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Evan M. Haines, RICP®
Financial Advisor
Prudential Advisors
222 Independence Street
PO Box 632
Perryopolis, PA 15473
Phone: 724-736-2130
Email: evan.haines@prudential.com
May/June 2024
Retirement Planning Tips for Physicians
A 2023 Medscape survey reported that 59% of physicians had a net worth of less than $1 million, an amount unlikely to be sufficient for them to live as they’d like in retirement. One reason given for this retirement security gap is that, like many high-earning professionals, physicians fall into the trap of becoming too comfortable with their current financial situation. They overlook changes that generally come with retirement and the critical need to save to meet the costs of those changes.
For a comfortable retirement, as a physician, you must be aware of your current income, health needs (now and in the future), family commitments, and other lifestyle requirements (again, now and in the future). The following are some not-always-considered tips to get retirement planning rolling or reenergize your current efforts.
Be clear and realistic about your retirement horizon. You may think you’ll always practice medicine, but there’ll probably come a time when you’ll change that view to cutting back on your practice and eventually retiring completely. The sooner you start saving for retirement, the more wealth you may be able to accumulate for that time.
Build an emergency fund. As with any profession, medicine has its share of risks. You could lose your job, your practice could suffer financial losses, or you could be sued by a patient. That’s not to mention any other family emergencies that can crop up and cut into assets.
Prioritize Student Loan Payoff. Quicker loan payoff saves you interest and frees up money to put toward your retirement savings. Since you’re used to not having that money, switching payments to retirement savings shouldn’t disrupt your current lifestyle.
PHYSICIANS BELIEVE THAT THEY NEED AN AVERAGE OF $3.9 MILLION SAVED TO AFFORD RETIREMENT, ACCORDIING TO MEDSCAPE'S 2023 "PHYSICIANS EYE RETIREMENT REPORT."
Postpone Social Security benefits. Each year until age 70 that you postpone claiming Social Security benefits increases those benefits by 8%, giving you more income for later retirement. While your expenses may drop in early retirement, they generally rise later.
Use a financial professional. Just as you have your specialty, financial planners have theirs—among which are assisting people in investing to achieve a comfortable retirement and meet other financial goals.
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