Transitioning from Pension job to private practice

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kiva22
Posts: 71
Joined: Sat Jul 30, 2016 2:56 am

Transitioning from Pension job to private practice

Post by kiva22 » Wed Oct 04, 2017 2:05 am

Greetings

I've read through a few threads on the pension vs. other job topic and have my own situation to throw out there. First, the essentials:

Emergency funds: Yes
Debt: Student Loan: $14.5k @ 3.125% (9 years left). Primary Mortgage (280k @ 3.0%; 15yrs left; value = 385k). Rental Property: (365k @ 4.125%; 28 years left; value 550k).
Tax Filing Status: Married Filing Jointly (with Dependent Children)
Tax Rate: 25% Federal, 8% State
State of Residence: CA
Age: 47; spouse 45
Desired Asset allocation: 70% stocks / 30% bonds (just pulled this from the videos; open to feedback)
Desired International allocation: 20% of stocks (again, just pulled from videos)

Current Portfolio: low six-figures, not including state pension

Current retirement assets

Taxable: None

Other:

His 403b:

Vanguard Target Retirement 2025 Fund Investor Shares: 87% (ER: 0.14%)

His Roth 403b at Fidelity: 4.3%
Fidelity Total Market Index Fund, Premium Class (FSTVX): ER = .045%
Fidelity International Index Fund, Premium Class (FSIVX): ER = .08%
Fidelity U.S. Bond Index Fund, Premium Class (FSITX): ER = .05%

His Roth IRA @ Vanguard: 1.3%
Vanguard Target Retirement 2025 Fund Investor Shares (VTTVX): ER: 0.15%

Her Roth IRA @ Vanguard: .5%
Vanguard Target Retirement 2040 Fund ; ER: 0.16%)

Her Traditional IRA @ Vanguard .25%
Vanguard Target Retirement 2040 Fund Investor Shares (VTTHX): ER: 0.16%

His Traditional IRA @ Vanguard): 5.7%
Vanguard Target Retirement 2035 Fund Investor Shares (VTTHX): ER: 0.15%

Class 529-A for Kid A (Age = 5)
Scholarshare Passive Age-Based Portfolio, 5-8 (ER: 0.15%)

Class 529-A for Kid B (Age = 5)
Scholarshare Passive Age-Based Portfolio, 5-8 (ER: 0.15%)

because the following details are likely relevant to the questions coming:
Income
His:
District Pension Job: 68,800/yr (gross; 80% of salary schedule)
University Adjunct Faculty: 4800/yr
Private Practice: $5k/yr before taking day leave; after, roughly projected to be 20-40k

Hers:
State Job (pays into calPERS): $35k/yr (working 50%). Will stay part-time until kids hit middle school or so. Extra income likely once she completes her LCSW. We have amazing health care through this job (costs us $7200/yr to cover all 4 of us; $15 co-pay, no deductibles).

Current retirement contributions:

$4200/yr His Roth IRA
$4200/yr Hers Roth IRA
$400/yr rollover from university Savings Plus into IRA

the above does not include any private practice retirement contributions

I work in education as a School Psychologist and I also have an MFT license. After this year, I will have 18 years of service credit in calSTRS (2% @ 60 defined benefit). I've got some pretty hard-core burnout going right now (a different thread, I suppose, but I can get into it here if people think it is relevant). My wife and I have been discussing a move for me to private practice and, the current school year, I took a .2 (1 day/week) leave from my district job. I'm doing some 10-99 contract work and seeing private clients. At this point, I will likely make more - after taxes - than I was. Not a bunch more, but not less, which was a fear.

During my first 17 years of employment, I had not found bogleheads and had nobody competent advising me on finances. As a result, I was not increasing my 403b contributions as I received raises. Just dumb. No other excuse. As a result, our total non-pension retirement assets are low 6-figures. I have since upped our contributions. That is where my questions come in:

(1) As I make this move, how much of my private practice income should I be putting into retirement? Right now, I take each month's income, put 20% of it into retirement (IRA, for now, until we max those out then I suppose I'll go back to a 403b contribution balanced with my private income tax that I set aside?), I put aside 30-40% of the remainder for taxes, pay the business expenses, then pull what's left into our family budget as income. I know we're behind retirement amounts-wise, so is the answer just "as much as you possibly can until you max out both IRA's and a 403b?"

(2) Any other financial-suggestions related to such a move? We're in the process of getting a new CPA (our current one is getting close to retirement). I know we're going to have to start to build up a larger emergency fund to handle me being out of work. I also heard that once I hit 40k in private income, I should file as an s-corp in CA, but I suppose that's a question for the CPA. Other considerations?

(3) the "human" factor. I originally wanted to ask "am I nuts to leave a pension job?". But, I know that there is no guarantee that said pension will be there when I retire in 12-15 years. In addition, I know that if I don't do this, when I turn 60 (if the job stress doesn't kill me before then), I'll always wish I had given it a whirl. I am able to take a leave of absence giving me rights to my job and can do for a year or two before relinquishing. So, if it sucks, I can go back. Right now, I can't tell you how much more I enjoy my private practice days vs. my district time. My wife noticed the mood difference immediately. I'm already full clients-wise and thinking of opening up another day. I am open to any feedback on the 'human' side of this process.

(4) I currently pay $132/mo for disability insurance through work. I am not eligible for Social Security Disability benefits. calSTRS does have a 1 year disability benefit (e.g. i get sick, injured, etc.) available. The $132/mo plan requires that I burn through all my sick leave before accessing (I have about 4 months accrued). Also, it has a 6x/yr @ $150/ea Physician's Expense Benefit for going to the doctor when you get hurt. That helps defray the cost. Should I keep this policy until I leave completely or just dump now?

I think that's it for now. Thank you for your time.

matt

Valuethinker
Posts: 32899
Joined: Fri May 11, 2007 11:07 am

Re: Transitioning from Pension job to private practice

Post by Valuethinker » Wed Oct 04, 2017 2:38 am

kiva22 wrote:
Wed Oct 04, 2017 2:05 am
Greetings

I've read through a few threads on the pension vs. other job topic and have my own situation to throw out there. First, the essentials:

Emergency funds: Yes
Debt: Student Loan: $14.5k @ 3.125% (9 years left). Primary Mortgage (280k @ 3.0%; 15yrs left; value = 385k). Rental Property: (365k @ 4.125%; 28 years left; value 550k).
Tax Filing Status: Married Filing Jointly (with Dependent Children)
Tax Rate: 25% Federal, 8% State
State of Residence: CA
Age: 47; spouse 45
Desired Asset allocation: 70% stocks / 30% bonds (just pulled this from the videos; open to feedback)
Desired International allocation: 20% of stocks (again, just pulled from videos)

Current Portfolio: low six-figures, not including state pension

Current retirement assets

Taxable: None

Other:

His 403b:

Vanguard Target Retirement 2025 Fund Investor Shares: 87% (ER: 0.14%)

His Roth 403b at Fidelity: 4.3%
Fidelity Total Market Index Fund, Premium Class (FSTVX): ER = .045%
Fidelity International Index Fund, Premium Class (FSIVX): ER = .08%
Fidelity U.S. Bond Index Fund, Premium Class (FSITX): ER = .05%

His Roth IRA @ Vanguard: 1.3%
Vanguard Target Retirement 2025 Fund Investor Shares (VTTVX): ER: 0.15%

Her Roth IRA @ Vanguard: .5%
Vanguard Target Retirement 2040 Fund ; ER: 0.16%)

Her Traditional IRA @ Vanguard .25%
Vanguard Target Retirement 2040 Fund Investor Shares (VTTHX): ER: 0.16%

His Traditional IRA @ Vanguard): 5.7%
Vanguard Target Retirement 2035 Fund Investor Shares (VTTHX): ER: 0.15%

Class 529-A for Kid A (Age = 5)
Scholarshare Passive Age-Based Portfolio, 5-8 (ER: 0.15%)

Class 529-A for Kid B (Age = 5)
Scholarshare Passive Age-Based Portfolio, 5-8 (ER: 0.15%)

because the following details are likely relevant to the questions coming:
Income
His:
District Pension Job: 68,800/yr (gross; 80% of salary schedule)
University Adjunct Faculty: 4800/yr
Private Practice: $5k/yr before taking day leave; after, roughly projected to be 20-40k

Hers:
State Job (pays into calPERS): $35k/yr (working 50%). Will stay part-time until kids hit middle school or so. Extra income likely once she completes her LCSW. We have amazing health care through this job (costs us $7200/yr to cover all 4 of us; $15 co-pay, no deductibles).

Current retirement contributions:

$4200/yr His Roth IRA
$4200/yr Hers Roth IRA
$400/yr rollover from university Savings Plus into IRA

the above does not include any private practice retirement contributions

I work in education as a School Psychologist and I also have an MFT license. After this year, I will have 18 years of service credit in calSTRS (2% @ 60 defined benefit). I've got some pretty hard-core burnout going right now (a different thread, I suppose, but I can get into it here if people think it is relevant). My wife and I have been discussing a move for me to private practice and, the current school year, I took a .2 (1 day/week) leave from my district job. I'm doing some 10-99 contract work and seeing private clients. At this point, I will likely make more - after taxes - than I was. Not a bunch more, but not less, which was a fear.

During my first 17 years of employment, I had not found bogleheads and had nobody competent advising me on finances. As a result, I was not increasing my 403b contributions as I received raises. Just dumb. No other excuse. As a result, our total non-pension retirement assets are low 6-figures. I have since upped our contributions. That is where my questions come in:

(1) As I make this move, how much of my private practice income should I be putting into retirement? Right now, I take each month's income, put 20% of it into retirement (IRA, for now, until we max those out then I suppose I'll go back to a 403b contribution balanced with my private income tax that I set aside?), I put aside 30-40% of the remainder for taxes, pay the business expenses, then pull what's left into our family budget as income. I know we're behind retirement amounts-wise, so is the answer just "as much as you possibly can until you max out both IRA's and a 403b?"

(2) Any other financial-suggestions related to such a move? We're in the process of getting a new CPA (our current one is getting close to retirement). I know we're going to have to start to build up a larger emergency fund to handle me being out of work. I also heard that once I hit 40k in private income, I should file as an s-corp in CA, but I suppose that's a question for the CPA. Other considerations?

(3) the "human" factor. I originally wanted to ask "am I nuts to leave a pension job?". But, I know that there is no guarantee that said pension will be there when I retire in 12-15 years. In addition, I know that if I don't do this, when I turn 60 (if the job stress doesn't kill me before then), I'll always wish I had given it a whirl. I am able to take a leave of absence giving me rights to my job and can do for a year or two before relinquishing. So, if it sucks, I can go back. Right now, I can't tell you how much more I enjoy my private practice days vs. my district time. My wife noticed the mood difference immediately. I'm already full clients-wise and thinking of opening up another day. I am open to any feedback on the 'human' side of this process.

(4) I currently pay $132/mo for disability insurance through work. I am not eligible for Social Security Disability benefits. calSTRS does have a 1 year disability benefit (e.g. i get sick, injured, etc.) available. The $132/mo plan requires that I burn through all my sick leave before accessing (I have about 4 months accrued). Also, it has a 6x/yr @ $150/ea Physician's Expense Benefit for going to the doctor when you get hurt. That helps defray the cost. Should I keep this policy until I leave completely or just dump now?

I think that's it for now. Thank you for your time.

matt
I am not an American nor US based, so you have to take this all with that extreme caveat.

Re 1 - save as much as you can consistent with an acceptable lifestyle. You don't know what life will throw up and savings is the one way that you can protect yourself and your family in the future (if for example you were not around)

Re 3 - I should tell a psychologist this (adopts best Brooklyn accent)! You regret in life what you didn't do, not what you did do-- in the long run. So of course you should give it a try. Crunch point is when you make it permanent.

Re 4 - Yes you should keep the disability *if* you would still be eligible to collect (you need to read the exclusion clauses carefully!). Also normally they replace a percentage of income *based on your most recent income* so if your income drops (for a while) you might have lower protection. I would still keep it though-- most workers, and especially the self employed, are badly underprotected against disability (which impacts something like 1/4 before age 65?)

User avatar
catdude
Posts: 1358
Joined: Mon Jul 16, 2007 8:11 pm
Location: Central Oregon

Re: Transitioning from Pension job to private practice

Post by catdude » Wed Oct 04, 2017 3:05 am

OP, here's a website that you may find useful --

http://www.pensiontsunami.com

It's updated daily with links to media articles, blog posts, etc. The primary focus of the site is the ongoing pension crisis in California (CalPERS, CalSTRS, various municipalities, etc.); but other states are covered as well (I often alert the website owner when I see pension-related articles in the Oregon media). I suggest you bookmark this site and check it out often -- it'll help you keep up with pension news.
catdude | | “The holy passion of Friendship is of so sweet and steady and loyal and enduring a nature that it will last through a whole lifetime, if not asked to lend money.” (Mark Twain)

Lafder
Posts: 3531
Joined: Sat Aug 03, 2013 7:56 pm
Location: East of the Rio Grande

Re: Transitioning from Pension job to private practice

Post by Lafder » Wed Oct 04, 2017 8:31 am

70/30 seems reasonable. We are average age 51 and we are aiming for 65/35 after years of 80/20.

20% International is a bit low from Vanguard's recs of 30-50% of stocks. But within the range rec here of 0-50%

Life is too short to be stuck in a job you are burned out on. It could be that a year of private practice makes you prefer the current job where you are not running a business. Or maybe you will switch to full time private practice. I am in a private practice and I like being my own boss, and my entire staff of just me means I can only blame myself for things I don't get done, and I do not have to fix other people's mistakes.

I would look into a solo401k since it will allow you to put a higher amount away pretax for the same income as employer and employee. I set mine up through Fidelity because they allow other retirement accounts to be rolled in and have lower fee funds that Vanguard for solo401k.

I have no idea of at what point to incorporate. I have not done so. The income amount my accountant said would possibly make a tax difference was high enough that I would be maxing my SEP or solo401k. I was told it does not make a legal difference in protecting from a lawsuit.

An accountant will tell you what you need for private practice such as a business license, tax ID number, paying estimated taxes, whether you have to pay gross receipts tax etc etc. See what they tell you. I only use my accountant to do my tax return. But she provides estimated tax forms I file myself 4 times a year. I do my own gross receipts/sales tax. It may or may not be due in your state. Your accountant will set things up so you are paying into social security. There was something about it being different if a spouse is paying into social security. The accountant will have to explain it. My spouse has a W2 job and it effected how she calculates the taxes I owe.

I would call several ? many other private practice folks and go see their offices and see how they have things set up and have them explain how they do things. Ask about any tips and their experiences with insurance and any other unexpected complications of private practice. Ask about the business details. Maybe there is a peer support group who meet and discuss cases and practice issues?

? EMR or no. Talk to other private practice folks. What do they use for records, appointment reminders, receipts, how do they keep track of expenses, income etc. (I have a separate bank account just for work and put all work income there and pull expenses from there).

You will need to check on malpractice insurance and office insurance. KISS in regards to office space and supplies. You can always expand and get nicer things if you get busier. My first office was mostly donated furniture and I kept my start up costs under 10k which included the rent deposit etc. Can you sublease office space? Join others ?

I also started one day a week. I sent notice to all referral sources I could think of and it has built up from there with no advertising.

Are you going to take insurance? My rec is don't do it. You will spend too much time billing insurance, tracking down payments, and it complicates your accounting system. Fee for service and being paid at the time of the visit keeps it simple. Yes some folks won't schedule. But it gives you more time to do what you do, and that is not billing insurance...................or keeping track of a billing person handling it.

Yes my answer is put away as much as you can, after meeting living expenses. With a solo401k you can make contributions of different sizes through the year. As long as the account is set up before the end of the year, you have until your tax deadline to fund. So you do not have to pick a % of income early, or even pick a %at all, you can simply send in as much as you can "afford" after bills are paid etc. Be sure it is no more than a %of income your accountant explains to you so you don't overfund.

I would keep the disability insurance for now. I never did pay for private disability insurance. It just seemed too expensive.............I have paid into social security enough years that it is my disability plan. Well, my real plan is to not become disabled..............

My husband is currently contemplating a job change. Financially it is scary. He is at the point he wants to stop the old and take a break before finding a new one. So that "human" factor has been on my mind a lot. The recent Las Vegas incident, plus all of the hardship of recent national disasters and seeing people lose everything including loved ones etc helps me put things in perspective. Will we have to budget more carefully............of course. But since we are not at risk of being homeless by far, we will find a way to make it work on one salary til he is able to find a job he likes better. I feel very privileged to have this option. But I am also anticipating I will be under more stress as the sole provider in upcoming months.

An issue with private practice is that it is NOT salary. Month to month income can vary greatly. But over time you will figure out how steady or unsteady the income is.

As long as you can cover living expenses, I think it is ok to make a change. I started my private practice one day a week. I think that easing into it so there is more clarity on income potential makes the most sense. Don't let go of the security of the paycheck til the self employment income is more clear. Especially with so little emergency funds.

Is your rental cash flow positive ? It seems you have some equity there.

Best wishes,
lafder

kiva22
Posts: 71
Joined: Sat Jul 30, 2016 2:56 am

Re: Transitioning from Pension job to private practice

Post by kiva22 » Wed Oct 04, 2017 10:43 pm

comments below
Lafder wrote:
Wed Oct 04, 2017 8:31 am
70/30 seems reasonable. We are average age 51 and we are aiming for 65/35 after years of 80/20.

20% International is a bit low from Vanguard's recs of 30-50% of stocks. But within the range rec here of 0-50%

thanks for this. I will continue to research and make adjustments, particularly considering the likely solo401k mentioned below.

Life is too short to be stuck in a job you are burned out on. It could be that a year of private practice makes you prefer the current job where you are not running a business. Or maybe you will switch to full time private practice. I am in a private practice and I like being my own boss, and my entire staff of just me means I can only blame myself for things I don't get done, and I do not have to fix other people's mistakes.

I agree. I'm currently 1 day of private practice and I love the more narrow spectrum of responsibility and more relaxed atmosphere. I know clients can be intense, but back to back to back of watching the 'system' destroy kids and dealing with waaaay too many personality disordered parents is just too much.

I would look into a solo401k since it will allow you to put a higher amount away pretax for the same income as employer and employee. I set mine up through Fidelity because they allow other retirement accounts to be rolled in and have lower fee funds that Vanguard for solo401k.

Thanks for the Fidelity vs. Vanguard tip on the solo401k. I could adjust by having more of my check go into a 403b to offset tax liability...would that serve the same purpose as reducing taxable income or it needs to come from the private practice proceeds?

I have no idea of at what point to incorporate. I have not done so. The income amount my accountant said would possibly make a tax difference was high enough that I would be maxing my SEP or solo401k. I was told it does not make a legal difference in protecting from a lawsuit.

I have heard the same re: lawsuit. My current CPA said it is purely a way to get around / reduce the 15% self-employment tax. I have no idea how that works. I'll be asking my new CPA (which we haven't chosen yet).

An accountant will tell you what you need for private practice such as a business license, tax ID number, paying estimated taxes, whether you have to pay gross receipts tax etc etc. See what they tell you. I only use my accountant to do my tax return. But she provides estimated tax forms I file myself 4 times a year. I do my own gross receipts/sales tax. It may or may not be due in your state. Your accountant will set things up so you are paying into social security. There was something about it being different if a spouse is paying into social security. The accountant will have to explain it. My spouse has a W2 job and it effected how she calculates the taxes I owe.

As a STRS employee, we don't pay into Social Security. However, my wife does as a member of calPERS. We'll have to ask the accountant how that works. I'm pretty detailed bookeeper (YNAB for business budget; excel spreadsheet for income), so I feel confident I can keep track of that side of the business.

I would call several ? many other private practice folks and go see their offices and see how they have things set up and have them explain how they do things. Ask about any tips and their experiences with insurance and any other unexpected complications of private practice. Ask about the business details. Maybe there is a peer support group who meet and discuss cases and practice issues?

I have interviewed 3 very successful practitioners, including one husband and wife team. Husband and wife team were adamant that, being a male willing to work with teens, I should never agree to accept insurance and I should charge the top of the scale for our town (the same they charge). The other practitioner that takes insurance and is a good therapist, but disorganized and not a good bookkeeper also said the same, but not as emphatically. I like the peer support group idea. Maybe a combination clinical consult group and business discussions. I actually had one friend of mine that has since moved to 100% consultant work tell me that I could make a living helping therapists organize their private practices, track their $,
etc., since so many of them are terrible at it. Not on the table, for now, but interesting...


? EMR or no. Talk to other private practice folks. What do they use for records, appointment reminders, receipts, how do they keep track of expenses, income etc. (I have a separate bank account just for work and put all work income there and pull expenses from there).

I currently have a separate account for private practice (and another for our rental. I have a separate budget in YNAB and a spreadsheet for income. Appointments I use an electronic calendar (my handwriting is horrid). I currently text clients their appointment reminders,
which is manageable with only about 5-6/week, but more difficult as things would get bigger.


You will need to check on malpractice insurance and office insurance. KISS in regards to office space and supplies. You can always expand and get nicer things if you get busier. My first office was mostly donated furniture and I kept my start up costs under 10k which included the rent deposit etc. Can you sublease office space? Join others ?

I've always carried malpractice insurance, but will need to expand it to include seeing more clients/week as well as cover the office.
My wife and I have a moderate umbrella liability policy that covers our rental, but not sure if it also covers any aspects of my private business (my guess is just slip and falls). I'll check on that.

I currently rent by the hour and am working with a colleague to get our own place. I will have 2 days/week and she'll have 3. I'll end up paying the same amount per month for 2 full days vs. hourly. It's a month-to-month lease. My colleague and I are committed to keeping startup costs down while still having it look nice. I once rented an office that looked like a homeless encampment and I just couldn't in good conscience charge top dollar with those accoutrements. I think we'll find a happy medium.


I also started one day a week. I sent notice to all referral sources I could think of and it has built up from there with no advertising.

I live in medium-sized town (about 90k) and have been working for the local school district and university for almost 20 years. I have some pretty good connections and multiple people telling me to make the leap, so that's good. I just reached my client capacity for part-time work yesterday, so that's good.

Are you going to take insurance? My rec is don't do it. You will spend too much time billing insurance, tracking down payments, and it complicates your accounting system. Fee for service and being paid at the time of the visit keeps it simple. Yes some folks won't schedule. But it gives you more time to do what you do, and that is not billing insurance...................or keeping track of a billing person handling it.

I agree no insurance. It's just too much of a headache and too many people telling me not to do it.

Yes my answer is put away as much as you can, after meeting living expenses. With a solo401k you can make contributions of different sizes through the year. As long as the account is set up before the end of the year, you have until your tax deadline to fund. So you do not have to pick a % of income early, or even pick a %at all, you can simply send in as much as you can "afford" after bills are paid etc. Be sure it is no more than a %of income your accountant explains to you so you don't overfund.

thanks for this^^ Of note, there are two future opportunities for increasing my pension. one is that a colleague will be retiring in a few years and he/she holds a job that everybody wants me to do; I'd be creating mental health service for all special education students and would be an opportunity to do things right. It would probably be a 5 year committment to do it right, but could leave after. At this point, who knows, but it's out there.

the other would be to re-enter the system the last couple of working years in some capacity to re-set my highest salary which would drastically increase my pension. I know enough people that I could probably make that happen.


I would keep the disability insurance for now. I never did pay for private disability insurance. It just seemed too expensive.............I have paid into social security enough years that it is my disability plan. Well, my real plan is to not become disabled..............

The reality is that if I became seriously disabled, there is enough family support and $ to step in. I will be checking the policy for details about what happens when I go part time. Also, when my wife gets her LCSW, our income will go up again which means saving more. We currently only have 3 months expenses in cash since we both had/have jobs where we'd have to murder somebody to lose them. Private practice means that has to change

My husband is currently contemplating a job change. Financially it is scary. He is at the point he wants to stop the old and take a break before finding a new one. So that "human" factor has been on my mind a lot. The recent Las Vegas incident, plus all of the hardship of recent national disasters and seeing people lose everything including loved ones etc helps me put things in perspective. Will we have to budget more carefully............of course. But since we are not at risk of being homeless by far, we will find a way to make it work on one salary til he is able to find a job he likes better. I feel very privileged to have this option. But I am also anticipating I will be under more stress as the sole provider in upcoming months.

It sounds like we are in similar overall positions of privilege and I also agree focusing on being grateful for my position is helpful. Perspective, for sure...

An issue with private practice is that it is NOT salary. Month to month income can vary greatly. But over time you will figure out how steady or unsteady the income is.

As long as you can cover living expenses, I think it is ok to make a change. I started my private practice one day a week. I think that easing into it so there is more clarity on income potential makes the most sense. Don't let go of the security of the paycheck til the self employment income is more clear. Especially with so little emergency funds.

Is your rental cash flow positive ? It seems you have some equity there.

The rental does OK. I've consulted with an uncle who is retired from a lucrative career in real estate. The property only makes about 4 or 5% after expenses (% of equity), but it will always, always, always be rented (location). He advised sticking with that security until I make a decision on the private practice thing. Then, if my wife also wants to get into private practice, he advised an exchange into a commercial property where we can have space and rent out the rest. So, stay the course for now until we make some decisions.

Thank you so much for your detailed "I've been there" feedback. It is sincerely appreciated and quite helpful.

matt


Best wishes,
lafder

kiva22
Posts: 71
Joined: Sat Jul 30, 2016 2:56 am

Re: Transitioning from Pension job to private practice

Post by kiva22 » Wed Oct 04, 2017 10:45 pm

catdude wrote:
Wed Oct 04, 2017 3:05 am
OP, here's a website that you may find useful --

http://www.pensiontsunami.com

It's updated daily with links to media articles, blog posts, etc. The primary focus of the site is the ongoing pension crisis in California (CalPERS, CalSTRS, various municipalities, etc.); but other states are covered as well (I often alert the website owner when I see pension-related articles in the Oregon media). I suggest you bookmark this site and check it out often -- it'll help you keep up with pension news.
thank you. I remember seeing that when doing some forum searches. He feels a bit like a libertarian with an axe to grind, but I have huge respect for principled people of any political persuasion and also feel he's got a ton of good info there. Thanks for the reminder. I'm putting it in my 'finance' bookmarks folder.

kiva22
Posts: 71
Joined: Sat Jul 30, 2016 2:56 am

Re: Transitioning from Pension job to private practice

Post by kiva22 » Wed Oct 04, 2017 10:47 pm

[/quote]

I am not an American nor US based, so you have to take this all with that extreme caveat.

Re 1 - save as much as you can consistent with an acceptable lifestyle. You don't know what life will throw up and savings is the one way that you can protect yourself and your family in the future (if for example you were not around)

Re 3 - I should tell a psychologist this (adopts best Brooklyn accent)! You regret in life what you didn't do, not what you did do-- in the long run. So of course you should give it a try. Crunch point is when you make it permanent.

Re 4 - Yes you should keep the disability *if* you would still be eligible to collect (you need to read the exclusion clauses carefully!). Also normally they replace a percentage of income *based on your most recent income* so if your income drops (for a while) you might have lower protection. I would still keep it though-- most workers, and especially the self employed, are badly underprotected against disability (which impacts something like 1/4 before age 65?)
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Thank you for this. I enjoyed the reminders to makes sure and do what we want / one life. That was a conversation with my wife on the porch during sunset. "if I don't at least try it, I'll always regret not doing it. That and if I don't change something in my current job, i'm going to continue to be miserable. " Perfect Storm!

I'll be checking into the disability details.

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