loan repayment – WisMed Assure

Last-Minute Money Moves for 2024 Taxes

March 10, 2025March 13, 2025

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

As the April 15 tax deadline approaches, physicians still have opportunities to adjust and improve their 2024 tax returns.

Contribute to a Health Savings Account

If you have a high-deductible health plan (HDHP), you may be eligible to contribute to a Health Savings Account (HSA). For 2024, the contribution limits are $4,150 for individuals and $8,300 for families. Contributions can be made until the tax filing deadline. Just remember to reduce your contribution by the amount your employer contributed. HSA contributions are tax-deductible, growth is tax deferred, and withdrawals used for qualified medical expenses are tax-free. This triple tax advantage makes HSAs a powerful tool for health care costs and reducing your tax burden. As a bonus, after age 65 you can use the HSA penalty free for non-health care spending too; you’ll just pay income tax on the withdrawals.

Max Out Your IRA Contributions

The IRS allows you to make contributions to your Individual Retirement Account (IRA) for the 2024 tax year until the filing deadline (April 15, 2025). If you haven’t hit the maximum contribution limits yet ($7,000 for those under 50 and $8,000 for those 50 and older or your earned income if less), this is a great way to reduce your taxable income while boosting your retirement savings. However, most physicians with access to employer retirement plans will find they cannot deduct the IRA contribution if their modified adjusted gross income (MAGI) exceeds $77,000 single or $123,000 married filing joint. If that’s your case, use the next strategy: the backdoor Roth IRA instead.

Backdoor Roth IRA Contributions

For higher-income earners, consider one of the most beneficial tax strategies: the backdoor Roth contribution. You can contribute to a traditional IRA by April 15 for 2024 (whether deductible or not) and then convert those funds to a Roth IRA. This move allows you to get money into a Roth IRA where your earnings will grow tax-free in the future. See the full Backdoor Roth IRA article for more.

Self-Employed Income? Max Your Retirement Contributions

If you’re self-employed or have 1099 income, you still have time to contribute to a SEP IRA or individual 401(k) for 2024. These plans allow for higher contribution limits compared to other retirement plans, and contributions are tax-deductible. You can contribute up to 25% of your income or $66,000 (whichever is less) into either plan, and the deadline to set up and contribute is the same as your tax filing deadline, including any extensions.

Contribute to a Wisconsin Edvest 529 Plan

Wisconsin taxpayers can deduct Edvest contributions up to $5,000 per beneficiary from their state income tax return. If you make the contribution for 2024 by April 15, 2025, be sure to request that Edvest code for last year. Tip! The tax deduction is per beneficiary and the beneficiary can be anyone in the family. Savvy savers open multiple accounts and name each member of the family as a beneficiary, including parents, to maximize the tax deduction. When the child is ready for college, simply change the beneficiary.

These last-minute moves, before filing your 2024 tax return, can help you reduce your tax bill and position yourself for financial success in the coming year. For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Note: This article is for informational purposes only and should not be considered as financial or tax advice. Please consult with a qualified financial advisor or tax professional before making any financial decisions. Full disclosures.

PAYE & ICR Plans Reopening for Student Loan Borrowers

December 16, 2024December 18, 2024

By Mark Ziety, CFP®, AIF®, Financial Advisor, WisMed Financial

The Pay As You Earn (PAYE) and Income Contingent Repayment (ICR) plans will reopen in mid-December under an Interim Final Rule. For borrowers forced into forbearance under the Saving on a Valuable Education (SAVE) repayment plan, should you switch plans? Let’s find out.

Focusing on SAVE vs. PAYE only

ICR is typically only used by parent borrowers with Parent Plus loans or consolidated Parent Plus loans. Income Based Repayment (IBR) is also available for borrowers, but the payment amount and treatment of interest are equal to or substandard to PAYE and SAVE plans. Therefore, this article will focus on SAVE vs. PAYE.

Problems with SAVE

As of this writing, borrowers in the SAVE plan have been placed in forbearance with no interest, no payment, and no progress toward loan forgiveness. It’s anticipated this forbearance will last well into 2025.

Making progress toward loan forgiveness

There are two options currently.

Switch from SAVE to a different payment plan, like PAYE, with required payments and progress toward loan forgiveness.

Anticipate using the PSLF Buyback program later to complete the 120 payments needed for forgiveness (assuming this program can be used to buyback months for the current forbearance.)

Comparing SAVE vs PAYE

Payment: Monthly payment under SAVE is typically lower than PAYE. The exception is at high income levels. The PAYE payment rises with higher income, but it is capped at the 10-year standard payment. The SAVE payment rises with higher income uncapped.

Interest: For those with relatively low income compared to their debt, the SAVE plan is often better than PAYE. The SAVE plan prevents interest from accruing when the monthly payment does not cover the interest. In contrast, unpaid interest accrues under the PAYE plan until it accumulates to 10% of the loan amount.

Length of Repayment: Loan forgiveness for borrowers that don’t qualify for Public Service Loan Forgiveness (PSLF) takes 20 years under PAYE. Under SAVE, forgiveness takes 20 years for undergrad loans, 25 years for graduate loans, or 10 years if the original amount borrowed was $12,000 or less.

Should you switch?

Everyone needs to run their own calculation to see what makes sense for their situation. Many borrowers will benefit by sticking with the SAVE plan if they are working for a government or 501(c)3 non-profit organization, assuming the PSLF Buyback program can be used to gain credit for the current forbearance later. For those with high income and/or their employer doesn’t qualify them for PSLF, switching to PAYE might be worthwhile.

For personalized help eliminating debt, investing smart and securing retirement, please contact Mark Ziety, CFP®, AIF® 608.442.3750.

Mark Ziety, CFP®, AIF®

WisMed Financial, Inc. part of the Wisconsin Medical Society

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

Mark Ziety, CFP®, AIF®

Executive Director of WisMed Financial
Certified Financial Planner™ Professional

Reach out to me to learn more. You can contact me at mark.ziety@wismedfinancial.org or 608.442.3750.

Book an appointment with me!

2024 Volume 4

December 16, 2024December 17, 2024

Don’t Wait for Disability Protection: A True Story

By Tom Strangstalien, Insurance Advisor

When you’re in your twenties and thirties, you can feel invincible. Despite the extraordinary odds of a disability, you might think, “why not wait until later in my career when my income increases?” After all, disability insurance can be expensive and impact your budget. Avoid the mistake of taking your health for granted – as resident and fellow physicians, you witness this every single day. To put it simply, life happens!

PAYE & ICR Plans Reopening for Student Loan Borrowers

Pay As You Earn Repayment PAYE Plan paperwork

By Mark Ziety, CFP®, AIF®, Senior Advisor, WisMed Financial

Common Moonlighting Scenarios – What’s Covered by Your Malpractice Insurance?

By Jensen Peck, Business and Professional Insurance Executive

As the insurance agency for the Wisconsin Medical Society, we receive calls often from members and client physicians who are considering supplemental employment (side gigs) outside of their regular scope of practice. They are often told to “not to worry about” the liability because it’s either covered by the employer or “minimal exposure.” Fortunately, most physicians recognize this may not be true and it’s best to receive input from an insurance agency that specializes in health care liability. Let’s review a few of the more common scenarios and important questions that need to be answered to confirm potential malpractice exposures are covered.

Dental Benefits with Medicare Advantage

Dentist or dental hygienist in operation with patient.

By Martin Hurst, Insurance Service Representative

Medicare provides essential health care coverage for individuals over 65, but it does not cover routine dental services such as cleanings, exams, fillings, or dentures. For those in need of dental care, there are a couple options to enhance your Medicare coverage. You can consider Medicare Advantage plans that include dental benefits or opt for a standalone dental insurance plan.

Income-Driven Repayment Plans

September 9, 2020September 11, 2020

The ins, outs, upsides, and downsides you need to know

By Rufus Sweeney

Looking forward to residency also means looking forward to repaying your student loans.
Sounds like fun… doesn’t it?

OK, perhaps not a lot of fun, but unavoidable. So, to reduce your stress and feel good about your financial progress, you need to make the best choice. And, making the best choice for how to repay your student loans takes a little thinking.

Before we look at the different types of repayment plans here are two important things to remember:

It’s critical to start loan repayment while in residency rather than use deferment or forbearance. This will save you thousands.
In many cases, you can switch repayment plans if your financial situation changes. This relieves some of the uncertainty you may feel when making your initial choice.

Now, the basic premise of income-driven repayment (IDR) plans is simple; you repay your federal student loans based on your ability to pay.

Here are your choices:

Standard repayment plan
Graduated repayment plan
Extended repayment plan
Income-driven repayment plans (Yes, there’s more than one!)

Phew! Seems complicated… and it is, but here are some basic definitions to help you figure out how you can best navigate the loan repayment landscape.

Standard repayment plan: You pay off your loans in 10 years. Your monthly payments are fixed based on adding the amount you owe to the projected interest and dividing by 120. WARNING: If you do not choose another type of repayment plan, you will be automatically enrolled in this repayment plan

As a resident, because your monthly payments will most likely be more than you can afford, this is not the way to go.

Graduated repayment plan: These also run for 10 years, but monthly payments start out low and increase every two years. But, as with standard plans, even the lower monthly payments are still likely higher than you can afford on a resident’s salary.

Extended repayment plan: Now we’re looking at the long term. With this type of plan, you’re facing 25 years of fixed or graduated payments. This type of plan is good if you don’t qualify for an income-driven repayment plan. And, sorry to do this to you, but even thinking about this type of plan is a waste of time because, as a resident, you qualify for income-driven repayment plans.

Income-driven repayment plans: These plans peg the size of your monthly payment to your income.

The four types are:

Pay-As-You-Earn (PAYE)
Revised-Pay-As-You-Earn (REPAYE),
Income-Based Repayment (IBR)
Income-Contingent Repayment (ICR)

Generally speaking, these plans cap monthly payments at 10% of your discretionary income. (Very simply, your discretionary income is your income minus whatever the poverty line is for your family.)

Low income = low payments. Your payment size is recalculated every year after you file taxes. The good (great?) news is that after 20 to 25 years, what remains of your student loans is forgiven. (Next blog we’ll look at public service loan forgiveness; which are forgiven in only 10 years.)

As you have probably realized, IDR plans work well for residents who are trying to get by on a $60,000 salary and owe a lot of money (roughly $50,000 or more).

PAYE and REPAYE

PAYE differs from REPAYE in two significant ways.

First, to qualify for PAYE you have to prove you can’t afford to make the payments a standard 10-year repayment plan requires. REPAYE doesn’t ask for this proof… no matter what your salary, your payments will never be more than 10% of discretionary income.

Secondly, PAYE is limited to the repayment of William D. Ford Direct Loans received after Oct. 1, 2007 and funds disbursed on or after Oct. 1, 2011. These loans include Direct Loans, subsidized and unsubsidized, Graduate PLUS loans and Direct Consolidation Loans made after Oct. 1, 2011, unless they include Direct or FFEL loans made after Oct. 1, 2007. Phew!

REPAYE is available to people who borrowed from the Direct Loan program, except for parents who took out PLUS loans. You qualify for REPAYE no matter when you took out your loan and as long as you borrowed from the list of qualified William D. Ford Federal Direct Loan programs.

A major benefit of REPAYE is you remain eligible for the Public Service Loan Forgiveness program.

Payments on the REPAYE program are adjusted every year based on income and family size. If you file your taxes separately, PAYE won’t take your spouse’s income into account when calculating your payments. With REPAYE, your spouse’s income is taken into account.

The best part of these programs is that after 20 years of on-time loan payments, your debt is forgiven.

Income-Based Repayment (IBR)

Income-based repayment (IBR) is another income-driven repayment plan that caps monthly payments at 10 to 15% of discretionary income. This type of plan is an option if you don’t qualify for PAYE and don’t want to include your spouse’s income into your discretionary income. (That said, almost every resident qualifies for PAYE.)

Income-Contingent Repayment (ICR)

This type of repayment plan work well if you are paying back student loans your parents took out on your behalf. They also work well for parents themselves who need an affordable way to pay back the loans they took for you. If you aren’t paying back loans from your kids or loans from your parents, ICR is probably not the plan for you.

A final word on flexibility

You can switch from on repayment plan to another. For example, if you graduated recently, you could choose REPAYE to take advantage of the government interest subsidy. Then, if you’re lucky enough to marry someone with a high income, you could switch to PAYE to avoid having your spouse’s income included in your monthly payment calculations. And, sometime down the road, you may quit your income-driven plan altogether because you want to make larger payments.

If you need help managing your debt, one of your best resources is your financial aid officer. And, I highly recommend visiting the White Coat Investor website. It’s a great source for guidance on how to acquire and manage the “good” forms of debt.