The 7 Pieces of Every Physician’s Financial Puzzle

As you experience a surge in income, you may face challenges like systematically funding a long-term goal or understanding how and when to take money out of your practice. You may also have questions like how quickly you should pay down debt or build up your savings.

Due to the extended training that preceded your income-earning years, you may have started saving for retirement later in life, and may feel the need to “catch up.” You may want to consider how you can turn assets into viable income streams during retirement and the tax implications of retirement fund withdrawals.

Risk management is much more than insurance. You need to consider things like what would happen to your practice if you were unable to work as a result of accident or illness, as well as what you would do if you were the victim of a frivolous lawsuit.

Your investment portfolio should fit within the framework of your financial plan, rather than reflect spontaneous or emotional decisions. Have you implemented a specific investment plan for each of your goals? Who is accountable to you for the coordination of all your investments?

Estate planning is complex and ever-changing, and should involve legal counsel as well as financial guidance. Are you adequately prepared to provide for your loved ones? What steps have you taken to appropriately protect your assets?

Few people pursue the practice of medicine realizing that they will also need business skills. How would your voluntary or involuntary separation from work impact your financial affairs? When and how do you plan to exit the practice? How can you generate more income from your practice or other business activities to supplement your earnings? Are you and your partners in agreement on an exit strategy?

With help, you won’t have to experience decision fatigue over things like:

  • The pros and cons of leasing versus buying a car
  • Where to find a competent CPA, attorney or other professional
  • Navigating the fine print in your compensation and benefits package