Author: Joel Schofer, MD, MBA, CPE
Throwback Thursday Classic Post – Invest in Your Taxable Account Thoughtfully
Here’s a tip on investing in your taxable account from one of my favorite blogs and authors, Jonathan Clements from Humble Dollar:
INVEST YOUR TAXABLE ACCOUNT THOUGHTFULLY. If you purchase the wrong investments in your taxable account, you may be reluctant to sell, because you’ll trigger capital gains taxes. A good choice: low-cost U.S. and international total stock market index funds, which should be tax-efficient—and which shouldn’t ever lag far behind the market averages.
For those of us in the military, investing in a taxable account comes into play in a few scenarios…
Scenario #1 – You and your spouse (if you have one) have filled your Thrift Savings Plan (TSP) and all other retirement accounts available including IRAs, yet you want to save more for retirement. In this case, you put the rest in a taxable account with the investment company of your choice (Vanguard, Fidelity, Schwab, etc.). This is what I do when all of my retirement accounts are full, and just like Jonathan mentions I invest purely in broad, low-cost index funds at Vanguard. The only taxable holdings I have are the Vanguard U.S. and international total stock market index funds.
Scenario #2 – You are saving for a financial goal that is not related to retirement, such as a downpayment on a home or for a new car. If you’re saving for college, you’d use a 529 plan, but for just about anything else you could use a taxable account. For example, I used to have my emergency money and extra spending money in a money market fund among my taxable accounts. The alternative to this is to use a bank and invest in a high-yield savings account (which is what I do now), a certificate of deposit (CD), or a money market account. Bankrate.com will show you the best rates for each of these reasonable alternatives.
If you are using a taxable account, there are a few things to consider. If you are investing in bonds, you may want to invest in municipal bonds in your taxable account due to the tax benefits. If you are a fan of target date funds, you may not want to use them in a taxable account because the bond portion will kick off income that is taxed at your full marginal tax rate. Most feel that bonds are better placed in a tax-advantaged retirement account unless you are using municipal bonds.
Guest Post – Military Physician Disability Insurance Enhancements
The only insurance company, Massachusetts Mutual, that will provide active duty military physicians and dentists individual specialty specific, non-cancellable, guaranteed renewable disability insurance coverage has announced some policy and underwriting enhancements to take effect at the end of April. Military physicians/dentists will be able to protect a larger amount of future income utilizing the Future Insurability Option (FIO) Rider. This Rider guarantees the ability to increase coverage in the future based on income regardless of health. This protects against adverse health changes being excluded from coverage. For policies with the Benefit increase Rider (BIR), instead of being limited to increasing coverage only every three years, “off anniversary” increases are allowed under certain circumstances. For example, when military service completes, or income increases significantly (30% or more).
The 24 month mental/nervous disorder maximum benefit period can be extended to age 65 or 67 for an additional 15% premium for all specialties except Anesthesiology, Pain Management and Emergency Medicine. These enhancements are available to new policies only. This is consistent with the discount for military physicians and dentists that Massachusetts Mutual announced last year and will remain in effect.
Disability insurance continues to be a foundational solution to protect military physicians, dentists, and their families by providing financial security not available elsewhere. One key factor to remember, the coverage CANNOT BE ESTABLISHED WHILE ON OVERSEAS DEPLOYMENT OR AFTER RECEIVING ORDERS TO DEPLOY OVERSEAS. For that reason, it is critical to contact us before you expect to receive orders.
*not available in California, District of Columbia, New York
Andy G Borgia CLU
D.K.Unger
Director, Clinical Support Services, Headquarters Marine Corps (Arlington, VA) – O5/O6
This position (PD attached) is a summer 2021 fill:
Anyone interested in applying needs to contact CAPT Garder (Senior Detailer) by COB 9 APR 2021.
Joel Schofer's Career Planning Blog 