Our local Beacon Pointe advisory team can help you evaluate whether additional time in practice may meaningfully strengthen your financial plan—or whether the wealth you have already built gives you the freedom to choose what comes next. A confidential second opinion can help bring greater clarity to that decision.
Why This Decision Deserves More Attention Than It Receives
Delaying retirement can seem reasonable to many physicians, especially when you’re in your peak earning years and your career is going well. Working for a few more years may feel like the financially responsible thing to do.
But before another year becomes the default, you deserve to know what each additional year actually gives you.
- Does it improve a pension?
- Does it change deferred-comp treatment?
- Does it materially increase sustainable retirement income?
- Does it materially change your ability to help your family?
- Or, given what you’ve already accumulated, does it simply make an already large number larger?
Knowing when work becomes a choice allows you to set a target retirement date—and start working backward from it.
Having a date gives you time to explore teaching, consulting or part-time practice or, when the time comes, to work another year simply because you enjoy it.
But retirement also happens to your family. A target date gives you, and potentially your spouse, time to explore decisions that may have been put on hold: moving, traveling, helping a child buy a first home, caring for an aging parent or creating a family approach to charitable giving.
What many physicians don’t realize is that some financial opportunities require action while you’re still working, and others are better coordinated several years before retirement.
- Your final high-income years while working may be your last opportunity to maximize contributions to employer retirement plans, including catch-up contributions when eligible, and coordinate charitable giving during unusually high-tax years. They’re also the time to understand how deferred compensation, bonuses and other employer benefits will be treated when you leave—and whether decisions made before retirement can improve the timing or tax treatment of future income.
- Your first lower-income years after retirement, before Social Security and required distributions begin, can create an unusually valuable tax-planning window. Roth conversions may allow you to move money from tax-deferred accounts into Roth accounts at potentially lower tax rates. But decisions made before you leave your employer plan, including how after-tax contributions are handled, can affect the flexibility you have to execute that strategy later.
- A portfolio designed to accumulate wealth isn’t necessarily structured to fund retirement. Before your income stops, you may need to determine how much liquidity to hold, where the first several years of spending will come from and how much investment risk you can afford to take. Doing this in advance can reduce the risk of being forced to sell some investments during a market downturn early in retirement.
- Deferred compensation distribution elections may become less flexible as you get closer to retirement.
- Malpractice tail coverage may need to be addressed before your employment ends.
- Healthcare, HSA contributions and Medicare need to be coordinated rather than handled independently.
None of these decisions should determine when you retire. But knowing when you plan to retire gives you time to prepare for decisions you may not even realize are coming—and preserve options that may not be available later.
If you plan to retire in the next several years, do you know what decisions should already be underway?
If you’re not completely sure, consider getting a confidential second opinion. Schedule a time to connect with our team using the form below. To learn more about our wealth planning solutions for medical professionals, click here.
Important Disclosure: Beacon Pointe Advisors does not offer legal or tax advice. Please consult with the appropriate tax or legal professional regarding your circumstances. This information is not intended and should not be relied upon as individualized tax, legal, fiduciary, or investment advice. Only a tax or legal professional may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement any design discussed herein. Nothing herein should be relied upon as personalized investment advice, nor should it be considered an individualized recommendation, offer or solicitation for the purchase or sale of any security or to adopt a specific investment strategy. An investor should consult with their financial professional before making any investment decisions. Beacon Pointe is not responsible for errors or omissions in the material on third-party websites and does not necessarily approve or endorse the information provided.