When people think about a doctor’s lifestyle, they might envision a high salary and a magazine-worthy, picturesque life. And while a medical career can be financially rewarding, there are several overlooked complexities that can make achieving retirement goals challenging. Careful, tailored financial planning for physicians alongside intentional lifestyle management can ensure that you balance current needs with tax-efficient retirement strategies and financial peace of mind along the way.
Besides the long hours and sometimes stressful workload, physicians can also bear large financial burdens too. And if a physician happens to marry another physician, what impact might that have on their financial and personal lives? Just when most couples might be planning a wedding and looking to buy a home, dual physician families are facing twice the debt, and half the free time. The need to control spending and manage their finances is amplified.
Through many conversations with physicians over the years, I’ve noticed a familiar theme. It is an innate desire to help others. To honor that motivation, it’s my calling to help them in return.
As a financial advisor, I’m here to help physicians maximize their leisure time with family and friends, so that they can be all in for their patients at work, and all in for their families at home. My job is to help alleviate the burden of managing their finances and the decision fatigue that can seem overwhelming at times. I help create the present and future that our medical professionals deserve.
Why is Financial Planning for Physicians Important?
Each profession presents a unique set of challenges, but maybe none more so than a physician. Over their professional lives, physicians will have to navigate a career path that starts them on an uphill climb to pay off their student debt, but despite their high income potential, many physicians will face choices between an increasing lifestyle and long term wealth accumulation. This unique set of challenges makes it all the more critical to make responsible planning choices and create healthy spending habits.
Dealing With Debt
While the average American student graduates with around $30,000 of student debt, that figure is dwarfed by the debt of the average medical student. And future physicians head into their chosen career with a passion to help people, despite knowing that it’s going to create a huge financial burden for themselves.
The average debt of a medical student is $200,000, but one firm who processed their own figures, situated the average debt of a doctor at $320,000. And with averages working in the way they do, we can assume that there are plenty of doctors out there with debts running as high as $450,000 or more.
There are different ways of dealing with a debt that high at the outset of a career. While loan forgiveness opportunities exist, those may not suit many as they often prescribe where and for whom a physician can work. They might involve accepting low paid work or significant relocations which often aren’t feasible, especially for dual physician families.
Having debt can feel like a weight, but we recommend you treat this as a business investment. You made this investment, but if you earn the average physician’s salary of $317,000 a year for ten years, the present value of that investment is $2.5 million. This is an investment that will pay off over time. Our goal as your financial advisor is to help you develop a payoff plan that allows you to enjoy your life now while also planning for the future.
Cash Flow Management
Physicians devote themselves to their profession, and there’s an awful lot to learn. It’s not surprising then, that they might know a lot more about anatomy, medication, complicated health conditions than they do about financial management. They’ve generally had to focus their attention elsewhere.
With unique demands on their financial lives, such as debt management and retirement saving, financial planning for physicians can help manage a very high cash flow in the most efficient way. Even maximizing contributions to saving plans might not enable a dual physician family to maintain their lifestyle in retirement. Extremely diligent planning including a thorough examination of potential tax implications will help a physician to make the most of their money now and for the future.
Managing cashflow can be a challenge for physicians, but we’re here to help. We can help dual physician families to balance the need to pay down their student loans in a reasonable amount of time with the need to provide the lifestyle they want and deserve. We can help them to strike a balance between paying off their debt, saving for retirement and lifestyle spending to provide a true picture of financial wellbeing.
This is an ongoing need for physicians. As new life developments happen, so does the need to adjust spending and saving, so we build long term relationships with our clients to help them through these changes.
Free Time? What Free Time?
With the extremely demanding schedules of newly-qualified health professionals, it may be close to impossible to find the time to devote to finances and big financial decisions. The day to day and week to week schedules of health professionals change all the time. Especially for dual physician families that have two competing, chaotic work and family schedules.
It can be hard to find the time for finances but it’s also true that finances can’t be ignored. Not only is financial planning for physicians important, it can have huge benefits. It can help to grow wealth, maximize cash flow, secure educational goals for the children, and retirement goals for the future. It’s worth devoting time to. Choosing to enlist the help of a financial planner can help you achieve financial well-being while still finding time to enjoy the things you love.
The Unique Needs of Dual Physician Families
In addition to high debt and demanding schedules, dual physician families can often face higher childcare costs than other professional families. They’ll need someone who can be available to meet their unpredictable schedules, and sometimes this means live-in help.
Even with all the complexities that arise in dual physician households, there are some clear positives. Both parties understand what it’s like being a doctor and what it’s like being married to one. They can bask in the good days and offer comfort during the hard days.
Financial Planning for Physicians: Move Forward with Confidence
Managing finances doesn’t need to be another stresser for dual physician families. At Sea To Peak Advisors, as a fee-only financial planner, I’m dedicated to helping dual physician households create financial plans that help make the most of their lives now and maximize their retirement dreams.
If you are part of a dual physician household and feel you would benefit from my assistance, please get in touch and schedule an appointment.
With best wishes,
Kristi Kearney is an Investment Advisor Representative of Dynamic Wealth Advisors dba Sea To Peak Financial Advisors. All advisory services offered through Dynamic Wealth Advisors. To learn more about Kristi, read more here or connect with her on LinkedIn.