Physicians who are also business owners have two jobs: treating patients and running their business. Hiring and keeping employees is one of the job descriptions of the latter. It is no surprise that choosing and maintaining employee benefits is not at the top of an exciting to-do list. Even if hospital systems are not your direct competition, they are often competing for …
Choosing a retirement plan for your medical clinic
A physician’s financial journey isn’t always linear, and the journey can’t always be predicted in a how-to book. While the hospital-employed physician normally gravitates toward a path filled with benefits and retirement plans, the equity owner physician, or physician practice owner—both terms used interchangeably—has a much different pathway. Let’s dive into the equity owner physician a bit further.
Why choose ownership?
Like the term “business owner,” equity ownership physician is a generic …
Physician practice ownership: risks, rewards, and reality
Don’t let a lawsuit undo decades of hard work. Here’s how to keep your wealth safe!
According to the American Medical Association, approximately one-third of all physicians will face a malpractice lawsuit, and just under 2 percent of physicians will face a lawsuit each year. While the volume of lawsuits seems high, roughly half of these lawsuits are considered frivolous. These statistics should prompt any physician to add asset protection measures …
Smart asset protection strategies every doctor needs
When a physician signs on at a new hospital, a signing bonus is often included in the compensation package. This bonus can range from a small perk to a significant percentage of income, and its structure can be either straightforward or confusing. The signing bonus is one of the items in a physician’s compensation contract that can be negotiated, although some give-and-take is often involved. For example, in some situations, …
The secrets of physician signing bonuses
Selecting a mortgage can be daunting. Understanding the mortgage terms, the total cost, estimated property taxes and insurance, and the bottom line on a month-to-month expense can be a lot to take in.
For many individuals, utilizing a mortgage to purchase a home can lead to months of underwriting, painful discovery and disclosure of financial documents, and consistently changing deadlines. This process aims to prove that due diligence is completed thoroughly …
Even though their incomes often exceed the phaseout threshold for funding Roth IRAs, physicians have been utilizing loopholes in the tax code to fund Roth IRAs for the past decade or more. Converting IRA funds to Roth IRA funds allows a taxpayer to change a tax-deferred IRA to a tax-free Roth IRA. In doing so, the taxpayer must pay taxes on the balance of the account that is …
Backdoor Roth conversions may be going away: What this means for physicians
There’s not a perfect financial planning vehicle in existence. Salary deferral plans, like many retirement plans and 457 plans, carry pros and cons. Many hospital systems have a combination of 401(k), 403(b), and 457 plans. The 401(k) is often designed for the employees who make under a certain amount, say less than $150,000 or so. Then the 403(b) with an option to contribute to a 457 salary deferral plan is …
Pros and cons of 457(b) plans: What physicians need to know
With COVID-19 well underway and impacting everything from the economy to everyday life, here are a few financial planning strategies during a crisis.
1. Understand your budget. During uncertain times, spending usually reverts to a survivalist mentality. This is a good time to prioritize what really matters most. As we’re all staying home during COVID-19, entertainment and food costs have greatly reduced. I know I’m cooking meals and finding …
Physician financial planning during uncertain times
About a decade ago, I had my first doctor-client. And part of what they wanted to discuss was budgeting in order to save more. They just got new jobs and wanted some general planning for the sake of making good decisions.
Software for budgeting and spending history didn’t exist the way it does now. I wanted to provide the best help I could on this topic, and I knew about budgeting, …
The doctor’s budget — remastered
Medical residents and fellows have always been in an interesting situation. They are embarking on the foothills of their career and obtaining the skills and knowledge they need to press forward. They are likely in the most idealistic mindset they’ll ever be in their career, and they’re networking with their future general practitioners and specialists; it’s an exciting time of life.
One twist is that they have …
4 financial mistakes medical residents make and how to avoid them
In a young physician’s life, financially speaking, the single most important aspect to financial well-being has nothing to do with money; it has nothing to do with investments; it has nothing to do with budgeting and saving. I think financial advisors and financial planners sometimes miss the mark on what’s really important.
What does it take to be a doctor? I started dating my wife exactly one month before she started …
The most important aspect to a young doctor’s financial plan
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