Retirement Planning for Physician with High Income for Reassuring Returns
As per an article released on the FSMB (Federation of State Medical Boards), the average work age of an active physician is 52 years. Even though it is an estimated number, we may consider it so for retirement planning if one wants to lead a productive and financially stable retirement life too. The article also states that the physician community in the country gradually is showing a slow and inevitable shift from young to older.
The idea here to reckon with is that expert practicing physicians get older, and even if you are at the far-left of this aging curve as a young energetic doctor, still this article is relevant on securing your future. We are trying to discuss some unique elements every aging physician should consider for an easy and successful retirement.
The profession of physician
While viewed by an outside person, the professional of a medical practitioner seems to be highly lucrative and stable. With this in mind, many people believe that doctors need not have to worry about any financial planning, budgeting, loan repayment, or retirement planning. However, the reality is not that rosy and even a bit confusing that an ordinary person’s financial stability. Though earning a sizable sum, many doctors are still not able to max out on their personal retirement plans or save for future.
Why physicians find it difficult?
We can find many random reasons for why medical professionals fail to save enough for retirement. Few of the major ones are listed below.
- High student loans – As we know, it takes many year educations for someone to become a qualified physician, and this education is always costly. It is noted that doctors have the most substantial debt loads in terms of educational loan repayment when they start working. Most of the doctors spend a significant portion of their first earnings to get rid of it.
- The cost involved in setting up own practice – Doctors who try to set up their own clinics do have to spend a significant sum to establish it. Most of the times, this too adds on to their financial burdens over time. It is not just the set-up cost, but there is also running expense and need for re-investment from time to time for maintaining such a facility.
- Lifestyle overspending – Once they get big rewards after many painful years of internships and residency, medical professionals seem to turn to a comfortable lifestyle to maintain their prominent social status. Fancy cars, latest gadgets, and big houses everything adds to their spending so quickly.
However, if you fail to do proper retirement planning for physicians among all these, there is a high chance that one may be struggling towards the end of their professional well being. Here we will discuss a few ways to boost up retirement savings:
Smart ways to boost retirement savings
- Proper financial planning and budgeting – If you run a clinic or working as a consultant, do have an eye on the inflow and outflow of funds. Proper budgeting and fund allocation with the help of financial planner is advised with which you can undoubtedly dedicate a percentage of your revenue to be set aside for retirement funds.
- Focus on the long-term returns – You can try the stock and other high-risk investments to an extent. However, if you do not have enough time to keep a keen eye on the market, then the safest approach is to invest the money in long-term plans like retirement benefits as 401(k), self-directed IRA, and HAS.
- Exploring partnerships – As medical practitioner community is closely knit through various associations and organizations, one can try outreach out to similarly minded professionals to see if they are open to the idea of merging services and practices, which will help cut the expenses and save more.
- Automation of savings – It is typical thinking that extra spent is automatically cut off if it is not available. You can think of setting up a direct debit of a particular percentage of your savings to a retirement plan every month. You can also consider maximizing the monthly contributions to pension plan or IRA.
- Consult a financial advisor – It is an excellent idea for the busy doctors to get a personal financial advisor who understands your situations and find out the best possible course of action in terms of expenses, savings, and retirement planning. They can explore various options for you compare them against your financial goals and suggest you the best combinations.
Along with all these, there are many other significant financial considerations be made by physicians of various ages as insurance, estate planning, and exit planning on their practice. With such needs, it is always advisable to rely on a professional and reliable consultant who can assess and manage the risks, help plan your savings, retirement, unique investment options, and ensure lasting financial stability.
Author bio: Isabella Rossellini is a research fellow in developmental economics at a leading university and also writes on blogs about the latest avenues of investments to consider.