Best Financial Planning for Physicians Florida
Best Financial Planning for Physicians Florida
The most important decision of our lives, how much to save for retirement, has always been the stepchild of financial decisions.
For high-income doctors, they might send a ton of money to retire and hit the $19,500 regulatory maximum.
They skip the whole thinking about saving percentage to the more exciting question of how to invest their money.
Interestingly, in both cases, while they are seemingly saving enough, they are not likely going to be able to retire on their own terms.
The crew that we think is most at risk of inadvertently under-saving for retirement are the high earners.
We have observed a set of conditions that set up high earners to fail to save (enough).
First, for physicians making $400,000, the amount they pay in taxes, alone, is often more than other folks might have made in annual salary.
So, the first mind trick is the sheer volume of dollars they are dealing with.
They might save “a lot” feel like it is enough just because it is more money than they have ever dealt with (like those tax dollars).
Second, lifestyle creep is real.
Retirement Planning for Physicians in Florida – Best Financial Planning for Physicians Florida
The problem with physicians is their wealth comes so suddenly and, again, the money seems so enormous that they get the perception they can buy everything.
How many times have people actually said to me, “I make a lot of money? I don’t want to think about how I spend it.”
Well, fine. But then you better spend a LOT of time figuring out how to save first (and then stay out of credit card debt).
Unlike most American workers who can pick a savings rate that fits squarely within their retirement plan, set it, forget it, and wake up rich and ready to retire, folks who make a lot of money have it more complicated. Back to our original example. Someone making $400,000 saving so much money, wow, $19,500 PER YEAR, is, well, under-saving. Take $19,500 as a percentage of $400,000, and you quickly realize they are saving a little less than 5% of their pay. Do you know how many docs are probably doing this?
Not to harp on physicians, but let’s be real.
They don’t start making their salary until they are in their mid-30s, so between the need to save more money because they make more money (since social security will have less impact on their wealth than people who make less money) they actually have to save even more because they are getting a later start.
At the age of 35, someone making a lot of money, and nothing saved would need to save about 25% of income to barely slide into age 65 retirement home base. Yikes. What were they saving before? 5%.
Ouch.
Financial Advisors for Physicians in Florida
Now, what if we are talking about a surgeon or a physician who doesn’t want to sign up to have to work until 65? What if they wanted to retire closer to 55? Yep, it’s right there. 40%. To get the right to not have to work until 65.
For high earners, make the savings decision first, before all other decisions.
Otherwise, you might sentence yourself to feel the intense pain of massive lifestyle reductions later or, rather, the pain of not being able to retire, at least not on your own terms.
Financial Planning in Florida – Our Process
Our clients are people, not research bunnies. Thus, their lifestyle needs, each year, will drive the future resultant portfolio survivability, not the other way around.
The changing mortality data is for the population as a whole and our clients, being unique, will not die on that prescribed day.
In other words, we need our money to last until we are done with it, which might not be when we die.
We also need to use our money both unevenly and, in a pattern, very different than that prescribed by the research, to enjoy our life. So, in practice, we do annually examine the portfolio performance and our client`s withdrawals to retest portfolio survivability and changing mortality requirements.
We want our clients’ money to last if needed to support enjoying their lives to the fullest.
Spending patterns are unique to all families and will never match the timing of the portfolio performance.
Your trip to China may well coincide with the year after the poorest results experienced by the portfolio.
Do you delay the trip until the portfolio rebounds, or do you go and then adjust for it in the future?
Will you be more active in your 50`s and 60`s or should you delay your dreams until your 80`s when the funds will be more certainly be available? The pattern of your life may well dictate that you need to use your retirement funds more in your 50`s than in your 70`s, to say support early retirement.
Government benefits kick in during your 60`s.
Many of our clients have a declining withdrawal plan that starts high and finishes low due to this.
They are active as early seniors, but less active and less traveled as they age.
So, your portfolio survivability per the mortality tables is dependent on uneven performance patterns that require adjustment to the withdrawals being made.
In contrast, your lifestyle needs dictate a withdrawal pattern that is unique to your family, uneven, ever-changing, and sometimes unforeseen.
Our challenge is to assist clients in matching THEIR needs to THEIR portfolio to obtain the optimal balance between portfolio longevity, portfolio performance, and enjoying life.
We need to plan our lives first and then seek to integrate our finances into our chosen path. This is the best way get to be the best you and live the best life. For sure it is necessary to understand your current financial position, think about where your current path is taking you, and find solutions for financial issues as soon as possible. Holistic comprehensive financial planning is good at this, but it provides weak answers to the whys.
So Real financial planning introduces the idea of life planning. Life planning should be considered the first part of financial planning in the financial planning process. For sure, the first goal for the planner is always to get to know you. Know Your Client is a foundational concept in the investment industry. But know what? Just your financial situation and your perceived surface goals? Life planning is like “Know Your Client” on steroids. It will allow your planner to truly aspire to do what is in your best interest because they know who you want to be and what life you want to live. How can your planner truly be a fiduciary unless they know the true YOU?
So before next reviewing your finances or first considering your finances, stand back and consider that your finances should not determine your life. Rather your chosen life should be supported by your finances. What is required of your finances to get to the best you and to live the best life? And be sure of one thing. This will take you into some uncomfortable discussions with your spouse and or planner. It is not easy to have such intimate and personal conversations with an outsider such as a planner. It will also possibly reveal some great disparities of thoughts between you and your spouse.
If you already have a planner or advisor, before your next visit to your planner/advisor, ask yourself if he is in a position to truly help you get to the best life for you. Does truly know you? Does she/he know your values, your beliefs, your worries, and your sources of joy? If you do not currently have a planner and are seeking one, add life planning on to the list of important attributes for the selection of one.
Contact us for a first complimentary meeting. We serve clients in the whole country and will be glad to assist you anywhere you are in the USA.
Best Financial Planning for Physicians Florida