Treat Your Wealth Like Your Health

The average medical school graduate owes $250,990 in total student loan debt, 7x as much as the average college graduate.

Depending on your stage in life, there are some strategies you might be eligible for and could explore to make your education debt a little more manageable:

• Deferral Timing
• Loan Forgiveness
• Lowering Spending
• Extra Payments
• Income-Driven Repayment
• Refinancing/Consolidating Loans

Regardless of our debt, income, or your ultimate financial goals, customized financial planning is the most efficient way to manage your finances and plan for your goals, whatever they may be.

Financial Planning for Physicians: The Five Gaps and Five Solutions

Lastly, the five important pillars of wealth management can impact leaders in higher education (aka physicians). More specifically, these pillars make you think about the considerations you should have when it comes to your financial wellness.

Asset Location

The right securities need to be in the right place. Depending on your specific financial plan, it’s very likely your Roth IRA should be invested differently than your other qualified accounts… think IRA, 403(b), 401(a), or 401(k). If you have a taxable investment account (like a brokerage account) it should likely be invested differently as well.

Estate Planning

Estate planning, like medicine, is constantly changing. Laws can change on an annual basis when new administrations enter the White House or both. The most common item I’ve observed is the canyon that exists between estate plan updates over the years. It’s very common for doctors to shift their careers from state to state over a decade or two. When those changes happen, it’s incredibly easy to put the estate plan updates at the very bottom of the to-do list, which can lead to major concerns.

Long-Term Care Planning

It’s interesting to hear the opinions of doctors on long-term care insurance. Half of a financial advisor’s clients will tell them they can’t sleep at night knowing they don’t have one, the other half might say they wouldn’t be able to sleep at night knowing they purchased one. No matter what the opinion is, we all deserve financial peace of mind, which is why planning around the concept is so important.

Tax Planning in Retirement

It’s important to clarify – tax planning in itself is critical in all phases of life, especially when a physician earns the income they’ve worked hard to earn. Tax planning in retirement is what as financial advisors, we have observed to be quite a new experience for physicians. When you look at where retired physicians earn their living in retirement, we must look at what has been accumulated during all the working years. Commonly you may have amassed a large number of qualified funds and are now looking at very large taxable distributions from those accounts to fund retirement.

The Distribution Phase

The distribution phase is exactly as it sounds, it’s the phase in life after you’ve worked to accumulate your assets and are now distributing those assets to create the life in retirement you have dreamt about all these years. Why is the distribution phase challenging? Simply because picking and choosing where you distribute money throughout your retirement life can be tricky and can have adverse consequences if not done correctly.

A “Board Qualified” Advisor Who Has Your Best Interest¹

If anyone understands the value of extensive certifications, it’s healthcare professionals. Like medicine itself, financial planning requires a set of very specific expertise and background knowledge in order to do well. Doctors all over the country have unique circumstances that put each one of them in a different position than their peers, yet they all have the ability to set themselves and their families up for the long term due to the nature of their work and the income they can demand.

The fact of the matter is that physicians require a personalized financial plan unique to their situation, in the same manner, their patients require a personalized healthcare plan. Working with a Certified Financial Planner® who can anticipate and understand challenges in financial planning for physicians in order to create a successful outcome, is something that should be sought after with the same intensity as one seeks elite medical care.

Remember, regardless of your debt, income, or your ultimate financial goals, customized financial planning is the most efficient way to manage your finances and plan for your goals, whatever they may be.