Medics are among the professionals who get the highest incomes, especially as they get more experience in their field. However, most medics are still unable to save sufficient funds for retirement due to several reasons. For a start, many of them have expensive student loans before they even begin working. They spend many years trying to clear the student loans since their income level when they start off is not very high.
Secondly, most medics spend a lot of money on setting up their own practice. Even though they earn good money, the practice may have so many expenses, especially before business peaks. Rental costs, upkeep, staff salaries – all these running expenses can make most doctors only consider retirement planning as an afterthought.
Retirement planning for physicians
Majority of medical professionals do not have adequate knowledge on retirement planning. Many are unaware of the value of planning for retirement at an early stage of their careers. They don’t take advantage of the retirement plans offered by their employers or organizations in their field. When you make a bad decision based on information you get from friends or colleagues, your retirement portfolio is significantly compromised.
Seek long-term benefits
Before you agree to invest in a particular asset, ask yourself what long-term benefits it offers. Individual stock trading and other high-risk investments may not provide you with the long-term savings and cushion you need to secure funds for retirement. Consider other retirement plans such as the 401(k) and self-directed IRA if you are looking to gain in the long-term.
Cut back on expenses
Take time to review your current expenses. How much are you spending to run your practice? If you can cut down in order to set aside more savings, do this. For instance, you may consider moving to a smaller space or changing things in your practice that are expensive and don’t have any returns. Another great idea would be to partner with another medic and merge their practice with yours. This will help you split the cost of running the clinic so that you can get a chance to save more.
Should you decide to spend money on retirement, make sure the amount is automatically deducted from your checking account? You can set up a direct debit to your savings account. If you have a pension plan or IRA, make sure you contribute as much as you can.
You may consult a financial advisor to help you review viable options to save for retirement. Ideally, your retirement plan should help you save as much as possible on taxes. Compare each option that is presented to you and do a bit of research to ensure that it is in line with your financial goals. With the high cost of running a practice and hectic schedules, it’s easy to make poor financial decisions that cost you a lot in the future.
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