Retirement planning?

[brotherbloat]

I know that residency offers a tight salary with most residents living paycheck-to-paycheck. Just out of curiosity, how many residents out there have been able to save anything for retirement? Anyone contributing to their 403b? Anyone able to contribute to a Roth IRA? Or, is this the last thing on the mind of busy, cash-strapped residents?

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[MAC10]

I know that residency offers a tight salary with most residents living paycheck-to-paycheck. Just out of curiosity, how many residents out there have been able to save anything for retirement? Anyone contributing to their 403b? Anyone able to contribute to a Roth IRA? Or, is this the last thing on the mind of busy, cash-strapped residents?

I contruibute to my 403b rather than paying social security. I think its a great idea. Ive had it since day one of residency so I dont miss the money. Its taken out pre-tax (lowers your taxable imcome). Its put into an accont that you can monitior. We have to option to take the money out once we finish our residency or roll it over into another type of savings plan. Our employer invests it for us but they also provided a portfolio of other more aggressive investments where we can move it if we feel daring. I figure I will leave with at least 10k that i will use to jump start my new life. Im THRILLED with it. I say to heck with social security this is what retirement savings should be, i hope to never pay another dime into SSI. If you have the oportunity to do it, yes, you may pay a little more than you would if you just paid social security, but trust me you wont miss the money, you will have to opportunity to invest the money and make more interest if you choose, you will see your money in an account and know where its going, and social security prob wont be there for you anyway..its win win.

 

[southerndoc]

I contribute 12% of my salary to a 403(b) and max out a Roth IRA every year. I highly recommend it if you can.

 

[edmadison]

I contruibute to my 403b rather than paying social security. I think its a great idea. Ive had it since day one of residency so I dont miss the money. Its taken out pre-tax (lowers your taxable imcome). Its put into an accont that you can monitior. We have to option to take the money out once we finish our residency or roll it over into another type of savings plan. Our employer invests it for us but they also provided a portfolio of other more aggressive investments where we can move it if we feel daring. I figure I will leave with at least 10k that i will use to jump start my new life. Im THRILLED with it. I say to heck with social security this is what retirement savings should be, i hope to never pay another dime into SSI. If you have the oportunity to do it, yes, you may pay a little more than you would if you just paid social security, but trust me you wont miss the money, you will have to opportunity to invest the money and make more interest if you choose, you will see your money in an account and know where its going, and social security prob wont be there for you anyway..its win win.

Right -- but there are very few people who have that option. If I recall correctly opting out of SSI is something reserved for certain municipalities/state government. So unless you plan on never going into private practice, you better get used to paying SS tax.

Ed

 

[MAC10]

Right -- but there are very few people who have that option. If I recall correctly opting out of SSI is something reserved for certain municipalities/state government. So unless you plan on never going into private practice, you better get used to paying SS tax.

Ed

Yeah, sad aint it. I would be so happy with this model for social security reform.

 

[GeneGoddess]

I know that residency offers a tight salary with most residents living paycheck-to-paycheck. Just out of curiosity, how many residents out there have been able to save anything for retirement? Anyone contributing to their 403b? Anyone able to contribute to a Roth IRA? Or, is this the last thing on the mind of busy, cash-strapped residents?

Grad students aren't eligible for retirement accounts (which TOTALLY bites), but I've been maxing out my Roth since 2000. And that's on an $18K/yr grad student stipend. This summer, I'll be a (less) cash strapped resident, and I plan to continue maxing out my Roth ($4000/yr) and trying to contribute to my 403B (though my program doesn't match). Someone suggested doing it at the beginning, and you'll never "miss" the money. That's true. You can have the 403B directly deducted from your paycheck (like income tax), and you can do something similar with an IRA (Roth is probably better). I use Fidelity, but I've heard great things about VanGuard. You can set it up so that up to $333.33 can be deducted from your bank account every month. Even if it is just $50-100 ($600-1200/yr), it's still better than nothing.

 

[docB]

Right -- but there are very few people who have that option. If I recall correctly opting out of SSI is something reserved for certain municipalities/state government. So unless you plan on never going into private practice, you better get used to paying SS tax.

Ed

I'm not sure if it's that uncommon. I did residency with the U of CA and they had this thing called the Deferred Compensation Plan that all of the employees did. No social inferiority. When I left I was able to roll it over into an IRA.

 

[MAC10]

I'm not sure if it's that uncommon. I did residency with the U of CA and they had this thing called the Deferred Compensation Plan that all of the employees did. No social inferiority. When I left I was able to roll it over into an IRA.

Yep my deal is called the Deferred Compensation plan, when I filed my taxes it was referred to as a 403b, i think they are the same.

 

[edmadison]

I'm not sure if it's that uncommon. I did residency with the U of CA and they had this thing called the Deferred Compensation Plan that all of the employees did. No social inferiority. When I left I was able to roll it over into an IRA.

I meant uncommon when considering the population as a whole. I'm sure its less than 5%. The rule applies to certain state and municipal workers assuming that there is an alternative.

Ed

 

[DrMom]

I contruibute to my 403b rather than paying social security. I think its a great idea. Ive had it since day one of residency so I dont miss the money. Its taken out pre-tax (lowers your taxable imcome). Its put into an accont that you can monitior. We have to option to take the money out once we finish our residency or roll it over into another type of savings plan. Our employer invests it for us but they also provided a portfolio of other more aggressive investments where we can move it if we feel daring. I figure I will leave with at least 10k that i will use to jump start my new life. Im THRILLED with it. I say to heck with social security this is what retirement savings should be, i hope to never pay another dime into SSI. If you have the oportunity to do it, yes, you may pay a little more than you would if you just paid social security, but trust me you wont miss the money, you will have to opportunity to invest the money and make more interest if you choose, you will see your money in an account and know where its going, and social security prob wont be there for you anyway..its win win.

good luck on your next audit. 403b is not in lieu of social security taxes. The money that you put in the 403b is not subject to income tax, but there is no exemption of social security taxes. Also, you will pay income taxes on the 403b $ when you retire.

You need to talk with a financial planner so that you don't get yourself in trouble.

 

[cabby]

I meant uncommon when considering the population as a whole. I'm sure its less than 5%. The rule applies to certain state and municipal workers assuming that there is an alternative.

Ed

I didn't know this existed so I checked the Britannica of our day Google.

Turns out about 5 million people (state and local employees) are exempt because when Social Security was set up it didn't include public employees. Originally all federal and tax-exempt non-profit employees did not have to pay social security either, but the last time they 'reformed' social security in 1983 they made it mandatory for them to pay in. And guess what is being considering for this round of reforms... mandatory inclusion for all state and local employees too.

MG

 

[MAC10]

good luck on your next audit. 403b is not in lieu of social security taxes. The money that you put in the 403b is not subject to income tax, but there is no exemption of social security taxes. Also, you will pay income taxes on the 403b $ when you retire.

You need to talk with a financial planner so that you don't get yourself in trouble.

I AM exempt form social security tax ....

I just filed my taxes, reported everything and im still sitting on a fat $2,500 return. When we applied for the defered compensation plan, we were given the option of paying 12% of our income into the plan, like southerndoc mentioned, or paying into social secuity at a lower percent 7% if I remeber correctly. So NO i didnt not pay ANY social security tax and the goverment knows about it, hell i work for the government and they offered me the deal. Also I can take the money out whenever I stop working for the government (ie at the end of residency) not when I retire, without penalty and pay taxes at that time OR roll it over into another savings plan without paying taxes at that time. How is SS working for you oh youre a med student

 

[DrMom]

I AM exempt form social security tax ....

I just filed my taxes, reported everything and im still sitting on a fat $2,500 return. When we applied for the defered compensation plan, we were given the option of paying 12% of our income into the plan, like southerndoc mentioned, or paying into social secuity at a lower percent 7% if I remeber correctly. So NO i didnt not pay ANY social security tax and the goverment knows about it, hell i work for the government and they offered me the deal. Also I can take the money out whenever I stop working for the government (ie at the end of residency) not when I retire, without penalty and pay taxes at that time OR roll it over into another savings plan without paying taxes at that time. How is SS working for you oh youre a med student

I have worked for many years and am probably notably older than you are. My husband is a financial advisor (and has been for 14 years) and everything he has read disagrees with what you are saying. I was trying to help you out, but for your sake I hope you're right b/c otherwise the government will get you later...with interest, too.

 

[MAC10]

I have worked for many years and am probably notably older than you are. My husband is a financial advisor (and has been for 14 years) and everything he has read disagrees with what you are saying. I was trying to help you out, but for your sake I hope you're right b/c otherwise the government will get you later...with interest, too.

Thanks for your concern, but believe it or not all ive said is true, set up by my employer (the state) not my imagination. If you read all the other replies to this thread you will see that others also know what im referring to. If your husband keeps reading he shall find..

 

[southerndoc]

Thanks for your concern, but believe it or not all ive said is true, set up by my employer (the state) not my imagination. If you read all the other replies to this thread you will see that others also know what im referring to. If your husband keeps reading he shall find..

Some residency programs are exempt from social security taxes. However, the vast majority (99%) are not exempt, and nearly all 403(b) contributions are exempt from federal taxes, but not exempt from social security taxes.