Thinking About Retiring? Here Are 4 Challenges You Might Face As a Physician
Ah, retirement. You’ve spent decades saving and planning for this monumental moment. You’re finally ready to say goodbye to the long hours, the insurance battles, and the tedious paperwork. Of course, you’ll miss your patients and the relationships you’ve developed over the years, but it’s time for you to stop taking care of everyone else. Now, you can start focusing on the most important person in your life: yourself.
But before you hit the golf course or sit down with a luxurious stack of novels, there are significant challenges you need to plan for. In general, the issues facing a practicing physician are similar to any business owner. You need to revisit your financial needs analysis, time your transition smoothly, figure out your best strategies for transition, and make plans for how you’ll spend your time in retirement.
Financial Needs Analysis
If it’s been a while since you’ve conducted a financial needs analysis, now is the time to do so. A financial needs analysis will help you determine how much you need to have saved to manage your current and future lifestyle. It’s important to envision the lifestyle you want, and to make sure you have sufficient savings to maintain that lifestyle before leaving your practice.
If your savings isn’t quite adequate, your financial planner can help you strategize what you need to do: whether that’s working a bit longer than you intended or launching a post-retirement, low-stress career, such as teaching part-time at the local community college or finally starting the hobby business you’ve been dreaming about. Conducting a financial needs analysis will give you the peace of mind that you’re on the right track (or help you get back on it).
Timing of Transition
Strategically timing your transition can be tricky and complex, not to mention emotional. You must consider new scenarios, such as bringing in a new associate to take over your practice. Bringing in a new associate can raise a host of questions, such as:
Can your current practice support a new associate?
Will a new associate need to be part-time during your transition?
Does it make sense for a young new physician to work part-time, given their debt obligations?
How will you help your patients transition to a new associate?
Should you enter into an associateship or a partnership?
Questions like these make it clear that when it comes to transitioning out of your practice, there is no one-size-fits-all approach. Your financial planner can help you evaluate different answers to these questions, and make sure that whatever decisions you make align with your financial needs analysis and retirement plan.
Best Strategies for Transition
Not only should you consider the timing of your transition, but also think about different strategies for your transition that ensure you’re making the best choice for you, your practice, and your patients. The questions raised above should be considered if you’re sure you plan to sell your practice to a new associate. But is that always the right choice?
Another strategy gaining prevalence in the healthcare industry is selling your private practice to a larger entity. Oftentimes, a larger health system or hospital will acquire a private practice that they can then use for outpatient services. With rising overhead costs and increasing administrative responsibilities, selling your private practice to a larger entity as you transition into retirement can be very appealing. However, these are not the only two options, and working with a financial planner and tax professional who specializes in working with physicians can give you greater peace of mind that you’re exploring the best options for you.
Plans for Post-Retirement
Finally, it’s important that you design a plan for your post-retirement days. You have spent decades in a busy, intellectually stimulating environment where you routinely engage with patients and their problems. If you don’t have a plan for how you’ll spend your non-working days, you may experience a form of culture shock that can be difficult to process during a transitory period.
As relaxing as it sounds, there’s only so much time you can spend on the golf course or reading in the sun. Everyone needs to feel like they are a relevant, contributing member of society, and at SC Financial Services, we take your transition into retirement seriously. We don’t just care about your financial wellness; we care about your physical and emotional wellness too.
How We Can Help Ease Your Transition
SC Financial Services is a financial advisory firm that’s dedicated to helping you succeed in all periods of financial transition. If you’re nearing retirement age, partner with a financial planning firm that knows the specific challenges you face as a physician. Get started by contacting us at 480-214-9596 or info@scfinancialservices.com.