Retirement

Employment benefits: the match, pre and post-tax, and why it matters

As of 2025-2026 resident year, trinity health offers a 6% match on the first 10% of your salary placed in a 403b

-not this is not fully "vested" until after 3 years of working at trinity health. Meaning if you leave before the 3 years is up, you keep the money you have put in but get ZERO employer match. 

• Once you get access to your benefits you should go in and adjust your contribution. If yours are like mine, it automatically signs you up for only 2% contribution at pre-tax status. 

• Even if you have student debt, as we all do, it is in your best interest to max out this match early. It is literally free money that will give you a step up towards retirement savings. 

Pre-tax Vs Post tax (ROTH)

-for your benefits you can choose to do a traditional 403b pre-tax contribution, vs a post-tax ROTH contribution. 

PRE-TAX, this means that the money is taken out of your paycheck directly without any tax holdings, grows in the account over time without taxes, but then you are subject to taxes at the time you withdraw it (AKA during retirement). The taxes that you incur are based on your federal tax bracket at the time of withdrawal. 

ROTH is POST-tax, this comes out of your paycheck and grows tax free, and when you go to remove it during retirement there are no additional taxes taken from the amount you put in, or the amount that it grows by. 

The maximum annual elective contribution limit (the money YOU put in) to a 403b of any kind is $24,500.

The IRS table below outlines the differences between traditional "pre-tax" contributions vs a Roth POST tax. 

The distinction between pre- and post-tax contributions are particularly important for residents. Pre-tax contributions are best for if you think you are going to be making LESS money when you are ready to retire than when you contributed. The IRS determines your tax rate at withdrawal based on your income at the time of retirement. I personally chose ROTH post-tax after advice from multiple sources because, as attending, even if one were to scale back their practice to part time before retirement, the salary would likely always be higher than anything I was making during residency. 

After you choose your contribution amount and pre- vs post-tax, it is automatically invested. At this time, they have chosen Vanguard target 2055 for distributions. There will be a separate section on what that means on another page regarding stocks, funds, etc. 

Minimum distribution:

-something to keep in mind, by age 70, the government requires you to start withdrawing a minimum set amount from your 401k/403b, if you do not make this withdrawal the IRS can penalize you 25% of the amount you do not take. you are allowed to withdraw more than the minimum if you choose

Health Savings account:

• Among our benefits, there exists something called Health Savings Accounts, that we can contribute a portion of our salary towards. The name seems to imply that it's something to not worry about unless you are anticipating healthcare costs, BUT this can be a powerful "triple tax advantage"

• These funds are taken out pre-tax, they grow tax free, and then if you play your cards right, they can be withdrawn tax free. 

  • Typically, these funds are earmarked for only approved medical expenses BUT there is NO TIME LIMIT on when you can redeem receipts for your expenses. 

  • A strategy that is talked about in financials is maxing out your HSA contribution and INVESTING the money. Health Equity through trinity requires a balance of $2,000 to begin investing. During the time while you are young, healthy, and working, you pay your medical expenses out of pocket (plus whatever insurance covers) and don't touch the HSA funds. The key here is to KEEP THE RECEIPTS! As you get closer to retirement or in retirement itself, you can start submitting these qualified medical expense receipts that you incurred early in life and use them to take this money out tax free. So, you have a bonus of having this money available when you need it as you get older and may have more health challenges AND it has had time to grow, so you have more money than when you started! Just don't forget to go into your account and actually invest it, otherwise it just sits there.

  • Once you turn 65, it mirrors the rules of a normal IRA and you can take the money out for spending on anything, but you only get the tax-free withdrawal benefit if you do the above.

  • Keep in mind for investing, if you decide to do it with "guidance" check out their fees. Currently it's a monthly fee of 0.05%, capped at $15/month. it's not a reason NOT to do it with guidance, but you have to be aware of it. 

• The maximum annual HSA contribution as of 2026 is $4,400.00 for individuals and $8,750.00 for families. This works out to approximately $180 per paycheck. You don't have to prioritize maxing it out, but it's got good tax advantages if you have any extra money to throw in there. 

Leaving/graduation, important considerations for your 403b:

• If you withdraw the money from a retirement count like a 401K, 403B, Traditional IRA, Roth IRA (Independent retirement account) before the age of 59.5years there are significant penalties that you are charged.  You have a few options of what you can do with this money.

  • 1. You can keep it with trinity health. You won't be contributing to it anymore and your match doesn't change, but there may be management/administrative fees and poorer investment options. Also may be harder to track as you move on in your career

  • 2. you can "rollover" the amount into your new employer's retirement 403b/401K to keep things in one place

  • 3. you can open a Rollover IRA and place the money in there, not associated with an employer.  If you want to do this as a rollover into a ROTH IRA as your income as a new attending will skyrocket this will likely have to be "backdoored" which I recommend you reach out to a real advisor for those steps. 

• Note that if you are doing a ROTH 403b, the rollover should be to a ROTH IRA (contribution limits discussed below don't count when it's rollover from another account), just like a pre-tax 403b should go to a traditional pre-tax IRA. if you start mixing these pre and post-tax monies, the government will start assuming what is pre and post-tax and will charge you far more taxes assuming that the lion's share is pre-tax. 

• IMPORTANT POINT- if you are rolling it over into another account instead of keeping it at trinity, you have to set this up with your receiving financial institution. you will have the option to either have it transferred directly electronically, or your current 403b will generate a check that will be sent to your mailing address. it is EXTREMELY important that you deposit this check directly into the retirement vehicle of your choice (401k, 403B, IRA) and NOT into your checking/savings account. While at the time of this writing you have 30 days in order to transfer this fund to the retirement account of your choice, if you miss this window, you will be charged all the taxes and penalties as if you had withdrawn early. 

Traditional and ROTH IRAs:  IRA = independent, doesn't need an employer to sponsor the plan

• both IRAs can be used to pass on to family tax free in the event of your death, but you know, thats thinking WAY far out. 

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• ROTH IRA

  • This is money taken out after taxes, so whatever your tax bracket is for your little residency salary is what is taken, not the big attending tax bracket you will get someday. 

  • You get to have tax-free growth and tax-free withdrawals. How it DIFFERS from a 403b is that you can take out money that you contributed any time before age 59.5 (but I wouldn't recommend it, you need it in there to grow) and only pay penalties if you are trying to take out the growth it has made. 

  • The maximum yearly contribution to ROTH IRA in 2026 is $7500. It's worth at least trying to max this out if you can because the tax free growth is a big deal, it is portable so you dont have to worry about rollovers and changing employers etc etc. 

  • Important point is if you open one of these accounts you have to go in and decide where to invest this money. Just having it sit in the account without investing will mean little to know growth over time and time is your biggest asset. 

  • Added bonus is that you dont get the tax refund money that you may be tempted to spend immediately every year, but you may think of this as a negative and want to use this money towards your debts instead. 

  • Noteworthy it's worth maxing out the ROTH IRA early because there's an income limit, as listed below. Once you get your first attending salary, if you still want to contribute you will have to do a "backdoor" roth. Again, if this comes to you, talk to a financial advisor or accountant. 

  • you have until the tax filing deadline of that previous year to contribute to those ROTH accounts. eg if i wanted to contribute to the 2025 ROTH IRA account, I could still put money in until April 15, 2026. 

• Traditional IRA

  • Anyone can set this up; there is no income limit, but the elective contribution limit to a traditional IRA and a ROTH IRA COMBINED is $7500 (in 2026) so you can't contribute 7.5k to traditional and another 7.5k to ROTH. 

  • Traditional IRA, like the 403b, you will have to start taking the minimum distribution by age 73. 

Backdoor ROTH IRA

• TBD