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Fellow Advice – Convert 403b to Roth

Home Retirement Accounts Fellow Advice – Convert 403b to Roth

  • Avatar ReconDoc2020 
    Status: Physician
    Posts: 1
    Joined: 08/13/2019

    Hey WCI folks,


    So a personal advice question. I’m an orthopaedic fellow currently (August 2019-July 2020). Our situation is a current stay-at-home wife, non-physician, and we stand to make about ~$90k gross in 2019 accounting for my fellow salary and stipend for my next job (already signed). 2019 will be our lowest earning year (hopefully!) for probably the next 20-30 years. We both had 403b accounts at our previous job/residency, and this amounts to about $30k combined. We recently sold our home where I did residency (I know, not necessarily supposed to have a home during residency, but I was there for 9 years) and we were fortunate to sell it and make a decent profit. We do have about $60k saved from the home sale to 1) max out 2020 Roths at the beginning of the year ($12k earmarked) and 2) a decent chunk for a down payment on our next house following fellowship.


    My current plan is to roll over these 403b’s into our Roth accounts (since we are no longer employed) and intend to pay the tax burden out of that $60k. Would anyone have any cautions or advice in this regard?


    Thanks for reading/replying

    #238692 Reply
    jfoxcpacfp jfoxcpacfp 
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8366
    Joined: 01/09/2016

    For only $30k on income of $90k, it appears to make sense. Usual caveat that this is general advice only and there is a lot I don’t know about your current tax situation.

    On another note, I wouldn’t automatically default to buying a house right after fellowship. Just because the last one worked so well (and congratulations on that!) doesn’t mean the next job won’t work out and you leave after a couple of years or even find a neighborhood you like better. You might be surprised at how many docs I talk to who are “iffy” after the first year.

    Johanna Fox Turner, CPA, CFP: I am not your financial advisor; any responses are for general purposes only ~ [email protected]

    #238805 Reply
    Avatar Peds 
    Status: Physician
    Posts: 4715
    Joined: 01/08/2016

    Nope. Convert this year.

    #238806 Reply
    Faithful Steward Faithful Steward 
    Status: Financial Advisor, Small Business Owner
    Posts: 519
    Joined: 06/12/2017

    Plan sounds fine. Great idea to pay the conversion taxes in what will be your lowest tax-rate year for the foreseeable future.

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors | (717) 496-0900

    #238832 Reply
    The White Coat Investor The White Coat Investor 
    Status: Physician
    Posts: 4637
    Joined: 05/13/2011

    I agree, convert it.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #239388 Reply

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