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FINANCE
A Pre-Retirement Financial Checklist
James Dahle, MD, The White Coat Investor
As doctors enter their 50s and 60s, many start dreaming about retirement; unfortunately, properly planning for retirement requires as much time and effort as planning a career.
Truthfully, the non-financial aspects of retirement are perhaps the most important. Unless your retirement is a “forced retirement” due to disability or job loss, you want to make sure you’re “retiring to” something rather than just “retiring from” something.
Physicians tend to be type A personalities, and don’t rest on their laurels well. Physician identities are also often closely tied to their careers, which further complicates the complete cessation of work. However, in this article, I’m going to be discussing some financial items you probably ought to check
off prior to retiring.
#1 DEBT REDUCTION
There is always a mathematical argument out
there that carrying low or even moderate interest rate debt while investing your money can lead to greater wealth in the long run. However, these arguments usually ignore both the risk of this “investing on margin” and the income requirements necessary to service the debt.
While there may be “good debt” for someone in their 20s and 30s, by the time you are getting close to retirement, there is no good debt. Every bit of debt
you pay off reduces your overall financial risk and the income your assets need to produce to maintain any given retirement lifestyle.
ARE STUDENT LOANS PAID OFF?
I advocate most doctors pay off their student loans within 2 to 5 years of completion of training by living like a resident until loans are gone. Some might consider that extreme, but there is no doubt that it is a terrible idea to carry student loan debt, whether it is your own or that of your children, into retirement.
JUNE/JULY 2021 | WWW.OCMS-MI.ORG
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