Healthcare Professionals, is Your Retirement Planning Flawed?
By Michael Rogers, Operations Director of USInsuranceAgents
What if the retirement advice you’ve been relying on is flawed? What if generalized retirement advice is no longer good enough, and you find yourself in a position where you must seek specialized advice based on your profession? It might not be as far-fetched as you think. If you’re a healthcare professional, doctor, nurse or even an accountant or administrative assistant working in the medical field, you might want to take a second look at your retirement plan and see if there aren’t at least a few places where it can be improved.
There can be no doubt the medical field is a taxing one. The pressure of being at your best when it isn’t all that easy to do so, and the added pressure of having life-and-death stress arrive at times when you might not be as well prepared for it as you would like can force one to consider retiring earlier than they might want. From a financial standpoint, it can result in the classic squeeze. It becomes harder and harder to stay at peak performance the longer you try to sustain your income, but the sooner you set a retirement date, the riskier your financial situation gets. This presents healthcare professionals with a need to prepare alternatives to simply quitting. Many choose instead to “wind down” their careers and possibly even supplement their retirement savings by building a second career instead of just abandoning the first.
What wealth you have set aside for retirement might not generate the spectacular returns many market bulls insist are right around the corner either. The stock market might seem to be in unusually good shape, but as someone nearing retirement age you should know better than to bet your retirement on investments as potentially volatile as hard charging stocks. It is simply not good investment advice for you to bet the wealth of an entire career on rapid growth when the reality could see you sustain disastrous losses with no time or mechanism to recover.
Not Bullish Enough
Once a career is established, many successful professionals spend a little more than they should, believe their hard work has paid off and now they should be allowed to enjoy it a bit. This is a perfectly fair point of view, especially for someone who has earned what they have. At the same time, it must be balanced with a prudent and defensive view of the financial future. As many investment advisors will tell you, there is no magic number. How much you should be saving for retirement is a question best answered by evaluating all your circumstances, including the changes in your financial situation that result every time you find a way to add to your wealth. All that said, when there are opportunities to save more, they should be utilized, lest you come up short on wealth when you can least afford it.
Tax-advantaged investments are generally a good idea, especially if they are part of an overall plan for deferring liability through a dedicated retirement account like an IRA or 401k. Individual investments that produce tax advantages often have compelling sales pitches, but occasionally they can be more trouble than they are worth, especially in a situation where the tax climate changes and they must be re-positioned at non-trivial cost or worse, sold at a loss to avoid higher immediate taxes or long-term liability. This strategy should be handled with great care.
Even if you are close to retirement, it never hurts to check with a new financial advisor to see if there is something you’re missing. For example, many investors stick with tried and true mutual funds even though in a lot of cases they are both more expensive and slower performing than the equivalent exchange traded funds or ETFs. Mutual funds can also be a drag on your returns due to obscure tax liabilities. If your profession is one that has the potential to change your situation for the better or worse with regard to investing and retirement, it is doubly important you make absolutely sure your situation is well-positioned enough to guarantee a successful retirement.
Michael Rogers is the Operations Director of USInsuranceAgents.com. With over 5 years of experience and knowledge in the insurance industry, Michael contributes his level of expertise as a leader and an agent to educate and secure coverage for thousands of clients