Good info! Just want to add...you still pay state tax on your HSA.
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Only three states charge state taxes on money put into hsa. California New Jersey and Bama I believe
Good info! Just want to add...you still pay state tax on your HSA.
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Correct
So an HSA has triple tax benefits. Contributions, earnings, AND withdrawals are tax free. Seems best to pay for all medical expenses out of pocket. Don't touch the HSA until you're 65 and let the investments grow, just like a Roth IRA but better.
You pay taxes on non medical withdrawals after 65 as if it were a 401k. No penalty tax...just regular tax. But this is what I am doing myself. Max out 401k, Roth IRA, HSA. With company matches, I'm socking away over $30,000 a year with various tax benefits.
Every 30 years, assuming normal market conditions, you should expect your money to go 9-10X or so. Sock away the max for 10 years while you are young...and you can almost guarantee a reasonable retirement even if the pharmacy job market completely dies.
If there is one recommendation I give to every intern I have -- max everything out while you can. This career will only get less lucrative over time, but that doesn't mean you still can't retire on time.
There also just retiring in like Costa Rica or Albania, too, I guess.
all incomes are eligible for roth via backdoor, which is what the rphs here all doOut of curiosity how do many pharmacists qualify for a Roth IRA? I qualified my first year out of school because I only worked for half a year (became licensed in June/July). My second year I contributed ~5,000$, but I had to withdrawal it all because due to my income being over the threshold. I assume many individuals are over the limit and are no longer able to contribute to a Roth IRA?
Anyhow, this is what I am currently doing and I really have no idea if its a sound plan, so any advice would be greatly appreciated (all of my friends seem to be more interested in buying cars or going on international trips 2-3 times a year while here I am freaking out about retirement and not wanting to work until I'm 75).
401K - contributing 5% and company is matching 5% dollar for dollar
Annuity that was set up that is being managed by a investment group (not contributing anything to it, just letting it grow by itself)
403b - no longer contributing as this was from a past employer
Roth IRA - no longer contributing as my income is over the limit
ESPP - 5% of gross per paycheck
Whole life insurance (10% of net income per month) that is being used as a retirement shell. Company has had historical dividends of 5% annually, which sounds like a decent return to me?
Again any advice would be greatly appreciated
all incomes are eligible for roth via backdoor, which is what the rphs here all do
Most pharmacists can qualify just by maxing 401k and/or HSA contributions since they both lower MAGI.Out of curiosity how do many pharmacists qualify for a Roth IRA? I qualified my first year out of school because I only worked for half a year (became licensed in June/July). My second year I contributed ~5,000$, but I had to withdrawal it all because due to my income being over the threshold. I assume many individuals are over the limit and are no longer able to contribute to a Roth IRA?
Anyhow, this is what I am currently doing and I really have no idea if its a sound plan, so any advice would be greatly appreciated (all of my friends seem to be more interested in buying cars or going on international trips 2-3 times a year while here I am freaking out about retirement and not wanting to work until I'm 75).
401K - contributing 5% and company is matching 5% dollar for dollar
Annuity that was set up that is being managed by a investment group (not contributing anything to it, just letting it grow by itself)
403b - no longer contributing as this was from a past employer
Roth IRA - no longer contributing as my income is over the limit
ESPP - 5% of gross per paycheck
Whole life insurance (10% of net income per month) that is being used as a retirement shell. Company has had historical dividends of 5% annually, which sounds like a decent return to me?
Again any advice would be greatly appreciated
Most pharmacists can qualify just by maxing 401k and/or HSA contributions since they both lower MAGI.
What tax implications are those? Paying unnecessary tax because you chose not to max it out?
401(k) up to match > HSA > 401(k) up to max > anything else available (taxable brokerage, IRAs)
I met with a financial person a couple of years ago and was told that due to tax implications you should never max out y our 401K, you should only max out to meet the max match that your employer will put in. (do what every you need to do to get the highest employer match). Then anything after you would try to put into some kind of tax exempt shell (roth IRA), but since I don't qualify for the ROTH anymore we discussed the whole life insurance policy.
But this back door roth sounds interesting if I am reading it correctly and am able to withdrawal funds in retirement 100% tax free since I have already paid taxes on the money I would put into it.
Again, does this logic seem sound?
Also has anyone heard of this whole life insurance retirement shell?
Out of curiosity how do many pharmacists qualify for a Roth IRA? I qualified my first year out of school because I only worked for half a year (became licensed in June/July). My second year I contributed ~5,000$, but I had to withdrawal it all because due to my income being over the threshold. I assume many individuals are over the limit and are no longer able to contribute to a Roth IRA?
Anyhow, this is what I am currently doing and I really have no idea if its a sound plan, so any advice would be greatly appreciated (all of my friends seem to be more interested in buying cars or going on international trips 2-3 times a year while here I am freaking out about retirement and not wanting to work until I'm 75).
401K - contributing 5% and company is matching 5% dollar for dollar
Annuity that was set up that is being managed by a investment group (not contributing anything to it, just letting it grow by itself)
403b - no longer contributing as this was from a past employer
Roth IRA - no longer contributing as my income is over the limit
ESPP - 5% of gross per paycheck
Whole life insurance (10% of net income per month) that is being used as a retirement shell. Company has had historical dividends of 5% annually, which sounds like a decent return to me?
Again any advice would be greatly appreciated
Back door Roth IRAOut of curiosity how do many pharmacists qualify for a Roth IRA? I qualified my first year out of school because I only worked for half a year (became licensed in June/July). My second year I contributed ~5,000$, but I had to withdrawal it all because due to my income being over the threshold. I assume many individuals are over the limit and are no longer able to contribute to a Roth IRA?
Anyhow, this is what I am currently doing and I really have no idea if its a sound plan, so any advice would be greatly appreciated (all of my friends seem to be more interested in buying cars or going on international trips 2-3 times a year while here I am freaking out about retirement and not wanting to work until I'm 75).
401K - contributing 5% and company is matching 5% dollar for dollar
Annuity that was set up that is being managed by a investment group (not contributing anything to it, just letting it grow by itself)
403b - no longer contributing as this was from a past employer
Roth IRA - no longer contributing as my income is over the limit
ESPP - 5% of gross per paycheck
Whole life insurance (10% of net income per month) that is being used as a retirement shell. Company has had historical dividends of 5% annually, which sounds like a decent return to me?
Again any advice would be greatly appreciated
Back door Roth IRA
Backdoor Roth IRA - Bogleheads
Whole life insurance typically a bad deal and a scam for a LOT of people. Drop this sh1t now and use term life insurance only.
Why Whole Life Insurance Is a Bad Investment
Max your 401k and dump whatever $ you have to loans after saving 6 months-1 yr emergency funds. Tax deferred funds is use it or lose it, once you miss it a yr, you won't be able to contribute to it missing out on compounded returns, and tax saving for that yr. It goes beyond that, 401k funds is normally protected from lawsuit, bankruptcy.
So I got home from work and I double checked some of the paper work for the policy I have. For 30 years I would have paid 167,853.30 but I have a guaranteed cash surrender value 236,097. That is like a 40% difference. Obviously this isn't the only retirement account I am using, just 1 piece of the pie.
I am going to set up a meeting with them again to go over everything.
Getting 167k to 236k after 30 years, that's a compounded return of 2%/yr. You will have gotten close to $700k after 30 yrs if you just stick with S&P 500.So I got home from work and I double checked some of the paper work for the policy I have. For 30 years I would have paid 167,853.30 but I have a guaranteed cash surrender value 236,097. That is like a 40% difference. Obviously this isn't the only retirement account I am using, just 1 piece of the pie.
I am going to set up a meeting with them again to go over everything.
You’d be surprised... I was at a group dinner with some friends and some people I didn’t know. One of those I didn’t know was a financial advisor and he straight up told everyone at the dinner to NOT invest in 401k. I was trying to argue with him, but then everyone turned on me and made snide comments like “how are you going to argue with a professional.” Professional my ass. I just kept quiet after that. Let them be ignorant.If you insist on a financial adviser, find one that is a fiduciary. I have a feeling that the one you have now is not. Especially if they tell you that maxing 401k is a bad idea. That is completely nonsense and any fiduciary financial professional will tell you this.
Also, I don't have to backdoor because I file jointly and our income is pretty much right under the limit for a married couple. ($185k) But if it was above that limit...I'd backdoor.
You’d be surprised... I was at a group dinner with some friends and some people I didn’t know. One of those I didn’t know was a financial advisor and he straight up told everyone at the dinner to NOT invest in 401k. I was trying to argue with him, but then everyone turned on me and made snide comments like “how are you going to argue with a professional.” Professional my ass. I just kept quiet after that. Let them be ignorant.
Getting 167k to 236k after 30 years, that's a compounded return of 2%/yr. You will have gotten close to $700k after 30 yrs if you just stick with S&P 500.
When you set up a meeting, it should be you trying to close the account, stop contribution, and pay the surrender fee. Asking more questions will only feed you with all the advantages of whole life, but they will never tell you the negatives. Then, you will succumb and stay with them for the next 30 yrs. I've seen this movie many times. Debunking The Myths Of Whole Life Insurance | The White Coat Investor - Investing And Personal Finance for Doctors.
They are making a lot of money off him. They'll take him out to Ruth's Chris to convince him to stay.
My friend is 4 years into a whole live policy .... Not sure what happened / why she signed up, but I'm not sure what the best course of action it. Cash value is only 20K and she paid in like 30K so far (ballpark)
I think it may be worth it to keep paying for another few years until she interest/dividends pay the monthly premium, but not sure. I'm not sure what the penalty is for cancellation or anything like that... Thoughts from the forum?
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all incomes are eligible for roth via backdoor, which is what the rphs here all do
There is no income limit to do BACKDOOR Roth IRA.No, AMT incomes ($412k+ for couples) are disqualified from doing this.
There is no income limit to do BACKDOOR Roth IRA.
Made more than 2 weeks salary today alone lol... loving it.
Anything that jumps, I get the return :-D Index for the win
Made more than 2 weeks salary today alone lol... loving it.
Anything that jumps, I get the return :-D Index for the win
More than that. Market is up a lot just for January. At this point, market can go down 30% and I'll lose more than 300k but that's investing; it's part of the deal. Meet Bob the worst market timer. Even we have a few crashes a long the way (or today is the market peak of the decade), I'll easily 5x this number with NO new contribution by the time when I retire. It's time in market, not market timing. The sooner you realize this, the better off you are. Stay the course.Wow! How much do you need invested for that? 500k? 1 mil?
Hey, xxx jump 200% premarket. Irrelevant.Netflix is up 10% premarket while the s&p is flat so did you?
More than that. Market is up a lot just for January. At this point, market can go down 30% and I'll lose more than 300k but that's investing; it's part of the deal. Meet Bob the worst market timer. Even we have a few crashes a long the way (or today is the market peak of the decade), I'll easily 5x this number with NO new contribution by the time when I retire. It's time in market, not market timing. The sooner you realize this, the better off you are. Stay the course.
Hey, xxx jump 200% premarket. Irrelevant.
Winner takes all economy. Indexing means the top 50 holdings are the largest market cap companies. As they get bigger and more profitable, the index owns more and more of them. Buying an index means you are holding majority of winners to begin with because the index is cap weighted, not equal weighted. It's a no brainer.
Sorry, you got butt hurt so much with 100% indexers like me making money not doing jack sh1t playing video games in their underwear for the past 9 yrs and the next 30 yrs doing absolutely nothing. It's investing, keep it simple. Boring and slow? Yes. Making tons of money over the long term? Absolutely.
It's ok that you continue missing out
And that's ok that those briefs could have been made of gold.Yes, I am really missing out in my underwear relaxing [chuckle].
/continues to ignore ignorant comment :-D
k? so?And that's ok that those briefs could have been made of gold.
Oh and this market isn't going down just 30%. It's going below previous highs before last times crash.
k? so?
How far are you predicting a crash...and based on what?And that's ok that those briefs could have been made of gold.
Oh and this market isn't going down just 30%. It's going below previous highs before last times crash.
100 years stock market history said differently.We're going to have another lost decade, telling people to index is a horrible decision.
100 years stock market history said differently.
It's liberating once you know the long term trend. No one should care about the short term volatility unless they are retiring in the next 5 years. Buy buy buy even during the market peak and never ever sell.
Depends on what you use. Shiller pe shows over 50% in order to get back to average. Obviously some like to use average to determine the future so based off that, those people should want to use it to determine a crash too.How far are you predicting a crash...and based on what?
The majority (>50%) lose to the market over time if they are picking their own stocks. Of course you can cherry pick stocks that have crushed the market. The thing is can the minority of people who consider themselves experts/above average do that consistently? It seems research and history has shown they can't. Getting in and out at the right times etc is not easy. Making money and beating the market seems easy in a bull market.
I would love picking individual stocks if I knew I could win. I don't and won't. For the several I have been right on, I have been wrong on others. I also don't know if I actually held the stock if I would have sold much earlier in the ride up to the current levels or if I would have held strong.
I'm perfectly happy with 6% gains long term. I should get 8-10% in the market based on history. I'll have more then enough to retire in my 50's with 5-6% and retire comfortably with lots of traveling and money left to children. I have no reason to be more greedy.
What's to protect if I'm gonna 10x my money while I sleep? ZzzzzzzzzIt's not just about stocks, it's about protecting your hard earned money. There's more out there then simply getting into stocks.
The ten year treasury is at 2.65, this is going to 3 and probably 4. At some point this will hurt stocks.
The dollar is falling and probably going to 80.
There are markets out there with much better balance sheets that are going to continue performing when we crash.
Again there's so much more out there. People have to understand we aren't going to stay at these extreme valuations.
What's to protect if I'm gonna 10x my money while I sleep? Zzzzzzzzz
Who cares about short term? I'm not short sighted and I don't fail to read long term trends.
Data shows yearly dca investor at market peak then bear market immediately (10 yrs span) makes boat load of money. Don't believe me? Input the number yourself.I'm talking about investors in general. What's going to happen is a new investor is going to see no returns because they are indexing and might just stop and put it in the bank.
As for you, well if I can't open your eyes then that's fine.
Data shows yearly dca investor at market peak then bear market immediately (10 yrs span) makes boat load of money. Don't believe me? Input the number yourself.
Totally wrong since you haven't put that number yourself. One of these days I'll do it for you.What I'm saying is a new investor might get frustrated with their returns over these next ten years and give up on the market. If they were open to other ways of investing, they wouldn't get frustrated.
Anyone who started during the lost decade in 2000, made like 1% annualized over the next ten years assuming they invested the same each year.