A quick guide to financial planning for doctors
Everyone has different financial planning needs, and nowhere is this more evident than for doctors and physicians. While their years of education and specialized training may have prepared them well for their practice, they may not be prepared to plan for their financial future on their own. That is why it is especially important to work with planning experts who have experience in dealing with the unique financial needs and challenges that doctors face.
What are the most important steps in financial planning for doctors?
If you are a practicing physician, your line of work presents unique challenges that can dictate whether your financial future is secure. Here are a few of the most important things that experts recommend to keep in mind during your financial planning:
1.Managing your debts — While doctors may have more earning potential than many other professionals, they can also expect to owe as much as $400,000 in student loans after they graduate. However, many will often take out physician loans on houses and cars while they are still paying for medical school.
These large debts will become a problem for those who may need to borrow money in the future to open their own practice. Careful debt management is the best way a doctor can lay a solid foundation for their financial future.
2. Protecting your assets — According to the American Medical Association, as many as 34% of practicing physicians have been sued by patients. Medical malpractice lawsuits could be disastrous to anyone without an asset protection plan in place. Your financial advisor can instruct you on safe and legal practices to help keep your family’s assets safe in the event of a lawsuit.
3. Updating your insurance — As you grow in your practice and your earnings increase, your insurance needs will change. Be sure to check up on your life insurance, liability insurance and practice overhead insurance at least once every six months to make sure you are still appropriately covered as you advance in your career.
4. Investing for retirement — Financial planning experts suggest that doctors save 15% of their gross salary each year for retirement. This should start as soon as they finish their residencies and fellowships and begin earning a salary. A financial planner can help you to invest your savings in a way that best helps you meet your retirement goals.
5. Passing on your practice — When you retire, you may not necessarily want your practice to close its doors. In many states, you can pass on your practice to someone who is not a doctor themselves, who can continue the practice by hiring a doctor to take your place. An estate planning specialist can help you decide the best ways to take care of your practice after you retire.
Talk to a ProVise CFP® professional about your financial planning future as a doctor
At ProVise Management Group, our CERTIFIED FINANCIAL PLANNER™ professionals can get to know you and your current financial circumstances, goals, risk tolerance and personal values to help you develop a plan that works for you. We can also create a written plan for you at a fiduciary standard of care. All our written plans come with an unconditional money-back guarantee. If you are unhappy with your written plan, you can return it to us, and we will refund 100% of the fee paid.
Are you ready to talk to a professional about financial planning for doctors? Contact ProVise today to schedule a complimentary consultation.