The pandemic is taking a gruesome toll on medical professionals. According to a recent survey, more than 73% of physicians reported overworking, and more than 30% reported that they are looking for another career or are considering retiring early as a result.[i] Additionally, nearly one in five health care professionals have already lost their jobs since the pandemic began.[ii]
Even if you’re not at your wits end with your job, you want to be certain that you can leave if you want, and that you’ll be able to retire when the time comes. But you also likely have some other financial goal that you want to tick off the list before that, such as funding a college education for one or more children.
With no end to an emotionally and physically exhausting daily routine, you may not have a lot of free time to plan for your financial future, but that doesn’t mean you can’t find peace of mind. that comes from knowing you. Have enough money to retire — or reach many of your other important financial goals. The trick is to take it step by step.
don’t treat yourself
Becoming a good doctor requires specialized skills, which do not always translate into financial acumen. Just as you would probably never recommend that your patients perform medical procedures on their own, it may be wiser not to attempt to do your own financial planning, especially when you are short of time. Instead, consider engaging a professional with the skills and experience to guide you through the process. certified financial planner™ (cfpThe ) designation is considered a standard of excellence in financial planning, and advisors with that credential are held to the fiduciary standard of acting in your best interest at all times. Also find someone who respects your (limited) time and understands your priorities. They will be best able to ensure that you continue to make progress towards your goals.
understand the process
The planning process usually begins with a conversation about your values and your financial objectives. The goal is to clarify and prioritize your financial goals and identify any obstacles to reaching them. Like regular checkups with a general practitioner, this initial conversation with your consultant can help pinpoint any significant problems and often give an indication of where you need to focus first. Often, any urgent need can be addressed relatively quickly and easily. For example, for many doctors, their practice often represents their most valuable asset. In that case, immediate first steps may include making sure you have the proper insurance to protect your income in the event of an accident, injury, or lawsuit.
Once you’ve addressed urgent issues, you can slowly begin to build a comprehensive financial picture of all your income and expenses, how much you’re saving, and your future plans. Working backwards from your cash flow, your advisor can help you estimate how much you’ll need for each of your goals, including retirement. Those savings goals, in turn, inform you of the rate of return you need to earn on your investments. That rate of return, combined with your risk tolerance and time frame until you need the money, lead to determining an appropriate asset allocation.
The result is a better understanding of your overall financial life and determines whether you are on track to reach your goals. Plus, with a clearer view of how you’re spending your money today, you may be able to find ways to reallocate some of your current outlay for future payments.
Use your limited time effectively
Financial planning is never a one-time event, but for doctors with busy schedules, the most successful approach is usually little-to-mind planning over several months. Instead of waiting until you get off work or a large chunk of free time (which may never come), you can progress to smaller meetings, sometimes smaller ones, to tackle it all at once. Work with your schedule, such as in the morning before work or after hours. You may also rely on a spouse or other family member to provide information to your advisor. By taking bite-sized pieces and focusing on each area in turn, you will gradually begin to see an outline of your overall financial picture. Then, once you have a long-term plan, you can go into maintenance mode and adjust whenever circumstances change.
Take advantage of your benefits smartly
As a doctor, you may have access to savings and investment opportunities that others do not have. For example, some hospitals and private practices offer non-qualified deferred compensation plans or profit-sharing defined benefit plans — in addition to a qualified plan such as a 403(b), 401(k), or 457 — which typically There is a very high contribution limit and allows you to accumulate significantly more for retirement. If you’re not already doing so, consider how you can max out any tax-advantaged accounts. Apart from this, you may get offers to invest in some unique private ventures which have the potential of high returns. When these arise, keep in mind that higher potential reward often means higher risk, and no individual investment may work out as planned. Before investing, do your research. Or, if you don’t have time to thoroughly examine the opportunity, ask your advisor to evaluate the risks so you understand whether they might fit into your overall plan.
Contact a member of our team To learn more about how we can help you.