Whether you recently finished medical residency or are an established Texas physician, it is never too early to begin thinking about retirement and discussing your future with a financial advisor. While carefree days spent traveling, volunteering or golfing in Florida may seem far off, they become a reality once you have a plan in place. Having an open dialogue and honest conversation about how you envision retirement enables you and your advisor to map out a plan and schedule routine, follow-up visits to ensure you are staying on the right path.
Oftentimes, when you read articles about retirement, they tend to highlight the biggest mistakes people make when saving. Today, let’s take a closer look at some of the positive steps physicians can take to plan for a successful retirement.
Identify and Envision – The first step in planning a successful retirement is being honest with yourself about what your retirement looks like. Do you want to volunteer? Travel? Sail around the world? Begin that passion project you have been dreaming about? What you envision to be an ideal retirement will be different from someone else’s, and your savings plan will need to reflect that vision.
For example, some physicians will want to pursue another career once they retire, perhaps with just part-time hours. With a continuing income, this can change certain retirement savings goals. On the other hand, if you dream of relaxing on sunny beaches and golfing in your retirement, your savings goals should be far more aggressive and will require strategic preparation. If you plan to travel during your retirement, that too will require an additional savings plan. Investing the necessary time to determine how you envision spending your retirement and using that vision as a platform to design your plan is a critical first step toward success.
Set Short-term Goals – Determining a monetary amount you feel would suit your retirement lifestyle can be helpful in planning and saving, but it can also seem overwhelming. Instead, try to devise monthly, quarterly or annual savings goals that are not as intimidating and can be more easily reached. Having small, achievable goals towards retirement can help you stay on track, in addition to helping you abide by your planned budget. Once you determine how much and how often you will save, it is time to set up a meeting with your financial advisor to discuss investment options for growing your savings. A skilled advisor can help you set up strategic short- and long-term investment goals based on how many years you have until retirement.
Saying Goodbye to Bad Debt – Credit card and student loan debts are among the worst types of debt with infamously high interest rates. According to a 2012 report from the American Association of Medical Colleges, the median education debt for indebted medical school graduates was $170,000 and 86% of graduates reported having education debt. Thus, as a physician, you most likely have student loan debt to pay off. Keep in mind that the interest rates you are paying on your student loans are most likely higher than any savings can earn in today’s financial environment. Speak to your advisor about creating a plan to retire your student loans so you can truly start to save money.
Alleviate Your Risks – Insurance is a crucial aspect of a solid financial plan, and the fundamental purpose of insurance is to help you mitigate your risks. If you cannot avoid a risk in life, you can transfer this risk over to an insurance company. The alternative is to pay the price, literally, out of your own pocket should an unexpected event occur. Obtaining health, disability, life, and long-term care policies should be a primary concern for most people. When shopping for insurance coverage, it’s critical to find the optimal amount for your unique risk mitigation program and situation. This is where an experienced advisor comes in.
Accepting Help – As a Texas physician, you have a plethora of responsibilities to manage. Between helping patients, dealing with the logistics of your medical practice, and juggling family responsibilities, no one expects you to be an expert in every aspect of insurance and finance. Mastering topics such as investments, taxes, retirement planning, financial planning and insurance require significant time and dedication. Unfortunately, many people learn about these topics because of an unexpected event – simply put, when it is too late. Just as your patients come to you to take care of their health, financial and insurance advisors are educated and prepared to help you understand these complex topics.
Successful retirement requires a combination of strategic planning and saving, and the “ideal” retirement looks different to everyone. But you don’t have to do it alone. Partner with trusted financial and insurance advisors who can help you discover what tools are needed to plan your retirement.
If you’d like to learn more about steps physicians can take towards a successful retirement, feel free to reach out to us. We’ll partner you with an experienced advisor who can discuss different options for protecting your future and help you find the insurance coverage that meets your unique needs.