Last year, I made a lengthy video and post Facebook Live Episode 3: $73,500 into U Texas Retirement Accounts discussing the U Texas Retirement accounts using 2018 limits.

Please start there and review that video and post first!

For 2019, the limits have changed

• IRA: $6,000
• 401k: $19,000 (employee deferral)
• 457b: $19,000(employee deferral)
• 403b: $19,000 (employee deferral)
• 403b: $56,000 (employer + employee combined; includes ORP & TSA)
• Catch-up contribution amounts are not different ($1000 for IRA and $6000 for 401k, 403b, and 457b).

ORP contribution amount is based on $280,000 maximum in 2019 (was $275,000 in 2018).

Here are 4 examples of maxing out the U Texas Retirement accounts with the ORP (Optional Retirement Program)

Example 1: 40-year-old physician earning $200,000

IRA: $6,000
DCP 457b employee: $19,000
ORP 403b employee: $200,000 x 6.65% = $13,300
ORP 403b employer: $200,000 x 8.50% = $17,000
TSA 403b employee: $56,000 – $13,300 – $17,000 = $25,700 but capped at $19,000 for people age <50; so maximum contribution is $19,000

Total Retirement Contributions:
      $6,000 IRA
+  $19,000 457b
+ $13,300 ORP
+ $17,000 ORP 
+ $19,000 TSA
$74,300 

Total Compensation
$200,000
+ $17,000 ORP employer contribution
$217,000

Gross Savings Rate = $74,300 /  $217,000 = 34.2%

Example 2: 50-year-old physician earning $200,000

IRA: $6,000 + $1,000 = $7,000
DCP 457b employee: $19,000 + $6000 = $25,000
ORP 403b employee: $200,000 x 6.65% = $13,300
ORP 403b employer: $200,000 x 8.50% = $17,000
TSA 403b employee: $56,000 + $6,000 – $13,300 – $17,000 = $31,700, but capped at $25,000 for people age 50+; so maximum contribution is $25,000

Total Retirement Contributions:
$7,000 + $25,000 + $13,300 + $17,000 + $25,000 = $86,300

Gross Savings Rate = $87,300 / $217,000 = 40.2%

Example 3: 40-year-old physician earning $300,000

IRA: $6,000
DCP 457b employee: $19,000
ORP 403b employee: $280,000 x 6.65% = $18,620
ORP 403b employer: $280,000 x 8.50% = $23,800
TSA 403b employee: $56,000 – $18,620 – $23,800 = $13,580
($13,580 < $19,000, so $13,580 is okay)

Total Retirement Contributions:
$6,000 + $19,000 + $18,620 + $23,800 + $13,580 = $81,000

Total Compensation = $300,000 + $23,800  =  $323,800

Gross Savings Rate = $81,000 / $323,800 = 25.0%

Example 4: 50-year-old physician earning $300,000

IRA: $6,000 + $1,000 = $7,000
DCP 457b employee: $19,000 + $6000 = $25,000
ORP 403b employee: $280,000 x 6.65% = $18,620
ORP 403b employer: $280,000 x 8.50% = $23,800
TSA 403b employee: $56,000 + $6,000 – $18,620 – $23,800 = $19,580
($19,580 < $25,000, so $13,580 is okay)

Total Retirement Contributions: $94,000

Gross Savings Rate = $94,000 / $323,800 = 29.0%