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When to open extra Retirement Account as a starting PGY-I?

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  • When to open extra Retirement Account as a starting PGY-I?

    My program offers (a) default to Social Security (6.25% withdrawal) w/ no match or sign a form for (b) Deferred compensation (7.5%) w/ no match that I can roll over. During orientation, there was a third option about 403b w/ no match. From my understanding, I'll be signing up for Deferred compensation and then add as much to the 403b? Or do I just do deferred compensation and then open an outside Roth IRA? What's the timeline of opening these accounts? I am very confused. I just know I need to do option A or B by end of July.

    Thanks!


  • #2
    I coukd be confused but 6.2% is reffering to the social secruity tax, correct? This would not be optional.

    If I understand that correctly, then the question is deffefed compensation vs 403(b) vs Roth IRA. The decision between 403(b) vs Roth IRA is covered fantastically in a recent WCI blog post. In general Roth IRA for residents. If you are pursuing PSLF or are receiving a larger REPAYE subsidy, traditional 403(b).

    If pretax contribtions are more beificial for you, you need to look in great detail into the deffered compensation plan. You should understand who owns the money, what is the financial status of the institution, what would happen to the money if the institution went bankrupt, what are the investment options, and what are the distribution options. Once you can answer all these questions you can make the decision. Deffered compensation plans do not have the age 59 1/2 penalties, so when you find a good one they can be great.

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    • #3
      I’m sorry, but your post doesn’t have enough info to provide helpful info without a lot of reading between the lines. Fwiw, going by the information you provided, it doesn’t appear that any of your accounts are subject to risk of forfeiture. A NPO 457b, otoh would be.
      Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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