Common and Expensive Physician Retirement Planning Mistakes

February 07, 2015

In the “Physicians Practice” article published 8/25/2014, Steven Podnos highlights the six most common and expensive retirement mistakes by physicians:

Mistake # 1 – Investing in Insurance or Brokerage-based Retirement Plans

  • Often includes a lot of expenses
  • Many fund options available, but typically are poor performing for their cost
  • Inflexible plans especially for employees

Mistake # 2 – Not working with a third-party administrator and not using a customized plan

  • Customized plans tend to have controlled costs, better planning process and better choices

Mistake # 3 – Not starting retirement plan early enough

  • Gain powerful tax advantages by starting retirement early
  • Deducting contributions when your taxes are high, thus take out distributions later at a lower tax bracket

Mistake # 4 – If you are older than 45 and in an independent practice, Not using a defined benefit plan

  • Defined benefit plans allow for six-figure contributions in addition to traditional contribution plans like 401k

Mistake # 5 – If you have employees, using a SEP IRA instead of a 401k

  • 401k almost always allows for higher contributions with lower employee cost

Mistake # 6 – During high income years, converting to a Roth IRA or funding a Roth 401k

  • Although Roth vehicles have some advantages, when you are at a higher tax bracket and making after tax conversions to a Roth IRA or Roth 401k, you are not taking advantage of tax-deferred earnings

Read the entire article at “Physicians Practice”: