No matter what line of medical practice you are in, the question of retirement must come up at some point. Most physicians consider themselves too busy with work to even think about it but the truth is the end of your career is a matter of “when” not “if”. It is best to prepare for retirement as early as you possibly can – leaving it alone only to start planning towards the end of your career is already much too late and will likely result in less savings and financial security, practically short changing yourself after a lifelong “job well done”. Following are five keys to successful retirement planning for doctors that will help you build a retirement lifestyle that is free of worry if you start working on them “stat”.
- Financial Advisors Will Help – Retirement planning is not a simple process. There are a myriad of topics to cover and even the most agile-minded people may find it difficult to digest. It is a good thing that there are professional financial advisors that specialize in medical retirement planning. If you are interested in speaking with such an advisor (if you care at all about your future, you would be), the American Medical Association (AMA) Insurance website is a good place to start looking. If you cannot find a suitable option there, then another method of finding a trustworthy advisor would be to seek recommendations from your co-workers and colleagues at work. Having somebody by your side that knows the “ins and outs” of physician retirement will be extremely useful and it will help you create a solid foundation for the future.
- Make Use of 401(K) Plans – 401(k) plans are basically employer-assisted retirement plans that allow physicians to divert some of their untaxed income towards a fund that will be used to invest in stocks, bonds, and other vehicles that will help grow the fund over time. The earlier you get in on a 401(k) plan, the better because theoretically you will be able to maximize the amount of time and money you must let the investment grow. Once invested in a 401(k), it is in your best interest not to withdraw from it until you are 60 years old – if you are able to do that, then there would likely be quite a significant chunk of money there for you to collect because of many years of investing and earning on interest. For employees of the government and non-profit organizations, there are similar plans that work the same way as a 401(k), and they are known as 403(b) or 457(b) and are just as useful. Make use of these options as soon as you can!
- Save 20% of Your Income – Another way to build up a retirement fund is to take 20% of your earnings and invest them directly into your choice of stocks, bonds, and any other vehicles you might find to be profitable. This is similar to utilizing 401(k) plans, except these investments are not sponsored by your employer. In other words, they are born out of your own initiative. A good way to do this would be to discuss with a trusted financial advisor and go through any recommended investments he might have, and if you decide to pull the trigger, allow the advisor to help you out (just make sure he is trustworthy first).
- Go Locum Tenens – If you are close to retirement age but still feel like taking on work then you might want to consider doing locum tenens work, which is just a fancy term for working on a temporary or substitute basis. This can be done on both a part time or full-time basis and allows you the flexibility of choosing when and where to work as you draw your career in healthcare to a close. This is a popular option with many retiring doctors because apart from allowing you to exert control over your practice, it also provides you with additional income to help you with your day-to-day expenses.
- Invest in Downline Continuity – Self-employed doctors have the option of investing in “downline continuity” or, in other words, delegating tasks to an offshore team while freeing up time for their own daily lives. Why wait until retirement to benefit from extra time spent with family or pursuing personal interests outside of medical practice? You can make time today by taking advantage of cost-efficient remote staffing to lessen the time you spend on paperwork. Apart from saving yourself from hours of bumbling through burdensome tasks, it will also provide your practice with a crew that can accomplish healthcare related functions so that you have the option to keep earning well after retirement.
TukkoMed is a good place for physicians to get key advice for all things relevant to the medical industry – and if you are practicing in the Golden State and are providing qualified medical evaluation services for California’s Workers’ Compensation system then you are at the right place. Send us a message and find out how we can help you with your HIPAA-compliant reporting needs.