn't seem to apply to non-state facilities. Benefits are getting chopped.

State academic institutions still better than average benefits.

 

[aneftp]

I'm in Radiology, but looking for a new gig and notice this change as well. The "conventional wisdom" that academic places have "awesome benefits" doesn't seem to apply to non-state facilities. Benefits are getting chopped.

State academic institutions still better than average benefits.

It’s 60k something for Stanford and Georgetown for my two nephews. So even either 50% off is 30k per kid. That’s a significant benefit especially with 2 kids in college.

If academics pays say low 400s getting tax free 60k is equivalent to 90k pretax

Pushing 500k in place where you won’t work more than 40 hours before overtime and limited calls.

That’s not bad

 

[pie944]

The backdoor Roth should still be allowed at your job. The white coat investor has a nice step by step guide to implement depending on your brokerage firm. Just make sure you don’t have any money in Ira accounts and roll over that money to a non Ira account if you do. You will have to pay taxes on any money in an Ira account per the pro-Rata rule.

You are correct that if you attempt to do a backdoor Roth with your own personal money(2024 7k limit or 8k limit if you are above 50) and you have any money in personal IRA accounts (rollover from an old job for example) you will be forced to roll it all over, not partially.

However, this does not apply with the work Roth conversion. You can have money in IRAs in your personal account and are not forced to do anything with it in this situation.

These two types of Roths are separate entities with separate limits.

 

[anbuitachi]

14% of your salary? thats really good for academic

 

[finalpsychyear]

14% of your salary? thats really good for academic

Well if you sign up for the state pension which is only worthwhile for someone thats going to stay 5+ years then you get the full 14 otherwise its 11% matching into a 401k that your 100% vested from day 1 that goes with you if you leave but it comes out to about 30k ish of free money.

 

[finalpsychyear]

It’s 60k something for Stanford and Georgetown for my two nephews. So even either 50% off is 30k per kid. That’s a significant benefit especially with 2 kids in college.

If academics pays say low 400s getting tax free 60k is equivalent to 90k pretax

Pushing 500k in place where you won’t work more than 40 hours before overtime and limited calls.

That’s not bad

Do all these 401a, 457b 403b for W-2 earners reset in january 2025 in terms of contribution levels from your paycheck when you start in july or aug fresh out from residency in year 1 attendinghood?

I only ask since i do 1099 work I never actually contribute to my 2023 401k until 2024 mid october but i still get the deduction on taxes.

So for academics as a W-2 i think its 23k for 457 and 403 for 2024 limits. Does that mean someone starting in mid 2024 better contribute all that by end of 2024 from their paycheck otherwise they are out of luck and cannot fully get the maximum tax deductions for 2024?

 

[kidthor]

Well if you sign up for the state pension which is only worthwhile for someone thats going to stay 5+ years then you get the full 14 otherwise its 11% matching into a 401k that your 100% vested from day 1 that goes with you if you leave but it comes out to about 30k ish of free money.

100% vesting on day 1 is a great thing. My academic employers have all had long vesting schemes from between 3-5 years. I've seen people make weird decisions based on vesting, causing them to stick around in situations they didn't like just so that they'd get that extra 20K (or whatever) in retirement money.

 

[maxxor]

100% vesting on day 1 is a great thing. My academic employers have all had long vesting schemes from between 3-5 years. I've seen people make weird decisions based on vesting, causing them to stick around in situations they didn't like just so that they'd get that extra 20K (or whatever) in retirement money.

Agree. That’s not common. Many non-state academic places are 1 year to even get the match and 3-5 years with cliff vesting.

It’s 60k something for Stanford and Georgetown for my two nephews. So even either 50% off is 30k per kid. That’s a significant benefit especially with 2 kids in college.

If academics pays say low 400s getting tax free 60k is equivalent to 90k pretax

Pushing 500k in place where you won’t work more than 40 hours before overtime and limited calls.

That’s not bad

Gotta read the fine print of these vanishing tuition benefits. Many of them benchmark the amount they pay out to some percent of their own school’s tuition. It’s not necessarily 50% off the sticker price. I have seen some amazing sounding tuition benefits but the devil is absolutely in the details.

 

[aneftp]

Agree. That’s not common. Many non-state academic places are 1 year to even get the match and 3-5 years with cliff vesting.


Gotta read the fine print of these vanishing tuition benefits. Many of them benchmark the amount they pay out to some percent of their own school’s tuition. It’s not necessarily 50% off the sticker price. I have seen some amazing sounding tuition benefits but the devil is absolutely in the details.

Hopkins pays 50%

 

[Arch Guillotti]

Do all these 401a, 457b 403b for W-2 earners reset in january 2025 in terms of contribution levels from your paycheck when you start in july or aug fresh out from residency in year 1 attendinghood?

I only ask since i do 1099 work I never actually contribute to my 2023 401k until 2024 mid october but i still get the deduction on taxes.

So for academics as a W-2 i think its 23k for 457 and 403 for 2024 limits. Does that mean someone starting in mid 2024 better contribute all that by end of 2024 from their paycheck otherwise they are out of luck and cannot fully get the maximum tax deductions for 2024?

They are annual contribution limits

 

[maxxor]

Hopkins pays 50%

That is the best one I’ve seen.

Penn is 40% of their own tuition rate which is $24,368.

NYU covers 90% of their own tuition, but only 8k per year for other places.

Emory is some percent of their own tuition and nothing outside.

It’s totally random and variable.

That said, JHU pay for rad is so sub market that I’m not sure the tuition benefit makes up for it 😆

 

[aneftp]

That is the best one I’ve seen.

Penn is 40% of their own tuition rate which is $24,368.

NYU covers 90% of their own tuition, but only 8k per year for other places.

Emory is some percent of their own tuition and nothing outside.

It’s totally random and variable.

That said, JHU pay for rad is so sub market that I’m not sure the tuition benefit makes up for it 😆

People are too focus on their pay without considering the total work load.

To me workload matters the most. These faculty staying at these academic places aren't stupid. Either 3-4 days working and extremely limited workload.

Now if you are a hustler, than definitely it's not the best job. That's why many worker bees leave academics because they are basically doing private practice type of work load for academic pay.

If someone told you get 450K for 2 days of clinical work and 2 non clinical days work in radiology and most Fridays off. Would you consider that a good deal? In addition to 2 weeks of CME and the usual paid time off? Those are the people who stay in academics.

 

[ambiturner]

That is the best one I’ve seen.

Penn is 40% of their own tuition rate which is $24,368.

NYU covers 90% of their own tuition, but only 8k per year for other places.

Emory is some percent of their own tuition and nothing outside.

It’s totally random and variable.

That said, JHU pay for rad is so sub market that I’m not sure the tuition benefit makes up for it 😆

Vanderbilt, WashU and UChicago have similar. Stanford kicks in a little.

Also have to consider how long you’re going to stick around to realize these benefits - using the Penn example, that’s about 100k per kid for the 4 years. If you work there 10 years that comes to 10k/yr, less if longer. By itself I wouldn’t call that a reason to stay in an academic job.

 

[maxxor]

People are too focus on their pay without considering the total work load.

To me workload matters the most. These faculty staying at these academic places aren't stupid. Either 3-4 days working and extremely limited workload.

Now if you are a hustler, than definitely it's not the best job. That's why many worker bees leave academics because they are basically doing private practice type of work load for academic pay.

If someone told you get 450K for 2 days of clinical work and 2 non clinical days work in radiology and most Fridays off. Would you consider that a good deal? In addition to 2 weeks of CME and the usual paid time off? Those are the people who stay in academics.

If I could find what you’re selling, I’d be buying. But I haven’t found that yet.

maybe I need to go even more rural…

 

[cchoukal]

People are too focus on their pay without considering the total work load.

To me workload matters the most. These faculty staying at these academic places aren't stupid. Either 3-4 days working and extremely limited workload.

Now if you are a hustler, than definitely it's not the best job. That's why many worker bees leave academics because they are basically doing private practice type of work load for academic pay.

If someone told you get 450K for 2 days of clinical work and 2 non clinical days work in radiology and most Fridays off. Would you consider that a good deal? In addition to 2 weeks of CME and the usual paid time off? Those are the people who stay in academics.

The problem is that the kinds of things you need to do to generate those two days of non-clinical time take way more than two days per week to actually do.

 

[IlDestriero]

The problem is that the kinds of things you need to do to generate those two days of non-clinical time take way more than two days per week to actually do.

Not always. I get academic time and have no productivity requirements. In my case it’s more like admin time.
Academia is extraordinarily variable. The pay, hours, what tracks they offer, what one FTE of clinical work is, what they require for promotion, what promotion is worth, benefits, retirement, etc.
One benefit they all seem to offer is lower call burden, and more career flexibility. I could cut back to 80% or even 60 clinical time. I’m not sure what percentage of PP groups would entertain that. Some come in at 80%.

 

[finalpsychyear]

In addition to Roth 403b and 457b, some places also have mechanisms for mega backdoor roth. That way one should max out the 403b and 457b with pretax contribution, and do the rest in MBR.

Hmm the one i saw regarding this situation for example both the 403 and 457 has a 23k limit each but you can do whatever combination into the pre tax and or the roth to come to the 23k amount.

For tax year 2024 the single 29 yo friend is going to end up having a gross of 230 by dec 31. In 2025 the likely gross will be in the 500-550 range after a full year of attending hood.

Isn't it a no brainer to do the 23k pretax in both the 457 and 403 and just do the backdoor roth of 7k to maximize income for 2024 and 2025?

 

[aneftp]

Hmm the one i saw regarding this situation for example both the 403 and 457 has a 23k limit each but you can do whatever combination into the pre tax and or the roth to come to the 23k amount.

For tax year 2024 the single 29 yo friend is going to end up having a gross of 230 by dec 31. In 2025 the likely gross will be in the 500-550 range after a full year of attending hood.

Isn't it a no brainer to do the 23k pretax in both the 457 and 403 and just do the backdoor roth of 7k to maximize income for 2024 and 2025?

If he’s single tax filer . Absolutely a no brainer to do pretax due to tax bracket being lower as a single person

If you are married on one single income in state institution in academics. A Roth option may actually make more sense since the 35% tax bracket doesn’t kick in till 465k. Vs 230k as a single person where the 35% tax bracket kicks in 200k earlier. Especially also living in no income state tax like Texas or Florida.

 

[kidthor]

Hmm the one i saw regarding this situation for example both the 403 and 457 has a 23k limit each but you can do whatever combination into the pre tax and or the roth to come to the 23k amount.

For tax year 2024 the single 29 yo friend is going to end up having a gross of 230 by dec 31. In 2025 the likely gross will be in the 500-550 range after a full year of attending hood.

Isn't it a no brainer to do the 23k pretax in both the 457 and 403 and just do the backdoor roth of 7k to maximize income for 2024 and 2025?

Personally I would max out any Roth option with a lower salary for a half year like that, especially for someone that early in their career. The tax bracket will certainly be lower in the 200s, and that Roth money can then be withdrawn tax free later on. It will have a lot of time to grow so it can be worth a lot... 23+23 even as a one time Roth contribution that early in savings would be fantastic.

Next year when they're in that 500+ category then I'd probably go for more of a tax-deferred + Roth mix.

 

[Status Sciaticus]

It’s 60k something for Stanford and Georgetown for my two nephews. So even either 50% off is 30k per kid. That’s a significant benefit especially with 2 kids in college.

If academics pays say low 400s getting tax free 60k is equivalent to 90k pretax

Pushing 500k in place where you won’t work more than 40 hours before overtime and limited calls.

That’s not bad

thats assuming that your nephews get into those colleges though,

The other thing to consider is whether the delta in income from academics vs private can earn better rates than a tuition discount when placed into an index fund.

 

[aneftp]

thats assuming that your nephews get into those colleges though,

The other thing to consider is whether the delta in income from academics vs private can earn better rates than a tuition discount when placed into an index fund.

Yes they got into those colleges.

I think people overthink benefits vs lost salary they could make in private sector.

If x job is working for u in academics with limited calls. It may be worth it to stay even excluding the Tuition subsidy for ur college age kids. I do not think it was a deciding factor in them staying in academics.

There are perfectly happy anesthesiologist people in Florida I tried to recruit to take the 30 weeks off job with me. Because they don’t like to be the MD taking ob call. So they are perfectly happy with their 8 weeks off so they can sleep in own bed at night plus their Hospital is 5 min from their house vs 30-35 min from their house.

 

[DrN2O]

Isn't it a no brainer to do the 23k pretax in both the 457 and 403 and just do the backdoor roth of 7k to maximize income for 2024 and 2025?

Mega backdoor roth limit is much higher than 7K. Depend on how your employer structure the 403 and 457, it's probably at least 23K. Someone else probably knows better here.

 

[Arch Guillotti]

Mega backdoor roth limit is much higher than 7K. Depend on how your employer structure the 403 and 457, it's probably at least 23K. Someone else probably knows better here.

Regular not backdoor.