maryfran123 Posted November 10, 2005 Share Posted November 10, 2005 Hi everyone, Just want to offer a piece of advice to all those new PA-C's, especially those of you in your 20's starting your new jobs Make sure to take advantage of whatever retirement plan your employer offers right off the bat. Don't make the mistake of thinking "I'm 24, I won't be retiring for years, I'll do it later, I don't want to see my net pay go down, I want to live, buy a fancy car, etc" These are all the things I said as a new PA-C at the age of 22. I lost out on over 5yrs of compound interest because of that type of thinking. Now, at 40, I look back and think how foolish I was and have nothing really concrete to show for that little bit of extra net pay I wanted so badly at the time. To give you a concrete example I got from work: A 20yo starts investing $2000/yr into tax deferred investment(TDI). After 10yrs she stops and just decides to let the $$ grow until she retires. Total investment over 10yrs =$20,000 A 30yo, working since the age of 20, just starts to invests at the age of 20. He invests $2000/yr in a TDI until he retires at the age of 65. Total investment over 35yrs=$70, 000 Both investments earn a hypothetical 8%. Who as more money at age 65? Time and compound interest favor the 20yr old. She will have $462,648 at age 65 and the 30yo will have $372,204. So, even if you start with small amounts, the longer you save, the better off you'll be at retirement that starting later, even at larger amounts. Looking back, I wish my PA program had spent more time as it we got closer to graduation about the financial aspects of our profession. Maybe they do now but in 1987, I wasn't taught very much about how to manage my $$. Link to comment Share on other sites More sharing options...
Monica Posted November 10, 2005 Share Posted November 10, 2005 Thank you MaryFran I do appreciate the advice. :D Link to comment Share on other sites More sharing options...
Piper Posted November 11, 2005 Share Posted November 11, 2005 Excellent advice, Maryfran! I wish your post had been around for me to read 20 years ago. Partly due to financial ignorance and partly due to the "I have years before I have to think about retirement" mentality I had, I have an amount of catch-up work to do now at age 46 that seems impossible. :eek: You may think you will miss the extra money, but you won't. Payroll deductions and electronic fund transfers make it a pretty painless habit that will be become second nature. Now I gotta go buy that lottery ticket........ Link to comment Share on other sites More sharing options...
NoClinic4Me Posted November 11, 2005 Share Posted November 11, 2005 I would even go a step further to say that one should factor in the amount of employer match and the quality of retirement plan in your decision on which job to take. I will ALWAYS opt for a little less salary in return for more contribution to the retirement plan. It is forced savings, which is especially good for those who have difficulty saving. My wife and I work at the same place and are both PA's. We have 14% of our combined salaries going into 403(b)'s, 6% ours, 8% theirs. That's 8% more pay, even more when you consider the tax savings! We don't even notice it coming out. This is sound advice. I am a big proponent in forced retirement contributions with an employer match. That is what ours is. Frankly, some people are just too "stupid" to realize how great an employer match really is and will not take advantage of it if given a choice. That 5 series Bimmer now is nothing compared to the 2 911's you can buy when you retire rich:D. Now you can only drive it to and from work. It will be a lot more fun when don't have to go to work and can drive all day! Pat Pat Link to comment Share on other sites More sharing options...
Guest pac4hire Posted November 11, 2005 Share Posted November 11, 2005 I would even go a step further to say that one should factor in the amount of employer match and the quality of retirement plan in your decision on which job to take. I will ALWAYS opt for a little less salary in return for more contribution to the retirement plan. It is forced savings, which is especially good for those who have difficulty saving. My wife and I work at the same place and are both PA's. We have 14% of our combined salaries going into 403(b)'s, 6% ours, 8% theirs. That's 8% more pay, even more when you consider the tax savings! We don't even notice it coming out. This is sound advice. I am a big proponent in forced retirement contributions with an employer match. That is what ours is. Frankly, some people are just too "stupid" to realize how great an employer match really is and will not take advantage of it if given a choice. That 5 series Bimmer now is nothing compared to the 2 911's you can buy when you retire rich:D. Now you can only drive it to and from work. It will be a lot more fun when don't have to go to work and can drive all day! Pat Pat Ouch...was that directed at me?????? Pat i also save 15% of my py, but it works out because 100% is employer contribution. I am the employer and wrote this into my company bylaws tht 100% of my retirement was emloyer contribution so i get double tax benifits. I dont have to take the savings as income and if i wit untill im 65 i dont pay taxes on it then. Not to mention i am already drawing a retirement check from uncle sam (im only 31) i am medically retired from the army after 3 broken bones in my back (holland DZ). Link to comment Share on other sites More sharing options...
Marlene G Posted November 11, 2005 Share Posted November 11, 2005 It's never too late, even for a new PA like me - starting out at age 46. Maryfran is 100% correct. At 46, I would love to be able to take nice vacations with a little extra cash, but I will live to regret that when I want to retire. Link to comment Share on other sites More sharing options...
NoClinic4Me Posted November 11, 2005 Share Posted November 11, 2005 Ouch...was that directed at me?????? Pat i also save 15% of my py, but it works out because 100% is employer contribution. I am the employer and wrote this into my company bylaws tht 100% of my retirement was emloyer contribution so i get double tax benifits. I dont have to take the savings as income and if i wit untill im 65 i dont pay taxes on it then. Not to mention i am already drawing a retirement check from uncle sam (im only 31) i am medically retired from the army after 3 broken bones in my back (holland DZ). Of course not! I jusr remembered you did just buy a new Bimmer:D Sorry! I was urging folks to do the retirement thing first, then worry about the wheels! If you can do both, great! A lot of 22 y/o think about the flash and not the retirement cash. Pat Link to comment Share on other sites More sharing options...
maryfran123 Posted November 11, 2005 Author Share Posted November 11, 2005 I would even go a step further to say that one should factor in the amount of employer match and the quality of retirement plan in your decision on which job to take. I will ALWAYS opt for a little less salary in return for more contribution to the retirement plan. It is forced savings, which is especially good for those who have difficulty saving. Pat---excellent, EXCELLENT point!!! Frankly, some people are just too "stupid" to realize how great an employer match really is and will not take advantage of it if given a choice. Pat--I'm not so sure it is "stupid" as much as an un-informed/un-educated decision. Truly, unless you came from a family that was good with money and passed that on to you during childhood/adolescence, most people gain the information over time and thru trial and error. I came from a family with very little money, parents that worked ALOT of double shifts to make ends meet and still send all of us to private school, lived on credit cards when my dad was laid off or on strike, etc. So, there was never really $$ to save because i we usually were living check to check. Therefore, saving was not part of my experience. That's why I was suggesting that the PA programs do a better job of educating this overwhelmingly young group of future PA's about finances. Something like a day long seminar a few months before graduation to go over contracts/negotiations and saving/investing. I know when I graduated in my very early 20's, I would have welcomed the advice Link to comment Share on other sites More sharing options...
NoClinic4Me Posted November 11, 2005 Share Posted November 11, 2005 Pat---excellent, EXCELLENT point!!! Pat--I'm not so sure it is "stupid" as much as an un-informed/un-educated decision. Truly, unless you came from a family that was good with money and passed that on to you during childhood/adolescence, most people gain the information over time and thru trial and error. I came from a family with very little money, parents that worked ALOT of double shifts to make ends meet and still send all of us to private school, lived on credit cards when my dad was laid off or on strike, etc. So, there was never really $$ to save because i we usually were living check to check. Therefore, saving was not part of my experience. You're right, that was a little harsh:o I come from parents who tried as hard as they could to make ends meet and were poor savers. They finally got the picture, but still probably have less retirement savings than I do. They are quite a bit more frugal than I and will likely do fine;) Pat Link to comment Share on other sites More sharing options...
mjl1717 Posted November 11, 2005 Share Posted November 11, 2005 Yeah its ALWAYS "if i knew then what I know now" (eg. I may as well finance a SAAB convertible!) Thank you for the big time advice and reinforcement.!!!!!!!!!!!!!!!!!!!!!!!! Link to comment Share on other sites More sharing options...
JENpa2005 Posted November 30, 2005 Share Posted November 30, 2005 As a new physician assistant beginning my employment search, I enjoy this wisdom that is either learned from not doing or doing experience. Anyother advice for us new PAs will be greatly appreciated by me and im sure all others in any aspect. Link to comment Share on other sites More sharing options...
Moderator EMEDPA Posted December 1, 2005 Moderator Share Posted December 1, 2005 more advice for new grads..... your 1st job IS NOT about making money, it is about learning to function as a pa in the real world.....it is much better to take a job that pays 60k working for an md who loves to teach and will gradually increase your responsibilities and salary than to work in a setting that pays 100k and expects you to know everything and ask no questions.after you learn the ropes then it's time to look for the lifestyle/big money job..... Link to comment Share on other sites More sharing options...
mailrn3 Posted February 13, 2006 Share Posted February 13, 2006 I agree.........very good advice Mary Fran Alan Link to comment Share on other sites More sharing options...
Guest zulu62 Posted February 13, 2006 Share Posted February 13, 2006 Check out : www.totalmoneymakeover.com It's not a cult, it's not a scam, it's just good old-fashioned advice that somebody finally put all together. Link to comment Share on other sites More sharing options...
Esmerelda Posted February 13, 2006 Share Posted February 13, 2006 AWESOME advice. I started investing 12% of my salary into a 403(b) with 6% match starting day one. I also, with my first paycheck started investing in a Roth IRA ($2,000/year). Whatever was left was my budget. I bought a formally leased Honda Civic (about 25,000 miles). I paid it off in five years. Since, I was so used to the car payment, when I finished paying I redirected the money into a Money Market account. Each month, religiously, I put in the amount of the loan into this account. It will serve the purpose of emergency fund or can be used to buy a new car. I'm hoping by the time I need a new car, I will have the cash up front. I recently used some of it to open a mutual fund and will put a small portion into the fund. I wanted something that could be high yield, yet available. Link to comment Share on other sites More sharing options...
tool man Posted February 13, 2006 Share Posted February 13, 2006 I would go with EMED's advice. It's not so much about money as it is about T..E.A..C..H..I..N..G. Take a 1st job where you're with a doc who is 1) a good teacher 2) will take the time to teach. Money will come after knowledge arrives. High pay with little knowledge is a recipe for major frustration by everyone. Link to comment Share on other sites More sharing options...
andersenpa Posted February 14, 2006 Share Posted February 14, 2006 Running with EMED/Toolman's advice, resdiency is a good choice for those desiring/able to sacrifice in their first 1-2 yrs after school. My residency paid in the low 40s, but the experience gained was immeasurable (as were the sleepless hours, pimping rounds, etc...). It may lead to a higher paying job down the line- compared to those with equivalent years out of PA school; it certainly will make you more confident and knowledgable. Some people don't care for the resident lifestyle, and it's particularly tough for those w/ spouses and families. If you have the personal life to spare, however, you might find it very rewarding.... Link to comment Share on other sites More sharing options...
Lightfoot Posted March 14, 2006 Share Posted March 14, 2006 Absolutely...you need to start saving as soon as possible AND take advantage of any retirement, 401-K or savings program your employer may offer. I spent the first 17 years of my career as a PA in a practice with essentially no benefits. A retirement plan, employer-funded, was started several years before I left, so I did get a few dollars stashed away there. I have now spent the last 17 years trying to take advantage of the benefits I do have. While they are good, I am 20+ years behind. My "golden years" won't be all that golden. I plan to work part time at McDonald's or Wal-Mart after I retire -- seriously. Admittedly, there is more to life than accumulating wealth for retirement. Life has so many variables that we often forget to live for today. I see people so hung-up on the miniscule changes in their investments that they are no fun to be around. I'd rather live simply and gracefully surrounded by those I care for and who care for me -- and to continue to contribute, in some small way, to life's greater purpose. Link to comment Share on other sites More sharing options...
Guest zulu62 Posted March 15, 2006 Share Posted March 15, 2006 I shudder at the thought of taking PANRE when I'm 60 or 65, but I guess people do it. Absolutely...you need to start saving as soon as possible AND take advantage of any retirement, 401-K or savings program your employer may offer. I spent the first 17 years of my career as a PA in a practice with essentially no benefits. A retirement plan, employer-funded, was started several years before I left, so I did get a few dollars stashed away there. I have now spent the last 17 years trying to take advantage of the benefits I do have. While they are good, I am 20+ years behind. My "golden years" won't be all that golden. I plan to work part time at McDonald's or Wal-Mart after I retire -- seriously. Admittedly, there is more to life than accumulating wealth for retirement. Life has so many variables that we often forget to live for today. I see people so hung-up on the miniscule changes in their investments that they are no fun to be around. I'd rather live simply and gracefully surrounded by those I care for and who care for me -- and to continue to contribute, in some small way, to life's greater purpose. Link to comment Share on other sites More sharing options...
Moderator ventana Posted May 12, 2006 Moderator Share Posted May 12, 2006 Absolutely...you need to start saving as soon as possible AND take advantage of any retirement, 401-K or savings program your employer may offer. I spent the first 17 years of my career as a PA in a practice with essentially no benefits. A retirement plan, employer-funded, was started several years before I left, so I did get a few dollars stashed away there. I have now spent the last 17 years trying to take advantage of the benefits I do have. While they are good, I am 20+ years behind. My "golden years" won't be all that golden. I plan to work part time at McDonald's or Wal-Mart after I retire -- seriously. Admittedly, there is more to life than accumulating wealth for retirement. Life has so many variables that we often forget to live for today. I see people so hung-up on the miniscule changes in their investments that they are no fun to be around. I'd rather live simply and gracefully surrounded by those I care for and who care for me -- and to continue to contribute, in some small way, to life's greater purpose. A few thoughts..... If you have a 401 or 403 contribute atleast enought to get 100% benefit of a match (it is FREE MONEY!!!) Roth IRA's are your friend - max out the contribution - going up to $5k/year soon Don't buy into this fund or that fund because look - "our fund had a XX% return over the past X nubmer years" - little secret here - a monkey throwing darts at the sunday newspaper has just as much chance to beat the market as the high priced fund managers..... Index funds are the best options, very low expense ratio (makes a HUGE difference in the long run) and they just match the market. (about 11%) Don't get car loans - you NEVER win with these - drive a beater, ride a bike do whatever to not put money into something that looses 10-20% of it's value every year. Wait till you are filthy rich retiring at 55 to buy those :cool: Keep a spare 6 months of fixed expenses sitting around in cash (just about everyone doesn't do this anymore, but it is founded on good ideas) for most PA'a making 75k a year that might figure out to about 10k ina bank (GUESS) Automatic withdrawls to a savings account (preferable passbook so it is hard to access) on a weekly basis from you primary account can make an easy way to save that you never really feel - or better yet get a % of you paycheck put into a seperate account. Remember - "The key to saving is spending less then you make" Sounds really simple but live by it!! Ventana PA-C, MBA, Business Owner, Realestate Owner, living tight now to retire at 55!!! Final thought - emerging market ie china and india might be a wise investement??? Link to comment Share on other sites More sharing options...
JasonR Posted June 8, 2006 Share Posted June 8, 2006 I will be graduating soon and I suggest the book: Rich Dad, Poor Dad by Robert T. Kiyosaki This is a good book for those wanting to start learning to do more with their money than put it back in 401ks or IRAs. While those are good plans for those who do not wish to learn about taxes, business, and accounting, this book offers another way of thinking. There are no get-rich-quick schemes in the book, nor is there any specific advise as to what to invest in. Just gives a new approach to managing money by changing the traditional way of viewing it. Enjoy!:) Link to comment Share on other sites More sharing options...
Guest PA4me Posted February 1, 2007 Share Posted February 1, 2007 WOW, this is excellenct advice! I'm 24 years old and recently started a ROTH IRA, is multiple plans the way to go? Also, has anyone found out ho to make residual income in this field as well? Link to comment Share on other sites More sharing options...
Nicole333 Posted June 7, 2007 Share Posted June 7, 2007 wow--great post. A little scary though. I graduated last year and live at home right now so I'm trying to save emergency cash in case I'm jobless, or just to go on a mini trip while I have this luxury. I could totally afford to buy a new car, but I have no need to. I love to shop and eat out though :) I have some savings, but not sure where to invest it. So an IRA? Mutual funds? My company offers retirement match, but after one year. Link to comment Share on other sites More sharing options...
maryfran123 Posted June 8, 2007 Author Share Posted June 8, 2007 Nicole, If you job offers retirement match make sure you sign up ASAP. Even if they don't start the match for one year, it is an extra year of the $$$ you invest earning interest. For your "emergency" savings, if you have it in a regular type savings account that earns minimal interest, you may want to consider an online savings account such as the ones ING and HSBC offer. I opened one in Jan and earned 6% until the end of April and currently my rate is a little over 5%. You'd be hard pressed to find a bank and/or CD that matches that rate. You can easily access this money even though it is an online bank. They are FDIC insured. Regarding mutual funds, this is to invest in if you can afford to lose the $$. Not a good place for your emergency cash. If you meet the qualifications, I suggest a ROTH IRA over a conventional one. With the ROTH you pay the taxes on the money up front, so when you start making withdrawals at retirement, you don't pay taxes on it. Also, it is worth taking the time now to learn how best to invest and set financial goals. Lots of info on the internet and at your local Barnes and Noble or Borders. I like to go, grab a bunch of books, browse thru them, take notes on what I find useful. I REALLY like Suze Orman. She has a new book called "Woman and Money" which has some great info in it. Link to comment Share on other sites More sharing options...
kittryn Posted June 8, 2007 Share Posted June 8, 2007 this is a great thread, really important. I switched to a PT urgent care job recently at a university that offers 5% plus a 5% match added to my 5% contribution -- that's 15% of my salary put into a 401K every year, 10% of that is FREE MONEY. my husband teaches at the same university and gets the same thing, so we're each getting 10% of our salaries in FREE MONEY. I only wish I had had the wits to do this kind of thing when I was younger -- I am 49 and so will miss all that lovely compound interest that was mentioned.....my husband is younger though, so he'll get more.. :D at my old FT job I had a higher paycheck, but they took 11% out of my OWN money and put it in a pension -- with no match. another thing to think about (for those of us with kids) -- I (and my husband) get FREE tuition for our offspring at the university we work at -- a VERY big deal! I still get the benefit as a PTer with 24 hrs/week - it's worth checking out these jobs in your local area if you have children. ;) Link to comment Share on other sites More sharing options...
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