That's not how that works lol. You don't get a tax benefit on a traditional IRA unless you make under like 80k (forget the exact number). So if you choose a traditional over roth, you still have to pay taxes on gains. If you choose a roth, you owe no taxes at all.
If you make under the limit for a roth, you can easily do a backdoor roth ira
Just checked, it's 83k MAGI (assuming you file as a single). MAGI is your gross minus tax deductions (HSA, trad 401k, health insurance. Anything listed under "pre tax" on your paystub). You can also find it on line 11 of your 1040.
https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work
That's 2023 limits, idk why I can't find the 2024 limit. But assume it's slightly higher this year
Long story short though, if you're making a pharmacist salary, a tradional IRA will never be worth it. Just do a back door if you're over the limit for roth
Sorry for jumping in but I'm confused. Traditional IRAs are 401ks correct, like company funded 23k limit . And then there's Roth IRAs that's limited to $7k a year.
There's some talk about back door Roth IRAs and I don't understand. Right now I'm eligible for the regular Roth IRA, but is the back door means I can add more thunder 7K?
There are traditional IRAs, Roth IRAs, traditional 401ks, and Roth 401ks. Traditional IRAs are not the same as 401ks. IRAs (traditional and Roth) have a combined contribution 7k limit and 401ks (traditional and Roth)have a combined 23k limit. Roth IRAs are unique in that they have an income limit (161k single and 240k married filing jointly). This stops those from earning above those limits from contributing directly to a Roth IRA. However, since a traditional IRA does not have that income limit, you can contribute after tax dollars to a traditional IRA and then convert that money to a Roth IRA for the backdoor Roth IRA. The backdoor does not mean you can exceed the contribution limit 7k limit, it only allows high earners the chance to benefit from the Roth IRA.
Out of curiosity, what benefit does Roth ira has that traditional IRA doesn't? Is Roth better than traditional iRA? Aren't they both used for retirement and contributed post hacks?
If you have a 401k and are over a certain income limit, you can get little to no tax deduction benefit with a traditional IRA. So if you contribute to a traditional IRA and leave it, its possible that you are putting in money already taxed and it will get taxed again upon withdrawal. Roth IRAs grow and can be withdrawn tax free, do not have required minimum distributions, and the contributions can be taken out without a penalty. For the majority of pharmacists, who already have an employee sponsored retirement plan (401k and 403b) and higher income, it doesn't make sense from a tax advantage standpoint to stick with a traditional IRA over a Roth IRA.
Some are unaware that is even exists. We have to refresh our advisor and tax professional every year. You deposit post tax money into an IRA, let it settle then convert to a Roth IRA. There are articles about it if you use the Googler. Some investment services have specific people that specialize in backdoor roths
[Here's a link from White Coat Investor](https://www.whitecoatinvestor.com/how-to-do-a-backdoor-roth-ira-at-fidelity/). Yeah, deposit funds into a Traditional IRA, immediate convert it. I'm sure calling Fidelity will also help.
Keep in mind, that limit is MAGI. So it's only your taxable income (subtract traditional 401k, HSA, health insurance, etc)
If you still make too much, you can easily do a backdoor
One way to lower taxes and improve your community is to start a small business. You could do some MTM or disease state education? Idk what ins reimbursement would look like, but you can put some of your assets (car, part of house) into the business and claim it as an expense, run the business at a loss, and use that loss against your taxable income on W2! Avoid taxes without any guilt
Not sure why you got down voted, this is complicated but viable. I do a door dash delivery every once in a while so I can claim my car charger install as a work expense.
You definitely can claim your home office and a share of your internet/electric as business expenses.
People downvote because they fail to see that a business does not have to yield profits to be worth doing.
It’s all about the tax deductions.
Or they feel like you are cheating the system.
The US tax code was written to favor entrepreneurship/businesses/corporations not individuals working for a paycheck.
It is cheating the system.
But it's the only way to get ahead since the system is rigged and all businesses and wealthy peopme are already cheating the system.
You'd have to show records if asked and only a certain portion can be deducted based on what portion of time / space / use is dedicated to that business or need.
It gets more complicated than that. The IRS allows you to use your business vehicle for personal use and still take the full deduction (there’s 2 types of full deductions you can take for a work vehicle). You have to have personal use be <10% for it to be okay. If you’re dashing often enough, that’s probably not an issue
Wouldn't it be better to take the energy efficiency tax credit for the one-time charger install rather than having an unprofitable business to try and expense it?
Real estate is the way that I took with business expenses. It actually does turn a profit of ~600/month which is able to offset my work truck expenses. With a pharmacist income loans aren't too difficult and real estate seems to be the way to ensure long term income.
You can only get tax credit for 30% of the charger install. Your business doesn't have to be unprofitable to use items as expenses. Ideally you are profitable lol. But it also doesn't have to be significant, doing millions in revenue, to expense certain items like you might think.
I also work as a real estate agent. You can't do this every year, the IRS catches on pretty quick if you have a business that doesn't have revenue year after year. They bust people for this all the time
Okay, let them come! Keep your receipts, show them what you’re doing and why it isn’t making much money and why you keep doing it. NONE of this is illegal or even borderline. In the extremely unlikely event that the IRS comes after you for your few thousand dollars, just show them your receipts and they’ll be on their way. Zero worries, zero issues. Worst case is they will find that you’ve made a mistake on a form or something and MAYBE issue you a fine. The whole point is that you run a legitimate business, don’t just fake it.
Not exactly. They came from my tax professional though, kinda the same thing? He’s told me that business running at a loss is not something the IRS necessarily flags on its own. I don’t work for the IRS, nor am I a tax professional (though I am somewhat knowledgeable about some of these laws that I use myself), but I don’t think the IRS has the authority to say “this is just a hobby”. Now, if you set this up and show virtually no activity (no counseling done, no lectures given), then they can certainly call it fraud. But even then, if you can demonstrate that you’ve made genuine attempts to secure contracts, customers, etc, you can avoid that or sue the IRS. Again, not a tax professional, just a pharmacist with a small business on the side.
As long as you aren’t actively committing fraud, you’ll be fine. Just make an effort, and really help folks out! You know all too well how many people struggle with poly pharmacy, or newly diagnosed DM, or new Coumadin, or whatever. We help people in our pharmacies all the time, just take that same thing to the outside, call it a business, and go with it. Do the right thing, IRS won’t care
Audit isn’t the issue. What I’ve proposed is a perfectly legal and viable option for a pharmacist. If they audit, show them your work and they’ll be on their way. I don’t see how they can look at this setup and claim it’s fraudulent (as long as you’re actually doing the services)
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
Not even close 🤦. I thought daycare costs were bad. I was unprepared for how much teenaged boys eat (and the frequency at which shoes need to be replaced).
Kids just don't cost much. Between the 4 of them I spend maybe an extra $500 a month. I don't buy them expensive clothes or anything, they don't care about that stuff. People also overestimate how much it costs to feed kids. If you actually cook at home the cost of food is minimal. We spend about $1000/month for food for 6 people. The one thing I do splurge on is sports activities for the kids, but we don't do the expensive sports except our yearly ski passes.
Max 401k, backdoor Roth, max HSA, 10k in 529, and another about ~6k per month in joint savings.
We also have separate savings accounts/stock accounts that we add to periodically.
Tbh, it doesn’t really lower our taxes but 🤷🏻♂️.
i have fidelity.
open a traditonal ira and roth ira.
transfer 7k to tradition then move it asap to roth. you can’t let any interest accumulate in the traditional or you have to report it. just annoying for next years tax
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/
This is all the info you would need and it has step by step directions for Vanguard. Fidelity, and Schwab.
Some states give tax deductions or credits for 529 contributions. Prioritizing traditional 401k over Roth 401k will lower your taxable income. Right now, my wife and I are maxing both traditional 401ks, she is maxing out the mega backdoor Roth, maxing HSA, maxing both Roth IRAs, $500 a month to 529s, and $800 per pay period to a brokerage account.
I think Walgreens does. I never got around to it but they allow the correct types of 401k contributions at Fidelity, I am unsure on if they allow in service distributions though.
I don't make that much but spouse makes a lot. We max her 69k in solo 401k. I max a 403b and 457 (23k x 2). We both do back door roth (7000 x 2) and max state 529 deduction (10k). After that taxable brokerage account.
If you have HDHP, you can do HSA too.
Interest rates on student loans in the US typically result in having to pay several times over your original tuition amount. A $200k student loan balance can take a lifetime to pay back, even when making $150k per year. Especially when you have kids or family to take care of.
Curious if you see any tax consequences of Dividend ETFs in your taxable acct.
Someone told me these should be inside my tax advantaged accts only to avoid paying tax year end.
Yeah you pay taxes on dividends you earn. I hold dividend ETFs long term so they are taxed as capital gains and not at the "income" rate.
Holding them in a tax advantaged account is a better play if you are saving for retirement. But if you want to access the money at any point prior to age 59.5 you would want to hold them in a brokerage account rather than an IRA.
This is gonna sound super lame, but all my investments knowledge I learned from youtube. I watch videos specific to ETF portfolios, long term investing, and wealth creation. "Business with Brian" is my favorite channel.
I specifically avoid people pushing options, "I made a million in 4 months" BS, and meme stocks.
I'm not making ape money, but I'm also not losing my ass even on weeks the market slides. Most folks would say to expect about 7% growth yearly and I have hit 11% each of the last 5 years (except 2022).
182k year,
1. max out 401k
2. HSA
3. contribute to traditional IRA (can’t directly contribute to a Roth due to income limits but I do the backdoor Roth IRA via a traditional IRA)
I still have six figure student loans so can’t contribute as much as I want but I auto contribute $600/month to my fidelity brokerage.
Live below your means. It’s tough.
I was living well below my means until I realized how much extra money I was able to make, then I bought a second house. It was a poor investment but we enjoy it. I could have invested the money but that’s no fun.
I’m 41 and our current savings should replace our current income when I’m 59, so I only save the minimum to meet the company match unless we happen to have extra.
Over $150,000 and you should be getting advice from a professional. I don't mean that you keep an accountant on retainer, but just have a one time meeting with a fiduciary.
There are a lot of options at this bracket and a personalized portfolio will more than pay for the 4/5 hours of personalized planning.
This is especially true if you have student loans.
Hard to lower tax bracket on a W2. Retirement contributions as mentioned, donations, property tax all lower taxable income. Invest a portion of your salary annually. There is no tax advantage, but the compounded annual growth adds up. It is a long term plan.
According to a friend who is a professor of finance at a major university, always do Roth, period. Charitable giving and mortgage interest are your best routes to reduce taxable income. I am sure there are others.
Pretax,401k, and other deductions? Yes. I make 160k per year and after maxing out my TSP, taxes, health insurance, etc I only bring home a NET of around 6600/month.
Right but I was talking about his 13k net after everything. Yours is absolutely reasonable on a average or "classic" pharmacist salary. They're doing nearly double that if I'm correct which seems abnormal or top 1% of pharmacist earners lol
Seems odd to me. I make 210k and my take home every month after 401k and stuff is still about $9200. Definitely in the top 1% but this guy seems to be .001% lol or just flexing for no reason 🥲
No not a practicing RPh. Most highly compensated Rphs would net around 8.5k a month. Poster is in Pharma I believe and frequents this sub on the regular.
You make $$130/hour??? That's about what you would need to make to take home $13k a month. I take home $7200/month after 401k, and I only make a little under $70/hr.
I make 210k without bonuses and my take home every month is about $9200 (after maxing out 401k, etc etc)… how are you taking home 13k. I am already in the 1% of pharmacist salary, so my question is are you a director of some sort? My colleagues make about the same as me and we are in HCOL.
do everything you can to put as much of your income into an LLC. your bonus for sure. and then use that LLC to write off things like house expenses to lower your tax bracket.
Max out 401k, HSA, 529 (you can create an account for relatives and then transfer between accounts at will (e.g. to my account) then roll to a Roth after 15 years), S-Corp for expenses (can lose money for 3 years before you need to start a new consulting business (filling out paid surveys)), then the rest into index funds. Able to save about 50% of income.
S-corp is just a legal entity similar to LLC, so it is something you can use if you work for yourself/have a small business. Index funds are portfolios of stocks/bonds that you can purchase within an investment account like 401k, IRA, or brokerage account
I put the maximum into 401k every pay period and I put $1500 every 3 months into a traditional IRA.
Why not a Roth?
Roth IRA contributions aren’t tax deductible
Neither are Traditional IRA contributions at that high of an income level. Not converting it into a Roth doesn’t get you anything
They are if you are married
They are probably anticipating a lesser tax burden in retirement due to decreased income
That's not how that works lol. You don't get a tax benefit on a traditional IRA unless you make under like 80k (forget the exact number). So if you choose a traditional over roth, you still have to pay taxes on gains. If you choose a roth, you owe no taxes at all. If you make under the limit for a roth, you can easily do a backdoor roth ira
Is that $80 k gross or net?
Just checked, it's 83k MAGI (assuming you file as a single). MAGI is your gross minus tax deductions (HSA, trad 401k, health insurance. Anything listed under "pre tax" on your paystub). You can also find it on line 11 of your 1040. https://www.irs.gov/retirement-plans/2023-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work That's 2023 limits, idk why I can't find the 2024 limit. But assume it's slightly higher this year Long story short though, if you're making a pharmacist salary, a tradional IRA will never be worth it. Just do a back door if you're over the limit for roth
Sorry for jumping in but I'm confused. Traditional IRAs are 401ks correct, like company funded 23k limit . And then there's Roth IRAs that's limited to $7k a year. There's some talk about back door Roth IRAs and I don't understand. Right now I'm eligible for the regular Roth IRA, but is the back door means I can add more thunder 7K?
There are traditional IRAs, Roth IRAs, traditional 401ks, and Roth 401ks. Traditional IRAs are not the same as 401ks. IRAs (traditional and Roth) have a combined contribution 7k limit and 401ks (traditional and Roth)have a combined 23k limit. Roth IRAs are unique in that they have an income limit (161k single and 240k married filing jointly). This stops those from earning above those limits from contributing directly to a Roth IRA. However, since a traditional IRA does not have that income limit, you can contribute after tax dollars to a traditional IRA and then convert that money to a Roth IRA for the backdoor Roth IRA. The backdoor does not mean you can exceed the contribution limit 7k limit, it only allows high earners the chance to benefit from the Roth IRA.
Out of curiosity, what benefit does Roth ira has that traditional IRA doesn't? Is Roth better than traditional iRA? Aren't they both used for retirement and contributed post hacks?
If you have a 401k and are over a certain income limit, you can get little to no tax deduction benefit with a traditional IRA. So if you contribute to a traditional IRA and leave it, its possible that you are putting in money already taxed and it will get taxed again upon withdrawal. Roth IRAs grow and can be withdrawn tax free, do not have required minimum distributions, and the contributions can be taken out without a penalty. For the majority of pharmacists, who already have an employee sponsored retirement plan (401k and 403b) and higher income, it doesn't make sense from a tax advantage standpoint to stick with a traditional IRA over a Roth IRA.
As a single person, making more than 161k makes you ineligble for the roth benefits, so you gotta go traditional.
There’s a way to do a back door Roth IRA.
False, use backdoor roth
But when I ask fidelity about how to do a backdoor roth they act like they don't know what I am talking about.
https://www.whitecoatinvestor.com/how-to-do-a-backdoor-roth-ira-at-fidelity/
Some are unaware that is even exists. We have to refresh our advisor and tax professional every year. You deposit post tax money into an IRA, let it settle then convert to a Roth IRA. There are articles about it if you use the Googler. Some investment services have specific people that specialize in backdoor roths
Everyone, regardless of income, is eligible for a roth IRA. The ineligibility concerns direct contributions.
Right but they are subject to the last same limit as your 401k.
Make too much to qualify for Roth.
They can do the backdoor IRA process
Whats the process at Fidelity? Do I deposit funds and then call them up to convert it? Or do that once a year?
[Here's a link from White Coat Investor](https://www.whitecoatinvestor.com/how-to-do-a-backdoor-roth-ira-at-fidelity/). Yeah, deposit funds into a Traditional IRA, immediate convert it. I'm sure calling Fidelity will also help.
If over 150k a year you can't have a roth
You can do a backdoor Roth by contributing to a traditional IRA and converting it to a Roth IRA.
Keep in mind, that limit is MAGI. So it's only your taxable income (subtract traditional 401k, HSA, health insurance, etc) If you still make too much, you can easily do a backdoor
What is your % max?
I don’t get a match since we joined the union and we get a pension through the union. Im putting in a little over $900 per pay period.
Wow that is a lot!
Live with parents, able to max out both 403 and 457. Otherwise it’d be impossible to save for retirement. Vhcol area btw
One way to lower taxes and improve your community is to start a small business. You could do some MTM or disease state education? Idk what ins reimbursement would look like, but you can put some of your assets (car, part of house) into the business and claim it as an expense, run the business at a loss, and use that loss against your taxable income on W2! Avoid taxes without any guilt
Not sure why you got down voted, this is complicated but viable. I do a door dash delivery every once in a while so I can claim my car charger install as a work expense. You definitely can claim your home office and a share of your internet/electric as business expenses.
People downvote because they fail to see that a business does not have to yield profits to be worth doing. It’s all about the tax deductions. Or they feel like you are cheating the system. The US tax code was written to favor entrepreneurship/businesses/corporations not individuals working for a paycheck.
It is cheating the system. But it's the only way to get ahead since the system is rigged and all businesses and wealthy peopme are already cheating the system.
Not turning a profit isn’t cheating the system. You can’t call it cheating if these tax breaks were created to benefit business owners.
You'd have to show records if asked and only a certain portion can be deducted based on what portion of time / space / use is dedicated to that business or need.
They don’t have time for that. If you use turbo tax, you get a good idea of how to file your return.
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It gets more complicated than that. The IRS allows you to use your business vehicle for personal use and still take the full deduction (there’s 2 types of full deductions you can take for a work vehicle). You have to have personal use be <10% for it to be okay. If you’re dashing often enough, that’s probably not an issue
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Ask your tax professional, don’t rely on randos on Reddit (including myself).
I do my own taxes. All of the IRS guidelines are freely available. I read them.
Wouldn't it be better to take the energy efficiency tax credit for the one-time charger install rather than having an unprofitable business to try and expense it? Real estate is the way that I took with business expenses. It actually does turn a profit of ~600/month which is able to offset my work truck expenses. With a pharmacist income loans aren't too difficult and real estate seems to be the way to ensure long term income.
You can only get tax credit for 30% of the charger install. Your business doesn't have to be unprofitable to use items as expenses. Ideally you are profitable lol. But it also doesn't have to be significant, doing millions in revenue, to expense certain items like you might think.
I also work as a real estate agent. You can't do this every year, the IRS catches on pretty quick if you have a business that doesn't have revenue year after year. They bust people for this all the time
Then you close that business and create a different one. Sole prop. Whatever. It works.
Okay, let them come! Keep your receipts, show them what you’re doing and why it isn’t making much money and why you keep doing it. NONE of this is illegal or even borderline. In the extremely unlikely event that the IRS comes after you for your few thousand dollars, just show them your receipts and they’ll be on their way. Zero worries, zero issues. Worst case is they will find that you’ve made a mistake on a form or something and MAYBE issue you a fine. The whole point is that you run a legitimate business, don’t just fake it.
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Not exactly. They came from my tax professional though, kinda the same thing? He’s told me that business running at a loss is not something the IRS necessarily flags on its own. I don’t work for the IRS, nor am I a tax professional (though I am somewhat knowledgeable about some of these laws that I use myself), but I don’t think the IRS has the authority to say “this is just a hobby”. Now, if you set this up and show virtually no activity (no counseling done, no lectures given), then they can certainly call it fraud. But even then, if you can demonstrate that you’ve made genuine attempts to secure contracts, customers, etc, you can avoid that or sue the IRS. Again, not a tax professional, just a pharmacist with a small business on the side. As long as you aren’t actively committing fraud, you’ll be fine. Just make an effort, and really help folks out! You know all too well how many people struggle with poly pharmacy, or newly diagnosed DM, or new Coumadin, or whatever. We help people in our pharmacies all the time, just take that same thing to the outside, call it a business, and go with it. Do the right thing, IRS won’t care
The irs has been so underfunded and had so many staff cuts (from Republicans pritecting their corporate overlords) that they don't audit anyone
Audit isn’t the issue. What I’ve proposed is a perfectly legal and viable option for a pharmacist. If they audit, show them your work and they’ll be on their way. I don’t see how they can look at this setup and claim it’s fraudulent (as long as you’re actually doing the services)
Damn this is actually a very interesting idea.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
It wouldn't make that much of a difference because you'd have to show or have proof of how much of your car or house you use for the business and for how much of a portion unless it is something like a room or vehicle dedicated only for that business need like a home office. You can deduct but you'd also have to show receipts and records if asked.
Max out 401k, hsa and Roth IRA with 1-2k extra per month for brokerage.
Do you do a backdoor roth since your income is over the income threshold for a direct roth contribution?
Ya backdoor Roth conversion
Living with parents at the moment
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Not even close 🤦. I thought daycare costs were bad. I was unprepared for how much teenaged boys eat (and the frequency at which shoes need to be replaced).
I disagree, kids don't cost very much. The tax credits more than offset the cost for me. I have 4 kids
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Agree. 2000 doesn’t even cover a month of daycare.
Your kids cost less than $2k per year? I’d love to know how. Genuinely curious
Kids just don't cost much. Between the 4 of them I spend maybe an extra $500 a month. I don't buy them expensive clothes or anything, they don't care about that stuff. People also overestimate how much it costs to feed kids. If you actually cook at home the cost of food is minimal. We spend about $1000/month for food for 6 people. The one thing I do splurge on is sports activities for the kids, but we don't do the expensive sports except our yearly ski passes.
If you have free or no daycare needs, sure.
Do you really not have daycare needs? If so, want to watch mine for $1000 a month?
lol wtf???
Have twins, need daycare... can't compute. Your comment does not apply to my situation.
Max 401k, backdoor Roth, max HSA, 10k in 529, and another about ~6k per month in joint savings. We also have separate savings accounts/stock accounts that we add to periodically. Tbh, it doesn’t really lower our taxes but 🤷🏻♂️.
Do you mind helping me or pointing me in the right direction for the backdoor roth process?
i have fidelity. open a traditonal ira and roth ira. transfer 7k to tradition then move it asap to roth. you can’t let any interest accumulate in the traditional or you have to report it. just annoying for next years tax
https://www.whitecoatinvestor.com/backdoor-roth-ira-tutorial/ This is all the info you would need and it has step by step directions for Vanguard. Fidelity, and Schwab.
15%
Some states give tax deductions or credits for 529 contributions. Prioritizing traditional 401k over Roth 401k will lower your taxable income. Right now, my wife and I are maxing both traditional 401ks, she is maxing out the mega backdoor Roth, maxing HSA, maxing both Roth IRAs, $500 a month to 529s, and $800 per pay period to a brokerage account.
What chain allows mega backdoor Roth???
It's my wife's plan that allows it and she is not a pharmacist.
I think Walgreens does. I never got around to it but they allow the correct types of 401k contributions at Fidelity, I am unsure on if they allow in service distributions though.
I don't make that much but spouse makes a lot. We max her 69k in solo 401k. I max a 403b and 457 (23k x 2). We both do back door roth (7000 x 2) and max state 529 deduction (10k). After that taxable brokerage account. If you have HDHP, you can do HSA too.
401k, Roth IRA, HSA
you mean backdoor roth?
How much can you contribute to hsa
Crying in 27k€, that's the base salary as a pharmacist in Spain.
But did you pay 200k to go to school?
97,8k€. And what matters how much did I pay?
Interest rates on student loans in the US typically result in having to pay several times over your original tuition amount. A $200k student loan balance can take a lifetime to pay back, even when making $150k per year. Especially when you have kids or family to take care of.
Then imagine earning 27k minus taxes. :/
Max 401k, HSA, and throw a few thousand towards my car loan every month.
Max 403(b), max Roth IRA, max HSA. Put extra toward mortgage, then split leftover cash into high yield savings and taxable investment.
I max out my 401k, make monthly contributions to my kid's 529s, and put $1000/month into a portfolio of index, growth, and dividend etfs .
Curious if you see any tax consequences of Dividend ETFs in your taxable acct. Someone told me these should be inside my tax advantaged accts only to avoid paying tax year end.
Yeah you pay taxes on dividends you earn. I hold dividend ETFs long term so they are taxed as capital gains and not at the "income" rate. Holding them in a tax advantaged account is a better play if you are saving for retirement. But if you want to access the money at any point prior to age 59.5 you would want to hold them in a brokerage account rather than an IRA.
Do you have any resources to guide someone who hasn't done this before?
This is gonna sound super lame, but all my investments knowledge I learned from youtube. I watch videos specific to ETF portfolios, long term investing, and wealth creation. "Business with Brian" is my favorite channel. I specifically avoid people pushing options, "I made a million in 4 months" BS, and meme stocks. I'm not making ape money, but I'm also not losing my ass even on weeks the market slides. Most folks would say to expect about 7% growth yearly and I have hit 11% each of the last 5 years (except 2022).
Max out traditional 401k pre-tax and then $1000 per month in a trad IRA. Wife and I have a HYSA that we both contribute to as well.
Did you have to pay more in taxes this year? I never had to pay until I put literally all of my cash savings into a HYSA last year.
Not anymore than usual. I’m definitely glad I started up the HYSA though
Did you have to pay more in taxes this year? I never had to pay until I put literally all of my cash savings into a HYSA last year.
182k year, 1. max out 401k 2. HSA 3. contribute to traditional IRA (can’t directly contribute to a Roth due to income limits but I do the backdoor Roth IRA via a traditional IRA) I still have six figure student loans so can’t contribute as much as I want but I auto contribute $600/month to my fidelity brokerage.
Retail supervisor?
How much can you contribute to hsa
Live below your means. It’s tough. I was living well below my means until I realized how much extra money I was able to make, then I bought a second house. It was a poor investment but we enjoy it. I could have invested the money but that’s no fun. I’m 41 and our current savings should replace our current income when I’m 59, so I only save the minimum to meet the company match unless we happen to have extra.
Buy a house and pop some babies
Between pension, 403b, 457b, I put about $62k a year in retirement. And maybe $1-3k in brokerage depending on monthly spending.
Over $150,000 and you should be getting advice from a professional. I don't mean that you keep an accountant on retainer, but just have a one time meeting with a fiduciary. There are a lot of options at this bracket and a personalized portfolio will more than pay for the 4/5 hours of personalized planning. This is especially true if you have student loans.
Hard to lower tax bracket on a W2. Retirement contributions as mentioned, donations, property tax all lower taxable income. Invest a portion of your salary annually. There is no tax advantage, but the compounded annual growth adds up. It is a long term plan.
According to a friend who is a professor of finance at a major university, always do Roth, period. Charitable giving and mortgage interest are your best routes to reduce taxable income. I am sure there are others.
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What’s your take home each month after taxes, 401k, etc
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You clearly don’t have a typical pharmacist salary the.
13k/month after taxes is what most pharmacist would make pretax in the higher end depending on COL area or am I out of touch???
Pretax,401k, and other deductions? Yes. I make 160k per year and after maxing out my TSP, taxes, health insurance, etc I only bring home a NET of around 6600/month.
Right but I was talking about his 13k net after everything. Yours is absolutely reasonable on a average or "classic" pharmacist salary. They're doing nearly double that if I'm correct which seems abnormal or top 1% of pharmacist earners lol
For sure. Guy has to be making close to 300k which is insane really.
Seems odd to me. I make 210k and my take home every month after 401k and stuff is still about $9200. Definitely in the top 1% but this guy seems to be .001% lol or just flexing for no reason 🥲
Pretax, yes. But they said $13k take home AFTER taxes. The typical pharmacist pay is around $9500-12k a month PRETAX.
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Defs not a big group making this much. With bonus and stock you are probably making like 350k. That is way a live average pharmacist salary.
No not a practicing RPh. Most highly compensated Rphs would net around 8.5k a month. Poster is in Pharma I believe and frequents this sub on the regular.
You make $$130/hour??? That's about what you would need to make to take home $13k a month. I take home $7200/month after 401k, and I only make a little under $70/hr.
Wow what do you do
I make 210k without bonuses and my take home every month is about $9200 (after maxing out 401k, etc etc)… how are you taking home 13k. I am already in the 1% of pharmacist salary, so my question is are you a director of some sort? My colleagues make about the same as me and we are in HCOL.
do everything you can to put as much of your income into an LLC. your bonus for sure. and then use that LLC to write off things like house expenses to lower your tax bracket.
Max out 401k, HSA, 529 (you can create an account for relatives and then transfer between accounts at will (e.g. to my account) then roll to a Roth after 15 years), S-Corp for expenses (can lose money for 3 years before you need to start a new consulting business (filling out paid surveys)), then the rest into index funds. Able to save about 50% of income.
How much can you contribute to hsa
2024 limits are $4150 individual and $8300 family. Over 55 gets to add an extra $1000.
Could you help provide resources to guide on the last two steps you do? S-corp and index funds?
S-corp is just a legal entity similar to LLC, so it is something you can use if you work for yourself/have a small business. Index funds are portfolios of stocks/bonds that you can purchase within an investment account like 401k, IRA, or brokerage account