Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Newbie - Seeking Advice
Old 01-15-2012, 11:08 PM   #1
Confused about dryer sheets
Join Date: Jan 2012
Posts: 3
Newbie - Seeking Advice

Hi all,

I've been a lurker here for the past 5 years and have learned a lot from everyone on this forum. I have a few questions I wanted to ask and I apologize in advance if this has already been addressed in another thread.

I'm (29) a physician-in-training (resident) and will be graduating on June 30, 2012. I will be an attending physician working in the same academic hospital I trained at starting on Sept 1, 2012. I love what I do and love the amazing things my coworkers have been able to do for patients, and lastly, I'm just glad I've survived training thus far. I'm also glad I've been lucky to read the discussions on this forum which has helped me with my financial planning. I don't know if I want to retire early but I do want to be financially independent so I can focus on my clinical research. I don't spend much and don't plan to. I rent a hospital-subsidized, single bedroom apartment in NYC for $1300/mo including utilities except for electricity ~$35/mo. My hospital will continue to let me stay in this apartment as an attending physician. During residency training, I've contributed to my Roth IRA and my hospital's 403b. I was wondering if, after I max out the 2012 403b limit ($17k) by June 30 2012, it would be a good idea to convert 100% of the 403b that I've contributed in residency training into a Roth IRA this year. (My residency 403b plan is separate from my attending physician 403b plan and because they are considered separate plans and jobs I am eligible to rollover the residency 403b plan into a Roth IRA once I graduate.) I understand I will be paying upfront taxes on this conversion, but I feel that this year will likely be the only time where my tax bracket is lower than my future tax bracket for awhile because I will soon no longer be paid a resident salary. I think conversion to Roth IRA in my situation may be smarter thing to do but I would love to get feedback. I can pay for the upfront tax but want to know if this is a smart move, financially speaking.

Single (29), No spouse, No kids
Chief Resident annual salary ($62k) - Graduate June 30, 2012.

Roth IRA $60k (I began contributing to my Roth IRA ($5k) since 2007. In my first year as an intern in 2007/8, I was at a different hospital for which I maxed out my 403b contribution for 2007 ($15.5k) and 2008 (15.5k) and subsequently fully converted that into Roth IRA before moving on to my current hospital for my specialty residency training) AA: VTIAX 30% VTSAX 60% VBMFX 10%

403b: $50k AA: VTIVX 100%
Cash: $350k (I received an inheritance)
Taxable Stocks/Bonds Accounts: $0

Debt: $0 (I went to a public state school for college and medical school and was fortunate to have my parents help me out with school tuition)

I don't own a car. I love the NYC subway. Ok, maybe not love but it's convenient and public transportation is better for the environment.
I don't own property but plan to look for an apartment to buy in NYC in a few years. A single bedroom in upper west or midtown can be around $700k and then there's the monthly common charge which can be more than the rent I currently pay.

Hospital-subsidized 1 bedroom apt: Rent is $1300/mo including utilities except elect. (I live 5 minutes walking from my hospital and plan on staying where I live after I graduate to become an attending physician)
Electricity: ~$35/mo
Cellphone: ~$80/mo
Cable/Internet: ~$80/mo
Transit: $125/mo subway credit (I get transit tax credit)
Food: ~$100-200/mo?? Not sure. As a resident, I don't eat much but we do get free food when we're on-call or if we have morning conference or noon conference.

Disability and Life Insurance: I sought out specialty-specific disability insurance and 20/30-year premium term-life insurance policies last month because I hear it is cheaper to get this while you are young and are a resident, but I have a chronic medical condition that I acquired perinatally and no insurance companies are willing to cover me. Or if they do, it is double or triple the premium. My hospital offers group disability and life insurance which aren't that great but it's better than nothing. Not sure what I can do about this, but I feel like I tried my best and I am at peace with this.

Malpractice insurance: My hospital provides it for me free.

Attending starting salary ($255k) - Starting Sept 1, 2012.

My other question is, as an attending, my hospital offers me a couple benefits, a 403b plan ($17k) and a 457 plan ($17k). My hospital will also contribute to my 403b plan:

5% of my salary up to the Social Security wage base ($110,100 for 2012), then
10% of my salary above the Social Security wage base.

They also offer a high deductible health insurance plan for which I can contribute money to a HSA ($3100). I plan to max all this out (403b, 457, HSA) as well as a backdoor IRA since I will no longer be eligible to contribute to a Roth IRA directly this year. Ok.. so my question is, are there any other tax advantaged accounts I am eligible for but that I am missing? Are the only options I have to save in taxable accounts?

toothpick is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 01-16-2012, 05:48 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jun 2005
Posts: 8,951
I'd ask your questions over at Bogleheads • View forum - Investing - Help with Personal Investments of which about half the members are physicians.

LOL! is offline   Reply With Quote
Old 01-16-2012, 07:12 AM   #3
Thinks s/he gets paid by the post
grumpy's Avatar
Join Date: Jul 2004
Posts: 1,321
Just a note - I believe that you cannot convert directly from a 403B to a Roth. You must first rollover from the 403B to a traditional IRS and then convert the traditional IRA to a Roth. Ultimate result is the same; it just takes two steps.
__________________ can check out any time you like, but you can never leave...
grumpy is offline   Reply With Quote
Old 01-16-2012, 12:45 PM   #4
Confused about dryer sheets
Join Date: Jan 2012
Posts: 3
LOL!- Ok, thanks I will ask there.

Grumpy - You're right. What I mean is rollover 403b to IRA than convert to Roth IRA.
toothpick is offline   Reply With Quote

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads
Thread Thread Starter Forum Replies Last Post
Backdoor Roth IRA contributions still allowed in 2012, right? soupcxan FIRE and Money 35 02-12-2012 10:52 PM
How to evaluate Roth IRA vs TIRA in this case? Tom52 FIRE and Money 5 01-11-2012 03:43 PM
Can I do a Roth IRA conversion if my AGI is over the Roth limit? starsfan18 FIRE and Money 20 01-03-2012 02:39 PM
Using tax loss harvesting to fund Roth IRA? sailor FIRE and Money 10 11-23-2011 08:31 PM
Convert 401k funds to a non-taxed IRA? nico08 FIRE and Money 7 08-21-2011 01:20 PM


All times are GMT -6. The time now is 10:34 PM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2018, vBulletin Solutions, Inc.