Hi Bogleheads -
I am a 38-year-old physician employed by a health system.
My income is 100% W2 - approximately $900K/year. We spend about $200K per year - the rest we save. We are very fortunate - money is currently not a problem for us.
I have access to a 401K which I max out. We also max out all other tax advantaged options.
Where I need help today:
My contract also includes an executive non-qualified deferred compensation plan that amounts to 15% of my pre-tax salary (above my salary) - so approximately $130K/year is placed in a pre-tax Fidelity account. I am able to select low-cost investment options (S&P index, total market index, total bond index etc) but the money is not fully mine until it is distributed to me via a tax event. Annually, I elect when I want this money distributed (taxed and released to my brokerage account). I can choose any future month/year.
For instance, with our current employer benefit open enrollment, I need to choose which month/year my 2025 funds ($130K) will be distributed to me - any date after Jan 2026 is an option (going out 20 years).
As I see it, I will be in the highest income tax bracket likely all working years and possibly into retirement too.
I do not need the money now/soon. Realistically, I target 15-18 more years of at least part/most-time work.
The health system's (my employer) finances are so-so. They have moved from in the deep red (circa COVID Pandemic) to mild red with ongoing improvement. They are far from strong with infinite external financial pressures (wages/costs increasing, reimbursements decreasing) - all the usual health system challenges.
HOW WOULD YOU APPROACH DISTRIBUTION FOR THIS UNQUALIFIED ACCT? Take it ASAP to safeguard it in the brokerage account or let the pre-tax benefits/growth ride? If so, how long? 5 years, 10 years, more?
Thanks,
I am a 38-year-old physician employed by a health system.
My income is 100% W2 - approximately $900K/year. We spend about $200K per year - the rest we save. We are very fortunate - money is currently not a problem for us.
I have access to a 401K which I max out. We also max out all other tax advantaged options.
Where I need help today:
My contract also includes an executive non-qualified deferred compensation plan that amounts to 15% of my pre-tax salary (above my salary) - so approximately $130K/year is placed in a pre-tax Fidelity account. I am able to select low-cost investment options (S&P index, total market index, total bond index etc) but the money is not fully mine until it is distributed to me via a tax event. Annually, I elect when I want this money distributed (taxed and released to my brokerage account). I can choose any future month/year.
For instance, with our current employer benefit open enrollment, I need to choose which month/year my 2025 funds ($130K) will be distributed to me - any date after Jan 2026 is an option (going out 20 years).
As I see it, I will be in the highest income tax bracket likely all working years and possibly into retirement too.
I do not need the money now/soon. Realistically, I target 15-18 more years of at least part/most-time work.
The health system's (my employer) finances are so-so. They have moved from in the deep red (circa COVID Pandemic) to mild red with ongoing improvement. They are far from strong with infinite external financial pressures (wages/costs increasing, reimbursements decreasing) - all the usual health system challenges.
HOW WOULD YOU APPROACH DISTRIBUTION FOR THIS UNQUALIFIED ACCT? Take it ASAP to safeguard it in the brokerage account or let the pre-tax benefits/growth ride? If so, how long? 5 years, 10 years, more?
Thanks,
Statistics: Posted by Sellery1031 — Mon Nov 04, 2024 9:00 pm — Replies 4 — Views 310