To piggyback the previous Kaiser TPMG post, are there any SoCal Kaiser docs here? I graduated residency a few years back and recently switched to SCPMG full time. Frankly, I think it is the best job I could’ve landed to set my family and I up long term with all their benefits and would never imagine I’d be making the pay that I do with them as an FP physician. Just wondering if anyone felt the same and what your thoughts were on the questions below.
1. The Common Plan gives 2% (of highest average salary) per year of service for the first 20 years, then 1% per year. If I have 27 years of service, stop at 60, and start distributions at 65, with my highest average salary being $24600/mo, if my calculations are right, I’d be getting $11562/mo. Now does this come with a COLA of any sort to help offset inflation during retirement or is it pretty much a set monthly pay? If there is no COLA, essentially the value of the plan would decrease over time with inflation. Right?If this was the case would it be beneficial to just take a lump sum at the onset and invest a portion to offset inflation.
2. What are your opinions of the prospect of insolvency of SCPMG over the next 30 years. <1% <5% etc.
3. If there are any SCPMG doctors out there in or near retirement will you be or are you below, at, or above the tax bracket of your highest paid working years? Just wondering because I was thinking of performing Roth Conversions if I retired at 60 up until age 70 (before SS would kick in). Doing this at a lower tax bracket in retirement would save on taxes on conversion and at the same time turn 401k money into Roth money for better diversification of my retirement accounts.
4. Currently I max out their traditional 401k and elected the Keogh Plan at 100% contribution if I make partner (God willing). Additionally, I max out a Backdoor Roth and contribute a lump sum to a 529 plan each year. My wife maxes her traditional 401k and a Backdoor Roth as well. Just wondering if any SCPMG physicians do the same or different? Like has anyone done a Mega Backdoor Roth?
5. In my 401k I invest in the Vanguard TDF 2060 because It has the 90:10 asset allocation I am comfortable with, low .06% ER (would be .16% ER for investor shares at Vanguard), and it is the only cheap option in the plan that gives me international exposure for diversification. However, they do have institutional shares of Vanguard Total Stock and Total Bond Market at .02% and .04% ER, respectively. Does anyone spread these investments across their accounts, like put all their 401k contributions into the Total Stock Market option and put Total International and Bond Markets into their Roths? Just wondering what other physicians do.May 16, 2017 at 2:36 am MST #47290
1. not sure about COLA but i know there are many ways to take distributions, one might in COLA, survivor benefits, etc. you can always call HR to clarify, there # is listed in the benefits handout.
2. who knows. constant change, tech advances, insurance coverage….impossible to guess. probably very low however. although for history look back at the late 90s when bankruptcy was very possible.
3. if you land in lower brackets then yes convert. if you dont drop then…congrats.
4. that is likely the correct path with some people choosing after a certain amount (1-2 million?) switching to roth as the RMDs become so large anyways. since the keogh portion is pretax not aftertax, doing a megabackdoor rIRA would involve paying tax on that amount anyways, so not beneficial. also dont think they allow rollovers but unsure.
5. it makes no sense why there is no separate total intl stock index fund. the institutional TDF are great as a simple set and forget with rock bottom prices. you just need to be ok with intl bond and 40% intl stock. you can easily balance this out in a a roth IRA once funds are large enough. if you are comfortable managing yourself you just need to find a place for intl stock somewhere else. also would probably put bond in the TSR and not rIRA.May 16, 2017 at 8:46 am MST #47306G-pathyParticipantStatus: PhysicianPosts: 108Joined: 01/10/2016
They’ve revamped the website that lets you play around with common plan assumptions:
Use your NUID and SSO to get on and play around. It’s pretty satisfying.
There is an additional component to consider which is “early separation.” This allows you to retire anytime after 58 and start collecting an income equivalent to your pension at that point. You aren’t actually collecting your pension so it is not reduced by the actuary tables. Most SCMPG physicians should retire at 58 if you are past the 2% years. At that point, working part time anywhere (including at SCMPG potentially) is going to be equivalent. As a primary care physician, you’re pretty likely to be burned out by 58 and ready to be done. IMO, you should plan to retire at that age so you can if you need to.
The offerings inside the 401k and Keogh are problematic because of the lack of an total international stock fund and the various high cost funds. But, you really don’t need to do anything beyond the TDF 2060 at 0.06%.
The common plan is not indexed to inflation. Think what would happen in a period of high inflation (it could bankrupt health plan).December 31, 2017 at 6:41 pm MST #94264Hober MallowParticipantStatus: Other Professional, SpousePosts: 37Joined: 01/01/2018
There is a lack of good international index funds in the 401k and Keogh plans. However, the Keogh has a brokerage option called the Personal Choice Retirement Account (PCRA). You can buy any ETF (or even individual stocks) you want. Schwab ETFs are commission free. All other trades are $4. My wife owns a fair bit of SCHF and VSS in hers.January 1, 2018 at 5:59 am MST #94274KPInvestorParticipantStatus: PhysicianPosts: 76Joined: 10/16/2017
I think it will be difficult to know if someone will be in the same, higher or lower tax bracket in retirement. Depends on many factors. If you plan on retiring at 60, then you will collect money for early separation until 65. Thus you might consider postponing your common plan until a few years after 65 to reduce your income during those years to do some conversions.
Also I do not think you can take a one time lump sum. I believe the closest thing you can do to a lump sum is a 5 year distribution.
also if your monthly is 24,600 now, I would expect that to be much higher when you are ready to retire.January 1, 2018 at 12:56 pm MST #94413
Side question for tax purposes: Do any of you know if you are able to convert the Keogh Plan directly to a Roth IRA account in retirement or via a direct rollover to an IRA with the subsequent conversion into a Roth?January 17, 2018 at 8:50 pm MST #97546January 18, 2018 at 8:16 am MST #97589
As a new associate, can I do a mega backdoor roth IRA? That is, after putting the full 18.5k in the 401k, can I make after tax contributions and do an inservice distribution to roth IRA up to the 54k limit?
I know that once I become partner, it would no longer make sense since all 54k would go to pretax 401k and keogh.March 24, 2018 at 12:52 pm MST #112689
i dont believe the TSR allows this.March 24, 2018 at 2:09 pm MST #112708
I talked to Charles Schwab inquiring about doing a Mega Back Door Roth as an associate. Unfortunately the plan does not allow for it.March 24, 2018 at 3:30 pm MST #112723
If we requested these things be added to the plan, how likely is that to happen?March 24, 2018 at 9:19 pm MST #112764nachos31ModeratorStatus: PhysicianPosts: 426Joined: 01/12/2016
Ooh ooh, where’s @Wally World?! Here’s a thread for him!March 25, 2018 at 8:25 am MST #112806
If we requested these things be added to the plan, how likely is that to happen?Click to expand…
intl? probably not that hard.
after tax roll overs? probably not as easy given paperwork, etc.March 25, 2018 at 8:29 am MST #112807Wally WorldParticipantStatus: PhysicianPosts: 37Joined: 01/08/2016
Ooh ooh, where’s @Wally World?! Here’s a thread for him!Click to expand…
Thanks for the nod, but I’m not going to be much help here. I work for Northern California Kaiser (ie TPMG). TPMG and SCPMG (Southern California Kaiser) are totally different entities and are structured in very different ways.
While some things are similar (example, both provide pensions, called “Plan 1” in TPMG and the “Common Plan” in SCPMG), many things are very different (different 401k providers and investment options, matching, vesting schedule for pensions (after 5 years at TPMG, 10 years at SCPMG, etc)).
As far as I understand things, TPMG is a corporation and SCPMG is a partnership. There are pros and cons of each different set-up. SCPMG has a Keogh plan, TPMG doesn’t. Recently, there was a presentation at our medical center on the differences between the two entities. I think this came up since people in NorCal were asking about restructuring as a partnership to be able to take advantages of the changes in the tax plan. Ultimately, the higher ups decided against making the change due to liability concerns (the corporate structure protects the physicians better?) and due to that it would be a large taxable event for shareholders in TPMG (ie all senior physicians) on the order of hundreds of thousands of dollars. I was fielding a call from the ED in the back of the room during part of the presentation, so I may have missed some details.
At TPMG, doing the Mega Back Door Roth in plan conversion of any after tax contributions is allowed and quite an easy thing to do. I don’t know if there is something about the nature of SCPMG (either the partnership structure or just how the 401k is set up) that precludes this down there.