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What's your Match?

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  • jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8147
    Joined: 01/09/2016

    To add to the convo, in general, the more generous matches typically come from public/NPO institutions as opposed to private practices. In private practice, the $$ comes straight from the owners’ pockets. In public/NPO, well, you know… Guess I’m stating the obvious, but not always picked up on. This is one way that the pay disparity is somewhat equalized.

    I’ve noticed that the quality of retirement plans available to employees (esp matching) and benefits in general often are not considered as highly as raw compensation when physicians are comparing job offers. They can make a considerable difference when you stay with the same employer for awhile. In some instances, when we’ve asked for the information, the prospective employer has replied that that will be discussed after they are hired!

    This was an excellent question. Think it will make for an interesting future blog post.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #213831 Reply
    Liked by G, SLC OB
    abds abds 
    Participant
    Status: Physician
    Posts: 242
    Joined: 01/16/2017

    $37,000

    #213841 Reply
    Liked by SLC OB
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6198
    Joined: 01/12/2016

    Does anyone have caps on their matches?  For example with the 6%, it will be 6% of your total salary no matter how high that is?

    Click to expand…

    Yes, a 403b that I dont recall the exact percentages because it doesnt matter in that the max contribution is 14k, way below possible. Hopefully make some headway in changing things in this manner.

    #213848 Reply
    Liked by SLC OB
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1139
    Joined: 01/12/2016

    Currently get 14 percent of salary into a 401a. I’m moving to the VA in a few months and we get a match that comes out to about 13k/ year. Not sure what the percentage is- it’s the VA so some complicated percent of base salary plus cost of living stipend. Or something like that.

    My husband is in tech and gets a crappy 2 percent match. But then gets company stock in very generous amounts that vests over 4 years.

    #213867 Reply
    Liked by SLC OB
    Avatar FIREshrink 
    Participant
    Status: Physician
    Posts: 1007
    Joined: 01/11/2017

    On hiring it is 4%, by year 4 it has increased to 8% to a 401a up to $280k, after that to a 457f.

    Goes up to 10% at age 50.

    All told they contribute $25k-$30k per year to retirement.

    #213870 Reply
    Liked by SLC OB
    Avatar FIREshrink 
    Participant
    Status: Physician
    Posts: 1007
    Joined: 01/11/2017

    Adding that this generous retirement plan was one of the major reasons I took this job sixteen years ago. It always surprises me when prospective employees do not ask about the retirement plan and instead focus on relatively small negotiations about the salary.

    #213871 Reply
    Liked by Tim, SLC OB
    Avatar SLC OB 
    Participant
    Status: Physician
    Posts: 571
    Joined: 06/23/2018
    Splash Refinancing Bonus

    Thank you everyone!

    So our plan…

    Since they are moving the majority of the Docs from 1099 to W2, they are counting our “vesting” on how many years we have had privileges with the hospital, which is really nice as we have some long term docs who have only had 1099 for a few years or some who will go right from private practice to W2.

    In to our 457b:

    3% match

    10 years then 5% match

    15+ years is a 7% match (my category)

    Then there is another 3% deferred comp into 401a

    So it looks like I will get a total of 10%.

    Our vesting is 6 years but they are again vesting people based on years at the hospital with privileges, not years of W2 employment, which is generous, I think.

    Thanks for all the replies and information. @jfoxcpacfp – we are a District Hospital system however our wages are determined by a percentile of MGMA/AMGA averages, which seems fair. We try to have everyone be at 50%iles, except those who have been there 10+ years are at 60%ile wRVU with guarantees built in and production bonuses. I think the retirement looks especially good considering that our wages are very fair. Only bummer is a HCOLA!

    #213875 Reply
    Liked by jfoxcpacfp
    Avatar RocketBooster 
    Participant
    Status: Pharmacist
    Posts: 89
    Joined: 05/06/2018

    4% once you’re here 6 months, fully vested on day 1.

    #213876 Reply
    Liked by SLC OB
    Avatar bean1970 
    Participant
    Status: Physician
    Posts: 550
    Joined: 07/12/2017

    i work for public university. So we get state retirement benefits and practice plan benefits (as we get a paycheck from each).

    403b: practice plan contributes 7.42% of Practice plan salary. There are no employee contributions. 100% immediately vested

    401a: state contributes 5.14%.  mandatory 3% by employee  100% immediately invested  (Money from me in here but outside of contributions below).

    403b: state account. All employee contributions. 100% vested.   (This is where I put my 19K)

    457b: state account. All employee contributions.  (This is where I put my other 19K)

     

     

     

     

    #213881 Reply
    Liked by Tim, SLC OB
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1910
    Joined: 02/01/2016
    Earnest refinancing bonus

    Mandatory ORP
    Employee 6.65 %
    Employer. 8.5 %
    Capped at $280k

    TSA 403(b) and DCP 457(b) optional up to $19k each.
    HCE is “forced” to save with a generous match which exempts it from voluntary contribution limits opening up additional $19k. No state income tax.

    Not to divert the thread, but these are the “state laws” as benefits for public institutions. Curious how tax efficient different states line up in sheltering income from taxes. The key here is the mandatory employee contribution is exempt from the $60k limit of voluntary + employer. I can only assume Cali, Illinois, and NY have similar options (I hope). Subject for a different thread.
    Apologies. Well played Texas, looks like HCE’s were able to have an influence greater than their numbers.

    Click to expand…

    Mandatory employee contributions are not considered elective contributions and are not subject to the employee elective contribution limit (2019 = $19K) or the employee catch-up contribution limit (2019 = $6K).

    401a employee and employer contributions are subject to the annual addition limit (2019 = $56K) not including catch-up contributions. If the 401a and the 403b were at the same employer, there would only be one combined annual addition limit.

    #213886 Reply
    Liked by Tim, SLC OB
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8147
    Joined: 01/09/2016

    Mandatory ORP
    Employee 6.65 %
    Employer. 8.5 %
    Capped at $280k

    TSA 403(b) and DCP 457(b) optional up to $19k each.
    HCE is “forced” to save with a generous match which exempts it from voluntary contribution limits opening up additional $19k. No state income tax.

    Not to divert the thread, but these are the “state laws” as benefits for public institutions. Curious how tax efficient different states line up in sheltering income from taxes. The key here is the mandatory employee contribution is exempt from the $60k limit of voluntary + employer. I can only assume Cali, Illinois, and NY have similar options (I hope). Subject for a different thread.
    Apologies. Well played Texas, looks like HCE’s were able to have an influence greater than their numbers.

    Click to expand…

    Mandatory employee contributions are not considered elective contributions and are not subject to the employee elective contribution limit (2019 = $19K) or the employee catch-up contribution limit (2019 = $6K).

    401a employee and employer contributions are subject to the annual addition limit (2019 = $56K) not including catch-up contributions. If the 401a and the 403b were at the same employer, there would only be one combined annual addition limit.

    Click to expand…

    You never cease to amaze me. Do you plug your brain into some kind of device that syncs with the tax code?

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #213887 Reply
    Liked by BCBiker, Tim, SLC OB
    Avatar Tim 
    Participant
    Status: Accountant
    Posts: 3094
    Joined: 09/18/2018

    @spiritrider,
    “401a and the 403b “
    The ORP is a 403b too. That doesn’t change the math.
    Thank you for your amazing contributions.

    #213889 Reply
    Liked by SLC OB
    Avatar Anne 
    Participant
    Status: Physician
    Posts: 1175
    Joined: 11/07/2017

    Currently get 14 percent of salary into a 401a. I’m moving to the VA in a few months and we get a match that comes out to about 13k/ year. Not sure what the percentage is- it’s the VA so some complicated percent of base salary plus cost of living stipend. Or something like that.

    My husband is in tech and gets a crappy 2 percent match. But then gets company stock in very generous amounts that vests over 4 years.

    Click to expand…

    Just FYI wideopenspaces the VA match is pretty simple–5% of adjusted basic pay (which is comprised of basic pay + locality adjustment).  The first 1% is automatic, then dollar for dollar for first 3% contributed, then 50 cents on the dollar for next 2% contributed, for a total of 5%.  It’s per paycheck, so you can’t front load your TSP (or if you do you’ll lose out on a lot of the match)

    #213890 Reply
    Avatar burritos 
    Participant
    Status: Physician
    Posts: 494
    Joined: 04/23/2018

    0%

    #213893 Reply
    Liked by SLC OB
    Lithium Lithium 
    Participant
    Status: Physician
    Posts: 1177
    Joined: 02/15/2016

    One of the reasons I took my job is I get a “pension” (really a defined benefit plan).  It is pretty hard to value something that doesn’t pay out till 65 but still a nice perk.  I get vested in 45 days, and even though it’s nothing like a public pension it will be nice at that pointed not to feel like I accrued it all for nothing.

    #213894 Reply
    Liked by Tim, SLC OB

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