No matter where you are in your career, it is never too early to begin planning for your eventual retirement from practice. Unfortunately, most doctors wait until they are close to retiring before even thinking about it – and when the time comes to actually retire, many would have missed many opportunities to prepare themselves for the transition as they were too busy neglecting the issue. This usually happens because physicians are either too busy working to consider retirement or simply have just never thought about it because they perceive it to be too distant in the future to worry about. But for those who want to make the most of their future beyond medicine, following are five strategies that can set the foundation for a fulfilling post-career life.
- One More Year – There is some wisdom in deciding to go “one more year” before retiring – mainly to do with gaining more annual retirement money before hanging it up for good. In fact, you could gain up to $12,000 dollars per year of retirement just by doing this. That’s a lot of extra cash that could go to leisurely activities such as travel, or it could also provide additional funds for investment.
- Locum Tenens – Another popular option for physicians that love their job is that they can go from full time work to part-time or “locum tenens” work upon retiring. This style of employment allows for doctors to live in a state of semi-retirement, choosing when and where to provide medical services on a temporary basis. In fact, there are doctors that make a living this way – travelling from one place to another, offering their services temporarily, before moving onto another place. While the money may not be as good as when you become a full-time partner at a medical practice, it still does pay quite well (usually better than what starting physicians make on average).
- Adjusting Investments – Investments are never a straight path to success, as things can get quite complicated depending on the investments that have been made. The usual idea is to invest in stocks early, while slowly transferring these investments into bonds and other safer investments as you near retirement. Furthermore, one should try to focus investments on 401K’s and IRA’s which are non-taxable, ensuring that the most is made of the earnings rather than having to pay government taxes needlessly.
- Social Security – Knowing exactly when to take up social security is a bit of an artform. There are those that simply go for it as early as possible, maximizing their investments and benefits. However, the longer one waits before going the social security route, the more the payments increase (to the tune of 8% per year!). The risk here is if a person dies suddenly without having invested in social security, then their families will not receive anything.
- Managing Retirement Funds Effectively – It is important to remember that one of the best ways to spend retirement money would be to keep withdrawal rates down to around 4% of a person’s annual retirement funds. This is a safe number to start with, but it will fluctuate depending on how life goes after retirement. Of course, everyone is free to withdraw less or more based on their needs, but the tradeoff is that the more one withdraws from their fund, the less they will earn through their various investments.
TukkoMed has helped many physicians over the years by allowing client-partners to delegate troublesome workloads to our staff and aligning interested doctors with careers in Qualified Medical Evaluation for the California Workers’ Compensation industry. Get in touch today so we can fill you in on what we can do for you today!