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Retirement account order

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  • Avatar WuzUpDoc 
    Participant
    Status: Spouse
    Posts: 35
    Joined: 11/03/2018

    I’m starting my first job in August and our goal is to save 30% of gross towards retirement. That should be around $28k for this year. I just need help to make sure we’re putting it in the right accounts/flow buckets.
    For this year I’m thinking:
    $19k to employer fund.
    $4500 to Roth IRA
    $4500 to spousal Roth IRA

    For first full year with approx $70k towards retirement:
    $19k to employer fund
    $6000 to Backdoor Roth
    $6000 to spousal backdoor Roth
    $39k to taxable account

    I can’t do HSA and my wife makes a minimal amount through 1099 earnings if that matters. I’m new to all this although am trying to learn. Is my thinking off or am I on the right track?

    #220803 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2263
    Joined: 01/03/2017

    I would really try to max out the Roths this year. I know you’ll just have 5 months of attendinghood and potentially only 4 months of attending paychecks (depending on how you’re paid) but you should be able to do it. I assume a 401k is your only offered retirement plan through your employer?

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #220807 Reply
    Liked by Anne
    Avatar Gamma Knives 
    Participant
    Status: Physician
    Posts: 140
    Joined: 06/25/2017

    Agreed with Cord about maxing roth. Remember you can do backdoor roth until April 15 of the following year.

    #220811 Reply
    Liked by Anne
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3168
    Joined: 01/14/2017

    Max your wife’s i401k. Deduct all that is legal for her business. 529s?

    #220815 Reply
    Avatar WuzUpDoc 
    Participant
    Status: Spouse
    Posts: 35
    Joined: 11/03/2018

    I forgot about the tax date. I’ll definitely try to max it out. I also need to get our emergency fund started and want to throw as much as I can at savings before my loan payment jumps up.

    #220816 Reply
    Avatar WuzUpDoc 
    Participant
    Status: Spouse
    Posts: 35
    Joined: 11/03/2018
    I assume a 401k is your only offered retirement plan through your employer?

    Click to expand…

    No other plans offered unfortunately.

    Max your wife’s i401k. Deduct all that is legal for her business. 529s?

    Click to expand…

    She doesn’t have a i401k. Residency was really tight and we barely had anything to throw into savings let alone retirement. Is this something we should do in place of or in addition to the accounts I mentioned above? For personal reasons we will not be funding 529s.

    #220819 Reply
    CordMcNally CordMcNally 
    Participant
    Status: Physician
    Posts: 2263
    Joined: 01/03/2017
    medical school scholarship sponsor

    She doesn’t have a i401k. Residency was really tight and we barely had anything to throw into savings let alone retirement. Is this something we should do in place of or in addition to the accounts I mentioned above? For personal reasons we will not be funding 529s.

    Click to expand…

    What do you define as the minimal amount that she makes?

     

    “But investing isn’t about beating others at their game. It’s about controlling yourself at your own game.”
    ― Benjamin Graham, The Intelligent Investor

    #220821 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3168
    Joined: 01/14/2017

    I would look into her starting a i401k in addition to what you’re already planning, provided she meets minimum income requirements for reporting.

    #220823 Reply
    Avatar WuzUpDoc 
    Participant
    Status: Spouse
    Posts: 35
    Joined: 11/03/2018
    What do you define as the minimal amount that she makes?

    Click to expand…

    $7-10k/year and pretty much no deductions (bought a new computer a few years ago and has a office subscription, but that’s it). I know she plans on continuing to work to some degree because she enjoys it, but I don’t count on it and just look at it as more of a bonus. I’m unfamiliar with a i401k but from my quick google search, it looks like she could contribute up to the amount of her earnings before taxes, correct? I’m assuming we should do this before taxable accounts.

    #220830 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 959
    Joined: 02/11/2019

    It would be better to fill tax protected space this year and have less for taxable next year if you can get the cash to make it happen.
    This might be your last good year for a Roth 403b if available.
    Do you have access to a 457?

    “Never let your sense of morals prevent you from doing what is right.”

    #220865 Reply

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