Are You Ready for Retirement?
When thinking of retirement, the feeling among most older workers is normally excitement. People tend to, ‘count down the days’ until they can finally retire. However, that is not usually the case for many physicians. Those who work in the medical field tend to have a more complicated relationship towards retirement.
The average age of active licensed physicians is 51. Years of medical school, residency, and building up a practice mean that many physicians do not start earning a substantial income until after age 30. That means fewer years allotted to them in which to accumulate enough savings for retirement while simultaneously paying off things like student debt, mortgages and children’s college educations. Not to mention the doctors who also add an expensive lifestyle into the mix.
A combination of these things, on top of a lack of financial understanding can mean working past the age of retirement for many doctors.
Your time is irreplaceable and there is no telling when that time will run out. Many doctors have expressed their concerns about retirement. Will I lack purpose? What if I lose my identity? Will I feel alone without my business relationships. These thoughts have put some physicians in a sort of denial about retirement, leaving them unprepared when the time does come. There is life after medicine. The key is to be prepared and ready for that next phase of life.
Here is a list of items to understand in your life that will provide a great deal of assurance during your wealth distribution and transfer phase.
- Understand your current cashflow needs. It will not change as dramatically as one would expect in retirement. Knowing with some level of detail your current cash flows will provide insight on your current overspending and will encourage stronger saving habits. It will also guide you on your future spending ability and how to better manage your short-term cashflow needs. No other financial success will better serve your future than learning how to live well within your means.
- Understand how taxes will effect your use of retirement accounts such as 401k, SEP IRA, etc. Look to fund other tax saving accounts that do not have impact your taxes. Your taxes will be one of your largest expenses in retirement. Spending time understanding this now can greatly impact your cashflow in the future.
- Understand how to best use your Social Security and medical benefits. There are a lot of different viewpoints on this. We recommend talking also with outside SS benefits groups to possibly improve your cashflow here. A small amount of review can provide big improvements here.
- Health insurance review. Many will not be covered for both Long Term Care and Health during retirement. New insurance options are out there. Knowing what your options and costs can be will guide you in understanding your future cashflow.
- Preparing for the sell of your business is huge. This transition will be unique to both you and your family. Many physicians don’t have a well enough understanding of how this works, and the better prepared business will sell for more.
Cost for getting advice on this is not as expensive as one would expect. But having someone to turn to can be very helpful during the planning phase as well as 15 years after retirement. Your plans will change durning this time period and you will appreciate the help of ones you can trust.
We know that the thought of retirement can seem daunting. There are plenty of other things that keep your mind occupied through the day, and financial planning can easily get lost in the shuffle. At Glide Financial we work to make this process effortless and straightforward. You have worked for years to get to where you are now as a physician. We want to help ensure that you’ll be able to reap the rewards of your dedication for your whole life.
More questions about Retirement? Shoot us an email!