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  • Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Do not do Form 5498.
    Form 5498: IRA Contributions Information reports your IRA contributions to the IRS. Your IRA trustee or issuer – not you – is required to file this form with the IRS by May 31. When you save for retirement with an individual retirement arrangement, you probably receive a Form 5498 each year.

    One Form 8606 for EACH person. Download the form and fill it out (lots of directions here).
    1) State the facts of the contributions and conversions.
    2) Post by line number your form.
    You will get reviews for free quickly here. Yes or corrections.
    Good news, easily fixable. Relax. Two forms to submit.

    Click to expand…

    I was happy to find a tutorial on how to fill out the form by WCI. This included how to do this for two roths in one year.

    Now my question is this:

    Do I just fill out the forms and send it or do I need to add the tax forms of fidelity which are 1099-R forms?

    Thank you!

    in reply to: letter from IRS #224157 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    How many years have you done backdoor Roth without filing 8606?

    Click to expand…

    we used to have a CPA when my husband had 1099 income. I believe she used to review everything before.

    in reply to: letter from IRS #223724 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    pull your 8606(s) and make sure it was done correctly.

    if you are saying “11K each” it looks like you did a prior year and tax year in the same year (5500 plus 5550 each). yes?

    i don’t backdoor but it seems there are many people who do this song and dance every year and need to write a letter to IRS

    Click to expand…

    Yes it was for both years. not sure the kind of letter I should be writing to IRS. Asking for help to do this right…

    in reply to: letter from IRS #223716 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    1st is it fake.
    2nd did you send 8606
    3rd look up # online and call

    Click to expand…

    Not fake but a good thought. I did not send in 8606. what do i do now?

    in reply to: letter from IRS #223715 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Affiliated with Fidelity (wholly owned).
    Pull your Form 8606 that you did file, you did file didn’t you? Your assumption seems logical. To be honest, screwups seem to be from incorrect form completion.
    The blog and forum posts can help. Usually, sending it the corrected form does the trick.
    Good luck.

    Click to expand…

    I did not do a 8606. what do i do now?  fidelity said I should send in 5498. that sounds wrong.

    in reply to: letter from IRS #223713 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    I did not send in 8606. not sure what that is. My bad. fidelity told me I can look up and send in 5498?

    in reply to: letter from IRS #223710 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017
    Splash Refinancing Bonus

    Leave things where they are for now. Pull your self from the analysis paralysis. The enemy of good is great!

    Expense ratio on the funds above are minimal compared to what is more important…

    like people said in the discussion above, you truly need to put away WAY more than 20% of your income for a quicker financial independence. Contribute to back door Roth yearly. Set up a taxable account with a risk tolerance you are comfortable with. Start putting money in there automatically. It will add up very quickly. Trust me.

    while it is a feel good story to make 40k/yr and have a million dollar in 401k, you are making 700k a year so try to make up the missed opportunity of compound interest, by putting up to 40 percent into savings.. It sounds crazy, but talk with your partner, transfer money to taxable account when paycheck comes in. Start 20 >25 >30 percent.  It’s doable.

    in reply to: Anonymous Post #217825 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    How long have you been in Hawaii? I only ask because I know many don’t stick around too long, including doctors.  In which case I maybe wouldn’t rely too heavily on any Kaiser pension.

    Click to expand…

    We have been here about 2 years. Pretty sure we will stay here though. Hubby is a radiation oncologist but mostly he is a windsurfer. We always knew we wanted to end up close to a nice place for him to windsurf. Kids love their school and their new friends. while neither one of us is Asian, we love the Asian culture and the whole peaceful and laid back nature of people here. No intention to move for the next 15 years at least.

    in reply to: too much in 401k? #217823 Reply
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    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Ok, well that’s a lot better. 4.8% return, roughly, assuming this is filling up your first bucket of 0% tax for the standard deduction. Still, my biggest problem with annuities is that it’s not really your money in a complete sense. However, you’d need a 9.3% CAGR on your after tax lump sum to beat the annuity BTW. Hard to beat that.

    Click to expand…

    I have no problem with them giving me money that was not TAKEN from me (unlike SS, IRA, Roth etc). It’s free money, and I will take it. I only work part time and if I wanted to I could work full time for just 3 years that nest egg would be much bigger (equation goes by your three years of highest earned income). I won’t because life is too short/I love working half time and we don’t really NEED this money. Having said that,  I won’t refuse it if they give it to me either!

     

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    I disagree with this wholeheartedly.  That pension is part of your total compensation.  You knew/accepted this as part of the position.  It’s not free.  If you didn’t get a pension presumably you would have been compensated in other ways to compete for your services in the open market (salary, match, etc.).  You accepted less elsewhere so you could have this pension, whether you wanted to or not.

    Click to expand…

    It is not entirely true. Mainly because when we moved to Honolulu I strictly was interested in working 0.5 FTE with full benefits. Kaiser is the only place that let me do that. Pension is truly icing on the cake. While other places would pay me more, they also wanted me to work more and cover more hospitals/ more weekend on call etc. It was a better job for what I was looking for. So in essence, it’s a better deals. Kaisers in California require you to be at least 0.6 FTE to get all the benefits. Hawaii is different.

    in reply to: too much in 401k? #217764 Reply
    Liked by Craigy
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Ok, well that’s a lot better. 4.8% return, roughly, assuming this is filling up your first bucket of 0% tax for the standard deduction. Still, my biggest problem with annuities is that it’s not really your money in a complete sense. However, you’d need a 9.3% CAGR on your after tax lump sum to beat the annuity BTW. Hard to beat that.

    Click to expand…

    I have no problem with them giving me money that was not TAKEN from me (unlike SS, IRA, Roth etc). It’s free money, and I will take it. I only work part time and if I wanted to I could work full time for just 3 years that nest egg would be much bigger (equation goes by your three years of highest earned income). I won’t because life is too short/I love working half time and we don’t really NEED this money. Having said that,  I won’t refuse it if they give it to me either!

     

    in reply to: too much in 401k? #217688 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Wait, can Kaiser docs take a lump sum on their pensions?

    Click to expand…

    yes. I live in Hawaii and HPMG which is our Kaiser for the region here allows for that.

    in reply to: too much in 401k? #217686 Reply
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    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    @ENT doc.
    Actually we have 3 pensions. The one I’m mentioning is the kaiser one priced at 640,000. The total of all three is 1.2 million…

    in reply to: too much in 401k? #217339 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017
    Earnest refinancing bonus

    ENT Doc suggested many of the variables.
    The AA of your investments is aggressive but, the pensions give you a great security blanket.

    You mentioned spreadsheet. Because you are looking at 30 year projections, trust but verify the results you are getting. Tons of retirement planners are available for free.

    The changes in the 401k/IRA stretch proposed greatly impact the tax your heirs would owe. Sheltering gains permanently for 30 years vs tax on the contributions for Roth changes the math. Are marginal tax rates going to be higher in 30 years? No good answers, but Roth over and extended period is definitely improving the flexibility and attractiveness for taxes.

    Click to expand…

    Do you know of any free spreadsheets? I am just making my own as I go along. Tons of different buckets and time horizons. I have the option of doing ROTH 401k but I don’t believe my husband has that choice. I think starting next year, I will contribute to Roth 401K instead.

    While I have been a serious saver for a long time now, it has only been recently that I am paying attention to RMD and ROTH conversion strategies.

    I think so many people in the white coat investor audience are still trying to get a hold of their debts and trying to change the mindset that this issue has not been a main focus for him. While I’m only turning 50 this year, I am just starting to think about the ‘consequence’ of saving to the max for when we hit 70 (if we hit that age)

    I’m a palliative care doctor and am also very much aware that we may simply die before that and never get to spend any of this. So learning the ins and out of distribution at time of death to our beneficiaries are also coming to focus for me.

    But first… our upcoming trip to Italy for two weeks. It is really amazing that with a steady and healthy income, once you are debt free and put saving on an automatic pilot, you don’t need any fancy side kicks and side hustles to have life full of wealthly experiences without feeling indulgent.

    I am thankful to MMM and WCI to get me on track and focus on being debt free for the past 5 or 6 years.

    in reply to: too much in 401k? #217319 Reply
    Liked by childay, Tim, ENT Doc
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017
    The pension has lump sum option at 62, 65 and 67. Or you can get monthly annuity type for life. 

    Click to expand…

    Is there a payout on death?  For example, say you opt for a monthly annuity at age 65 and die at 66.  What happens with the remainder??

    If the annuity has some protection for you in terms of death benefit then I’d probably opt for that.

    Click to expand…

    So there is a monthly for the beneficiary if I die. So say I pick the 75% joint and survivor annuity. While alive I’ll start getting 3306 per month starting 65, if I die same year, my beneficiary will get 2479 for life. Is that what you are asking? I think the lump sum option is ONLY for me and not for the beneficiary.

    in reply to: too much in 401k? #217317 Reply
    Avatar Drknowsbest 
    Participant
    Status: Physician
    Posts: 50
    Joined: 07/09/2017

    Ok so we have money in taxable account (we put 8 k a month there)

    The pension has lump sum option at 62, 65 and 67. Or you can get monthly annuity type for life.

    I think what we are thinking of starting to switch to Roth 401k starting next year. Then at 65, we will do 200k Roth conversion for 5 years. Is that sounding like a decent plan?

    in reply to: too much in 401k? #217055 Reply
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