Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

For physician asset protection, leverage qualified retirement plans

Michael Zhuang
Physician
April 22, 2011
Share
Tweet
Share

Medicine is a profession fraught with legal risk. According to an AMA survey for the period 2007-2008, for every 100 doctors, there were 95 lawsuits.

The survey also reveals that physicians 55 years and older are eight times more likely to get sued than physicians 40 years and younger.

Not that they make eight times more medical errors, just that they are richer lawsuit bait.

That reminds me of a joke. Why won’t a shark attack a lawyer? Professional courtesy.

Back to the topic at hand, many physicians in solo or small practice simply use a SEP IRA as their retirement plan. It is very simple to set up, and the contribution limit is a generous 25% of earned income or an annual limit of $49,000. What is there not to like about it?

Well, from an asset protection perspective, they are not as ironclad as retirement plans qualified under the Employee Retirement Income Security Act (ERISA).

ERISA applies to all employer-sponsored plans, including 401(k) plans, 403(b) plans, profit sharing plans, defined benefit plans, etc. ERISA states that the employee benefits under qualified plans “may not be assigned or alienated.” This puts assets in these plans out of reach of claimants and creditors.

IRAs, including SEP and SIMPLE, are not covered by ERISA; they do not enjoy blanket federal protection. They are protected by state laws which vary greatly. Therefore, for asset protection purpose, physicians should put their retirement assets in ERISA-qualified plans as much as possible.

Unlike IRAs, setting up a qualified plan is not as easy as walking into a brokerage. There is much paperwork involved, and physicians should only do it themselves when their patients can treat their own disease.

Many insurance companies exploit this by pushing pre-packaged qualified plans that have high hidden expenses and limited investment options. Avoid them. Instead, look for an independent fiduciary plan administrator.

Michael Zhuang is founder of MZ Capital, an independent wealth management practice specializing in helping physicians achieve financial freedom.

 

Submit a guest post and be heard on social media’s leading physician voice.

Prev

New doctors tend to become employed physicians

April 22, 2011 Kevin 19
…
Next

Osteoporosis in patients with HIV

April 22, 2011 Kevin 1
…

Post navigation

< Previous Post
New doctors tend to become employed physicians
Next Post >
Osteoporosis in patients with HIV

ADVERTISEMENT

More by Michael Zhuang

  • a desk with keyboard and ipad with the kevinmd logo

    Why physicians will be sacrificial lambs in future Medicare cuts

    Michael Zhuang
  • a desk with keyboard and ipad with the kevinmd logo

    Physicians on the debt ceiling: Not a bang, but a whimper

    Michael Zhuang
  • a desk with keyboard and ipad with the kevinmd logo

    Why physicians are not wealthy

    Michael Zhuang

More in Physician

  • Complicity vs. protest: a doctor’s choice

    Patrick Hudson, MD
  • When cancer costs too much: Why financial toxicity deserves a place in clinical conversations

    Yousuf Zafar, MD
  • The hidden rewards of a primary care career

    Jerina Gani, MD, MPH
  • Why doctors regret specialty choices in their 30s

    Jeremiah J. Whittington, MD
  • 10 hard truths about practicing medicine they don’t teach in school

    Steven Goldsmith, MD
  • How I learned to love my unique name as a doctor

    Zoran Naumovski, MD
  • Most Popular

  • Past Week

    • Why doctors must fight for a just health care system

      Alankrita Olson, MD, MPH & Ashley Duhon, MD & Toby Terwilliger, MD | Policy
    • The human case for preserving the nipple after mastectomy

      Thomas Amburn, MD | Conditions
    • Nuclear verdicts and rising costs: How inflation is reshaping medical malpractice claims

      Robert E. White, Jr. & The Doctors Company | Policy
    • IMGs are the future of U.S. primary care

      Adam Brandon Bondoc, MD | Physician
    • Why I left the clinic to lead health care from the inside

      Vandana Maurya, MHA | Conditions
    • How profit-driven hospitals fail long-term patient care

      John Corsino, DPT | Conditions
  • Past 6 Months

    • Health equity in Inland Southern California requires urgent action

      Vishruth Nagam | Policy
    • How restrictive opioid policies worsen the crisis

      Kayvan Haddadan, MD | Physician
    • Why primary care needs better dermatology training

      Alex Siauw | Conditions
    • Why pain doctors face unfair scrutiny and harsh penalties in California

      Kayvan Haddadan, MD | Physician
    • How a doctor defied a hurricane to save a life

      Dharam Persaud-Sharma, MD, PhD | Physician
    • What street medicine taught me about healing

      Alina Kang | Education
  • Recent Posts

    • How profit-driven hospitals fail long-term patient care

      John Corsino, DPT | Conditions
    • Complicity vs. protest: a doctor’s choice

      Patrick Hudson, MD | Physician
    • How physician burnout and system reform are shaping the future of U.S. health care

      Irim Salik, MD | Policy
    • How nature is inspiring the future of pain medicine

      Varun Mangal | Conditions
    • Why doctors must fight for a just health care system

      Alankrita Olson, MD, MPH & Ashley Duhon, MD & Toby Terwilliger, MD | Policy
    • Affordable postpartum hemorrhage solutions every OB/GYN can use worldwide [PODCAST]

      The Podcast by KevinMD | Podcast

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 2 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

ADVERTISEMENT

ADVERTISEMENT

  • Most Popular

  • Past Week

    • Why doctors must fight for a just health care system

      Alankrita Olson, MD, MPH & Ashley Duhon, MD & Toby Terwilliger, MD | Policy
    • The human case for preserving the nipple after mastectomy

      Thomas Amburn, MD | Conditions
    • Nuclear verdicts and rising costs: How inflation is reshaping medical malpractice claims

      Robert E. White, Jr. & The Doctors Company | Policy
    • IMGs are the future of U.S. primary care

      Adam Brandon Bondoc, MD | Physician
    • Why I left the clinic to lead health care from the inside

      Vandana Maurya, MHA | Conditions
    • How profit-driven hospitals fail long-term patient care

      John Corsino, DPT | Conditions
  • Past 6 Months

    • Health equity in Inland Southern California requires urgent action

      Vishruth Nagam | Policy
    • How restrictive opioid policies worsen the crisis

      Kayvan Haddadan, MD | Physician
    • Why primary care needs better dermatology training

      Alex Siauw | Conditions
    • Why pain doctors face unfair scrutiny and harsh penalties in California

      Kayvan Haddadan, MD | Physician
    • How a doctor defied a hurricane to save a life

      Dharam Persaud-Sharma, MD, PhD | Physician
    • What street medicine taught me about healing

      Alina Kang | Education
  • Recent Posts

    • How profit-driven hospitals fail long-term patient care

      John Corsino, DPT | Conditions
    • Complicity vs. protest: a doctor’s choice

      Patrick Hudson, MD | Physician
    • How physician burnout and system reform are shaping the future of U.S. health care

      Irim Salik, MD | Policy
    • How nature is inspiring the future of pain medicine

      Varun Mangal | Conditions
    • Why doctors must fight for a just health care system

      Alankrita Olson, MD, MPH & Ashley Duhon, MD & Toby Terwilliger, MD | Policy
    • Affordable postpartum hemorrhage solutions every OB/GYN can use worldwide [PODCAST]

      The Podcast by KevinMD | Podcast

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

For physician asset protection, leverage qualified retirement plans
2 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...