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Monthly Archives: January 2019

Living in Retirement: The Second Leg of the Retirement Journey

We talk a lot about retirement goals, and for good reason. If you have a plan in place, it’s much easier to retire at the age you want. But simply reaching retirement age and retiring is only the first half of it. Living comfortably in retirement is the end goal of saving, and your plan should ensure you reach that goal.

There’s no magic rule for retirement savings, as you may need to save above and beyond the standard 401k/403b and Roth IRA funding. Each individual will have different goals and time horizon, but a good rule of thumb is to plan to save 15-20 percent of your gross income per year to comfortably live in retirement without worry. Again, everyone is different.

It can be beneficial to have a target age in mind when you’re crafting your retirement strategy. Some doctors want to retire as soon as they can; others may enjoy their work and plan to work longer. When you’re choosing a target age, you can then determine the action you need to take now.

If you’re a doctor starting your career, it can benefit your retirement strategy to understand what your monthly cash flow will look like as you’re starting out. It can be quite a shift going from resident to in-practice. If you understand the dollars flowing in and out of your account, you can properly budget for things like loan repayment, risk management costs, and paying off other debts.

If you’re later in your career and you’ve found that your retirement plan isn’t where you’d like it to be, or maybe you got a late start, there are ways to recover. Getting a second opinion from your financial advisor can be key to making corrections to your strategy, including assessing your risk allocation, properly diversifying your investments and reviewing your goals annually.

Regardless of where you’re at with your plan, it’s important to consult with your advisor. Oftentimes, we’ll read financial articles and they could inspire us with false confidence or an overwhelming sense of dread, depending on market shifts. Your advisor can help keep you grounded and sticking to your plan is almost always the best course of action.

Are you on track to live comfortably in retirement?

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.
Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services.  Please consult the appropriate professional regarding your legal or tax planning needs.

The Importance of a Sound Asset Protection Strategy

Let’s say you’ve got your retirement strategy down. You have an idea of how much you’re saving, the ideal age you’re retiring, everything is planned out. Suddenly, you are involved in a fender-bender and suddenly you’re looking at a lawsuit. Are your assets protected, or is there a gap in your insurance coverage?

Accidents can start as small as swerving to avoid a squirrel crossing the road and quickly build to a lot of damage if other cars or pedestrians are involved. In these cases, insurance companies and attorneys could target you, as doctors typically have a variety of assets, whether it’s a savings account, equity in your home or future earning ability.

Regardless of whether you’re covered or not, don’t fall victim to a common mistake: letting your coverage lapse or not updating your plan. As you go through changes in income growth as you progress in your career, make sure you make it a priority to re-evaluate your coverage as you go.

Another good idea is to talk to an agent to discuss total coverage, rather than shopping for coverage at a policy level. Consolidating your coverage with one company can help keep your support consistent and could even save you money.

If you’re worried about your coverage, or need a place to start, consider having a chat with your insurance agent. Talking through your lifestyle and assets can help your agent find the right coverage for you to keep you protected from a broader range of threats. You can also talk to your agent to easily change or update your policies, should your needs change.

Are there gaps in your insurance coverage?

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.

Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

Professional liability services offered through MedInsure Group, LLC, a Larson Financial Group affiliated company.

When Saving for Education, Have You Considered a 529 Plan?

As we enter our careers, we’re bombarded with messages about the importance of retirement savings. And it’s true: retirement is a very important event in your life, and you need to be prepared. There’s another expense that may be worth saving for, however: your children’s education.

Assisting in your child’s education expenses is a decision you (and your spouse or partner) should discuss. It’s crucial to decide a strategy before committing to college savings. Once you do commit, you may want to consider a 529 plan.

Many doctors may overlook a 529 plan because they don’t want money tied down for one specific purpose. A 529 plan is similar to an HSA in that, the money you invest is there for education expenses only. Any withdrawals for other purposes will be taxed as income with an extra 10% penalty tacked on.

An important factor to consider in a 529 plan are the tax advantages. Many stats offer tax benefits for contributions to a 529 plan, including deducting contributions from state income tax or matching grants. In addition, the earnings in a 529 plan grow tax-free.

The most important factor to consider in saving for children’s education is not to prioritize those savings over your own goals. Saving for your own retirement or other long-term goals should take precedence; education savings can be considered extra. It would make sense that a doctor who is well-situated financially would be in a better position to assist his or her child with education expenses.

Are you ready to review choices you have for education savings?

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.

Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.

Are You Properly Managing Your Debt?

Doctors can end up in unique situations regarding their professional lives. They often enter their high-earning years later in their career than other professions and can have much higher student loan debts. Plus, the cost of opening a practice, along with other expenses like homes or vehicles, can really add up to an intimidating amount of debt. The key to debt management is being proactive.

Planning for the debt that you know is incoming, like student loans, can help you get a start on your savings. Something to consider, though, is exactly how concerned are you with debt?

If debt is causing you a lot of stress or keeping you up at night, you may want to pay it down as quickly as possible. If you’re a little more comfortable with the debt you have, you can work with a financial professional to determine the strategy that works best for you.

A common answer to managing debt is to keep a budget. Budgets can be a great way to track your spending and make sure you have enough set aside to pay your bills and cover other necessary expenses each month. However, budgets may not work for everyone and if you have a busy schedule, setting aside time to balance and monitor your budget may be more difficult than creating the budget itself.

For a doctor in that position, a “pay yourself first” approach may be a better alternative. With this method, you set aside an amount of your income—either a percent or flat dollar amount—to save or invest each month. That leaves you free to spend the remainder guilt-free, as you’ve already put money aside to cover yourself.

Another unique angle doctors have is taking advantage of Public Service Loan Forgiveness (PSLF), which is a strategy whereby your student loan debt could be forgiven a period of working for a government or not-for-profit organization.

There are some caveats to this system. There have been efforts to defund or eliminate it completely, though they’ve been unsuccessful so far. If you’re a doctor pursuing PSLF, it could benefit you to begin or continue saving like the program may not exist in the future. Saving as though you’ll have to pay will help you avoid being blindsided, should something happen to the program.

Whether you’re a debt-managing wizard, you need some help or you’re unsure of the resources available to you, we can talk through your financial plan and make sure you’re on track.

Do you want a second opinion on your debt management strategy?

Advisory services offered through Larson Financial Group, LLC, a Registered Investment Advisor.

Securities offered through Larson Financial Securities, LLC, member FINRA/SIPC.

Larson Financial Group, LLC, Larson Financial Securities, LLC and their representatives do not provide legal or tax advice or services. Please consult the appropriate professional regarding your legal or tax planning needs.