No matter how well we plan things out, financial problems can arise at any time in our lives. One day you’re rich and the next you’re living in poverty. Retiring poor is a real possibility, even medical professional.
In this post I’ll discuss ways to avoid retiring poor as a medical professional.
Avoiding Retiring Poor
Planning is the best way to avoid a retirement spent in poverty. And planning doesn’t have to be complicated.
Retirement requires some foresight and only has a few moving parts. The problem is that poverty is the norm and without taking proper steps to protect against it, chances of it remain high.
You won’t hear about the doctors who retire in poverty. They don’t start blogs. They don’t get interviewed on TV. They slowly cachex into the background which makes us less vigilant of it.
1. Save Consistently
Even if you aren’t making a lot of money, setting a few hundred dollars away every month will make a huge difference. It doesn’t have to be a retirement account. A simple savings account or brokerage account will do.
It’s more important to have savings than it is to be debt free.
2. Don’t Raid Your Savings
Money that you’re setting aside for your future should never be accessed prematurely. I’m referring to 401k’s and IRA’s and other retirement accounts.
If you have to take out a loan, do it. If you need to borrow money from family, do that. But raid your retirement once and it’ll become a terrible habit.
3. Rely on Yourself
Don’t rely on an inheritance from your parents. If it happens, then great. But depending on an inheritance in anything less than a secure trust could backfire.
Relying on yourself also means not relying on your significant other. This is especially true for women. Avoid relying on your partner’s income or trust that your partner will make sound financial decisions for the both of you.
4. Minimize Risk
Everything you own should be protected. I’m referring to basic things like disability insurance and liability insurance. If you’re a single doctor and don’t have anyone else you can partially rely on, being without disability insurance is a major risk.
Insurance can be a great way to minimize risk. But you also need to minimize risk by adjusting the way you practice medicine or run your business (real estate, private practice).
Finally, minimizing the risk in your investment portfolio is equally important. You need some risk to earn decent returns. But you can expose yourself to unnecessary and excess risk.
5. Look Ahead
By looking ahead I am referring to anticipating changes in your life and planning for them. If you’re burning out, don’t just stand there and watch your career get flushed down the shitter.
If a loved one will have high medical expenses then try to anticipate this and plan for it. Even a bit of planning can set you up nicely to not have to raid your savings.
6. Avoid Common Disasters
For medical professional the common disasters are substance addiction, humping your patients, divorces, and risky investments.
Nobody thinks they’ll get divorced. Nobody thinks they’ll lose out on a risky investment. And few think that a patient relationship will blow up in their face.
The more complex your lifestyle is, the more money you need to run your household budget. The more things you have to juggle, the easier it is for you to get wiped out.
There is a lot of pleasure in simplifying your life and you’ll need to plan a lot less if your life is less complex. And should your life suddenly get a little more expensive due to rising HOA dues, for example, you can easily absorb them.