How Physicians Can Plan and Save For Early Retirement
If you’re a physician and are in the early stages of your career, then it’s unlikely you’ll have started to think about retirement yet.
However, in this post, we’re going to demonstrate how ANY physician can plan ahead and save for early retirement. Do so, and not only will you build your wealth portfolio in a structured and upward way, but you’ll also have more control over your career, allowing you to reap the benefits of hard work both now, and later in life.
It’s worth bearing in mind, that while retirement may seem like a lifetime away, the earlier you plan, the more lucrative, and enjoyable your retirement will be, and if you put the work in now, you’ll find yourself able to live out your golden years in the most comfortable way possible.
Let’s look at some of the ways in which you can plan effectively for your retirement:
Save, Save, Save
It sounds like a given, but you’d be surprised how many physicians don’t have an effective saving plan in place, to aid them in later life. One of the biggest mistakes new physicians make is assuming wealth.
Fresh out of school and university, it’s easy for physicians to be overwhelmed by the amount of money they’re earning, and one of the downsides of this is thinking that there’s no immediate rush to begin saving.
However, the earlier you begin saving, the more sturdy your portfolio will look, and you’ll also find yourself able to GROW your wealth if you decide to make investments, like a lot of the smartest physicians, do.
You may find the idea of financial planning a distant one – but it’s worth finding a financial advisor early on – and one you get along with, at that.
A good financial advisor will show you a number of smart investments, usually featuring minimal risk, and he or she will be able to look at your finances, and give you solid estimations of when you’ll be able to retire, from looking at your yearly finances.
Plus, if you’re looking to get a mortgage, and buy your first home, a financial advisor can help you with investments that provide both long, and short-term profits.
This can have a huge impact on your ability to live a happy, stress-free life, and will ensure that you don’t end up running out of money early on into your retirement.
Use an Early Retirement Calculator
Retirement calculators are great, not just for planning your actual retirement – but also because they give you a good indication of how much you should be aiming to put away a month in savings.
Some are complex, and some are simple; it’s worth choosing one of the more advanced ones, as they’ll give you a chance to input a ton of your financial data, giving you a far more accurate, and realistic prediction of both when you can look at retiring, along with the amount you should be looking to put away in order to prepare for that. Click here see an awesome Calculator!
If you’re not happy with the numbers, then talk to your financial advisor. For example, if you need to put away $5K/month to retire at 55, consider how much more a month you need to save in order to retire at 50.
While you can’t predict the future and know exactly when you’re going to retire, it’s beneficial to have some rough ideas, so that you can effectively plan ahead.
Diversify Your Wealth
You’ve almost certainly heard of the term diversity when it comes to finances, and there’s no doubt that it’s one of the most effective ways to both grow your portfolio, alongside protecting it from ruin.
As the old saying goes… you should never put all your eggs in one basket…
And while it may seem tempting to simply save cash into various accounts, doing so will put you at greater risk, should there be financial collapses or recessions, and you’ll also sacrifice the ability to profit.
Some ideas for diversifying your wealth include:
- Stocks and Bonds
- 401 (k)s
- Profit Sharing Plans
- Real Estate
Your financial advisor will give you more details on the specifics of each of the above and will show you which are most suitable for your current situation.
Don’t allow yourself to be pressured into anything, and always take the time to do your research first. (This is why we say find a financial advisor who you can build a relationship with – this will not only ensure you’re getting the best, most transparent advice, but it’ll also make things a lot easier when it comes to actually making investments.)
Don’t Fret About The Future
It can seem daunting thinking about retirement or early retirement- there’s no denying that.
Still, while it’s important to plan ahead and think about what age you want to retire, it’s also important to avoid becoming too caught up in worrying about money.
Life is short, and the most important thing is that you enjoy your good health, and live a life you’re comfortable with.