MtoM #138: Doc Helps Change His 401(k) Plan and Finance 101: Tax Brackets
Oct 2, 2023
auto_awesome
A doc shares his journey of advocating for changes to his employer 401(k) plan, resulting in the addition of after-tax contributions and mega back door Roth contributions. The podcast also discusses the keys to being a successful doctor and maximizing 401(k) contributions. Additionally, it debunked misconceptions about tax brackets and emphasized the importance of understanding the progressive income tax system.
Advocating for changes to your employer 401(k) plan can lead to the addition of options like after-tax contributions and in-service distributions, enabling mega backdoor Roth contributions and increased retirement savings.
Increasing patient volume and being accessible and flexible can significantly boost earnings for family physicians, emphasizing the importance of maintaining a competent staff and having a good nurse.
Deep dives
Dr. Brian Reichenbach changes his 401k
Dr. Brian Reichenbach shares how he successfully advocated for an after-tax option in his 401k, allowing him to utilize a mega backdoor Roth. This change enabled him to max out his contributions and significantly increase his retirement savings. He emphasizes the importance of being proactive and suggesting improvements to your employer-sponsored retirement plan.
Tips for maximizing your income as a family doc
Dr. Reichenbach attributes his higher than average income as a family physician to being affable, able, and available. He has increased his patient volume by being accessible and flexible, which has allowed him to boost his earnings. He also highlights the value of having a good nurse and maintaining a friendly and competent staff.
Understanding tax brackets and effective tax rates
The podcast delves into the confusion surrounding tax brackets and clarifies that being pushed into a higher tax bracket does not mean all income is taxed at that rate. Rather, it is important to focus on the marginal tax rate, which only applies to the income within that specific bracket. The episode advises physicians to ensure they are within the safe harbor of tax withholding and explains the difference between taxes withheld and taxes actually owed.
We loved hearing from this doc about how he advocated for changes to be made to his employer 401(k) plan. After a few years of requests he was happy to find they had added an option to have some after-tax contributions and in-service distributions that allows for mega back door Roth contributions. We love to see you making educated and positive changes in your workplace! Stick around after the interview for a discussion on tax brackets.
If you are finding our podcasts informative and helpful, check out our website! Since 2011 we have been working hard to provide valuable personal finance and investing information through thousands of blog posts written by an array of authors. You can find information on how to manage your student loans, fix and avoid common financial mistakes, understand your retirement accounts, optimize your investments, find professional help at a fair price, get started investing in real estate, and so much more, all at no cost to you. You can find out more about the courses we offer, the conferences we put on, the newsletters we provide, and interact with other WCI readers through our online forum. Head on over to https://www.whitecoatinvestor.com to start learning today. You can do this and The White Coat Investor can help.
The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor channel is for you!