Investments without large fees

Investing is not one of our best endeavors and many just don’t take the time to learn. With only a few minutes left in the year, here is some information you might not want to miss.  

I was just listening to the ChooseFI podcast and found out a few things to pass along.  First, I recommend listening to them as you journey through life whether you are planning to retire early or not.  

HSAs or Health Savings accounts for any high deductible insurance plan that is define as 1350 for an individual or 2700 for a family.   You can put away 3450 individual or 6900 for a family in an HSA TAX FREE.   Any medical expenses can be taken out TAX FREE at any time / any year!  This of course means you have to keep your receipts for your accountant for years.  After age 65, it acts like a traditional IRA or can be used for medical expenses later in life.  If your plan started dec 1 you could find the entire amount.  Fidelity now has a zero fee HSA management account (funds or investments places in the account may have some fees).  

This is way different than an FSA as those funds don’t fully roll-over year to year.   these funds are for your yearly medical expenses and are typically use or lose.

We are typically interested in low fees and trying to keep our income in our pockets.  Mutual fund investments are just about the most common across the nation and ChooseFI often touts the Vanguard total stock index fund or VTSAX which had a hefty $10k minimum which has now changed to a $3k minimum for getting started.  This opens the fund up to those who are wanting to get started investing at one of the lowest fee mutual funds on the market at an annual fee of just 0.04%! 

Some of you may know these things but the mutual fund information is pretty new.  If you are thinking of setting up the Solo401k it has to be done and funded by the end of the year and if you are looking at a sep IRA it must be done and funded by April 15.   

It’s time to get your investment on! 

Flexibility with Travel, Work, & Vacations

The flexibility & vacation time in working locums drew me in and kept me as a locum nurse Anesthetist.  

Work flexibility with a few facilities around the country has allowed the opportunities to do more with my time. 

Recently, my family visited Costa Rica and extended family!  I was able to speak and although I was a little excited, nervous, & even got a little lost in speaking; it was great to see other CRNAs and have them meet the family.   

We moved to Virginia for surrogacy and failed our first attempts.  It was a true and sad failure but due to locums I’ve been able to pay down the debt that occurred for this attempt.   

We’re paying down our debt load and continued to build the real estate venture over the past 6 months.  It’s been amazing to follow a move and family changes over the past 6 months.  I’ve been able to build on relationships and although working a lot... we are still well on our way to continued financial success in our lives.  Although, I know it’s possible to do this in one location with one job, it’s getting done on a condensed schedule.   

Life, flexibility and continue strong work ethic are leading to change as I continue all the things that are important in our family life.   

Finally, school is just about to finish the first 10 week term toward the MBA.  Nothing game-changing but working on a business mindset continues to be a fun opportunity for change despite my whining and complaining :).   

Totally looking forward to the coming weeks and months!  More to come. 

The busy locum

Another busy week looms in the balance on this Sunday evening.  I am well on my way to paying down the bills as we spoke on in weeks passed.  My Sep IRA through e-trade was set-up and funded.  I’ve traded in the truck for a small SUV that now is less than half the payment and has a better APR with half the balance I was paying.  I’ve also paid off 20k in credit cards.  I still have a long way to go and am paying my dear old Uncle Sam dearly with every paycheck so I can get in the good graces.

Today, I worked at the hospital ... from pediatric code to sepsis and multiple cases in-between it’s been a crazy day.  I was able to get back to my hotel in time to spend some time on homework.  My math class work for the week is complete and now it’s on to business analysis with its’ primary focus being communication this week.  The MBA program is challenging my time management and my brain in ways that I haven’t managed in a while.   

This week is a 60+ hour week and call for the entire next weekend.  I keep my focus on the benefits I see in the long-term as right now I sacrifice time with the family to get us ahead. We are seeking some freedom from the absolute need to work for thought of if things went sideways “what would I do if...” scenarios.   

I’d say in just a few weeks I’ve learned a good amount on every level and look forward to the coming weeks in engaging with colleagues, growing businesses, learning in the structured university education, and then managing life around the critical elements.  

This weekend I spent time on the farm with my favorite veterinarians and did c-sections for sheep.  What an amazing opportunity and so glad I spent a little time with family.   

What an amazing life we lead.  Now it’s off to laundry.  Feel free to e-mail me anytime locumCRNAs@gmail.com

Work a little more

I seem to be one that says... “OK, I’ll just work a little more...”. I think it’s fine to say that once in a while for a one time expense but I have learned that saying that on long term expenses... stinks.  I honestly think I’ve thought about this and am much more attuned to.  It always seems there is something that happens just about the time that you make a little extra.  The dog has a vet visit, a crown is needed at the dentist, or a plumber is needed.  So, FI movement says pay off things rapidly and get 6 months or more in savings etc... I get it, I have to work on this and I know it’s do-able!  This is the first weeks of my 6 month run on this.  I get a paycheck next week and that already has it’s assignment.  But I’m assigning 3/4 of it and leaving 1/4 in the bank account for safety.  I know most emergencies can go on a credit card but I have a tendency to fear over-drawing an account ... it happened once 20 years ago!  Mom would tell me to get a checkbook register and write it all down.  Many people recommend writing down every single expense but I have yet to do this while on the road.  

This week I’m home and I want to go through and make sure I’m not stuck in subscriptions or reoccurring payments for apps or things I don’t need or worse just don’t use.   

I’m so exciting to be sitting in the airport and heading home for the week.  Many people tell me it’s about being home and taking the time to be present.  I totally agree and know that in the coming 6 months I’ll be going against that somewhat but those 6 months will make possible time to be home with the family more often and more in tune with all.  I’m feeling so excited to just be working toward a little freedom from payments ... not to mention the anticipation of the road of financial independence.  I hope all know I appreciate the comments... despite my reluctance to get rid of everything in a fire sale ;).  Have an amazing weekend and I’ll write more while at Mid-year Assembly! 

Is it difficult to set-up a sep-IRA?

I have been a CRNA for quite some time, as you might be aware.  I have tended to keep my earnings and retirement away from the stock market.  As many would chastise me for not taking advantage of tax sheltering, and even I wish I were a better saver.  

I have always invested in real estate.  For a while it was my own home.  Then it was the start of rental property in Kansas.  I am still invested in Kansas and started on my current home in Virginia.  

I have avoided the stock market though.  I have used an E-Trade account as if it were a casino.  I haven’t been an investor but a speculator.  I have invested over the years in the military Thrift Savings Plan ... 1% for 9 years... you know how little that is.  I forget to take time to learn about those things.  I know I need to shelter my taxable income so I am actually doing this.  

I went for weeks totge website for Vanguard but then they said they couldn’t verify me.  Then I had to fax things for the Solo 401K but... I missed 2017.  So, I decided I would do a simple Sep-IRA if I could.   

I was checking my E*TRADE to make sure my Roth IRA transaction went through and then I had an epiphany.  Why not try to set up just an IRA.  I saw the set-up a retirement account button and so I clicked on it.  Bam, Sep-IRA option right there.  Two minutes later i had $6k coming out of my account to fund a Sep-IRA for 2017.  I have until my taxes are filed toget those dollars cought up. I would prefer a Solo-401k but I didn’t get it set-up in 2017 which means no $$$ can beplaced in it for 2017.  So, i now have a sep and I’m working on saving a tax bracket or two by saving more pre-tax dollars toward retirement as my rentals are post tax.

Is it possible to invest in retirement with real estate?  Yes, but have I done this... no.   

Every year, I will try to be more active in my tax planning and save betterfor my family and child or children (someday).   

Write off or included in your contract?

Here are a few things I didn’t think about when negotiating my next two weeks.  

1.  How am I getting to the airport?  I typically drive to every assignment so when it came to the airport I didn’t think about ... Will I Uber there?  Do I leave my car in airport parking?  Do I assume my husband will take me?  Ok the later is typically true but, now he is sick and didn’t want to take me.  I have$7 in tolls just to get that trip to the airport.  

2.  When I get the rental car in Massachusetts will they pay the tolls to and from the airport?  It’s not in my contract per say.   

3. I have clothes for a week but they don’t have baggage as an expense for taking the flight so now I don’t have enough to wear for two weeks without doing laundry.  Has anyone been reimbursed for laundry?  I also can’t take fluids or razors so no toothpaste, shaving cream, razor.... that stuff can be expensive right?  

4.  It’s a travel day before my assignment starts ... a day with no family and a day that i can’t work.  Non-productive and a loss of income.  Does anyone get paid a travel day on either end?  Usually if I drive ... I at least get travel expenses.   

These are a few things we might look at for future travel contracts.  does everyone consider these written off expenses or do you get them paid out so you get to save the expense in the first place?

How to Save for Retirement as a Freelancer

By Jeremy L. Stanley, CFP®, AIF®

According to a 2009 study, around 14% of CRNAs worked as freelancers or independent contractors. However, there’s no doubt that number has increased in the last few years as freelancing across numerous industries is on the rise. In fact, according to UpWork, 55 million Americans work as freelancers.

If you’re currently freelancing as a CRNA or would like to make the transition, you likely know of the perks: flexible hours, an independent schedule, the opportunity to travel, and more. However, with the upsides come a few downsides—namely, a lack of access to a company-sponsored retirement account. Luckily, this doesn’t mean you can’t strategically save for retirement. Here are a few ways you can get started.

Break Down Your Paycheck into “Now” and “Later” Accounts

A common mistake freelancers make is neglecting to maintain a sufficient cash flow. Divvy up every paycheck into a few different accounts. For example, you may devote 40% to current expenses, 20% to an emergency fund, 25% to retirement savings (and don’t forget to reserve 15% for taxes).

Choose Retirement Accounts That Make Sense for You

Next, you’ll want to decide where you’ll devote that 25% to retirement savings. Let’s look at a few options freelancers have.

Solo 401(k) or Uni-K

If you’ve established a business, you can open a solo 401(k) or uni(k) plan, which acts like a traditional employer sponsored 401(k). As of 2017, you can save up to $18,000 per year as an employee (or $24,000 if you’re over the age of 50). Your employer, can also contribute up to 25% of your salary on your behalf (up to a total combined contribution of $54,000 or $60,000 if over age 50).

A 401(k) is a great option for CRNAs because, as high income earners, using pre-tax dollars for retirement can put you in a greater position to build and keep more of your wealth. Some 401(k) plans also offer a Roth 401(k) provision. The main difference is that you fund a Roth 401(k) with after-tax dollars instead of pre-tax dollars. One of the biggest benefits of a Roth 401(k) is that you can contribute to a retirement account that provides future qualified tax-free withdrawals regardless of your adjusted gross income. As there aren’t income limitations on Roth 401(k) contributions, they may provide a good option for high income earners like CRNAs who may not qualify for a Roth IRA but would like to generate a tax-free retirement income.

IRAs

Individual retirement plans are another option for freelance CRNAs to use along with their 401(k). Three popular options are the Traditional, Roth, and SEP IRA.

Traditional IRA

A Traditional IRA is similar to a 401(k) in that you can contribute pre-tax dollars to an investment account that grows tax-deferred. For 2017, you can contribute up to $5,500 annually, or if you’re over age 50, a total of $6,500. However, if you’re married and filing jointly with a combined income of $196,000 or higher, you won’t be eligible for a Traditional IRA.

Roth IRA

With a Roth IRA, your contributions are not tax-deductible, like Traditional IRAs and 401(k)s. However, your earnings grow tax-deferred and your qualified withdrawals are tax-exempt (subject to IRS guidelines). Like a Traditional IRA, you can contribute up to $5,500 annually, or if you’re over age 50, a total of $6,500. However, like a Traditional IRA, there are income restrictions for Roth contributions, and many CRNAs won’t be eligible, but if you’re new in your career, you may be able take advantage of a Roth IRA.

If your income surpasses the cutoff amount for a Roth IRA, you may have another option; a backdoor Roth. Consult your Financial Advisor to see if you qualify to contribute to a backdoor Roth.

SEP IRA

A SEP IRA, also known as a Simplified Employee Pension, is a pre-tax IRA similar to a Traditional IRA. As an employer (of yourself), you can make contributions on your own behalf for your retirement. You can set up a SEP IRA and can contribute up to 25% of your self-employment income or $54,000 per year (whichever is the lesser amount). A SEP IRA may be a good option for freelance CRNAs who have a retirement plan they’re already maxing out at work, as this gives them another opportunity to save more for retirement.

Save Aggressively Where and When You Can

Any financial advisor will tell you how important it is to start saving as early you can and as aggressively you can. Channel any bonuses or raises directly to savings. Automate your savings increases of 1% every month or so.

A Few Other Options

There are a few other ways you can maximize your savings for retirement. For one, consider investing for growth, as opposed to what you think you should be investing based on your age. You may want to retire in 10 years, but you don’t need to set a 10-year horizon for your investments because you’ll only need a small portion of your nest egg in the early years. The rest of your money may stay invested for another 20 to 40 years. Invest with an appropriate perspective so you don’t end up cheating yourself out of years (or even decades) of growth.

Additionally, you may consider giving yourself more time to save by pushing out your retirement date. Every additional year that you work is one less year that you will be depending on savings and draining your nest egg.

And lastly, don’t forget to take advantage of tax deductions that are available for the self-employed. Knowing what write-offs you can claim may help you save more on your taxes, which you can then funnel into your retirement savings.

Next Steps to Take

There are a number of options for boosting your retirement savings as a freelance CRNA, but the rules and specifics of each option can be complex and overwhelming. If you encounter questions as you investigate some of these retirement savings options, don’t hesitate to reach out to us. We’d be happy to help you review your options or offer guidance. You can call our office at 855.304.3748 or email inquiry@crnafinancialplanning.com.

About Jeremy Stanley

Jeremy Stanley is the founder of CRNA Financial Planning® as well as CRNA Tax Associates®. He has been providing advice and guidance for Certified Registered Nurse Anesthetists (CRNAs) for over two decades. As a CERTIFIED FINANCIAL PLANNER™, Jeremy has met rigorous certification and professional standards set by the CFP® Board. He is committed to adhering to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.

Jeremy is also the author of The Wealthy CRNA and A CRNA’s Life After Anesthesia. The Wealthy CRNA features insights into becoming a financially successful CRNA and how to start planning for your financial future, and has been prior approved for up to 4 Class A CE credits by the AANA. A CRNA’s Life After Anesthesia serves as your financial roadmap for a smooth emergence into retirement. It reviews recent changes in the CRNA industry along with the new rules of retirement and the final steps of legacy planning. This book has been prior approved by the AANA for up to 2 Class A CE credits.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.