Why Are Many Physicians Such Poor Planners?

October 16, 2017

As someone who has worked exclusively with physicians over the past nearly 20 years, I continue to be amazed what a wreck most physician personal finances are. Recently a surgeon unexpectedly died of a heart attack; the physician was only in his 40’s. To make a long story short, he left his unemployed wife and two children with basically NOTHING except for the value of his medical practice (which as you can expect declined in value like a rock in water after his death). No life insurance, no savings, a mortgaged up homestead – basically nothing. I also continue to be amazed at how many physicians “have to work.” In other words, they cannot retire when they want to retire. No personal retirement planning at all.

Why is this I often ask myself. As try as I might with my clients, most simply do not have the time to spend on personal financial planning. The result is either no planning at all or “patchwork” financial planning. The end result can be and sometimes is disastrous.

If you are a physician or anyone else for that matter reading this, ask yourself these simple questions:

1. Do I save money each month?

2. Do I contribute money to a retirement plan product each year?

3. Do I have life insurance in place and is it enough?

4. Will I be able to put my kids through college?

5. Do I have a will?

6. Are all my non-exempt assets protected from creditors?

7. How much money will I need to retire on?

8. What happens to my personal finances should I be incapacitated with a disability?

These are just a few of MANY questions and issues that must be addressed by every physician on a personal basis – RIGHT NOW. Remember the old saying: “People don’t plan to fail, they just fail to plan.”

Frankly, I refuse to believe that physicians intend to have the financial misfortunes that may befall on themselves or their families. The problem? The typical physician just doesn’t seem to have the time to devote to mapping out his or her financial future. As a result, matters like the transfer of wealth to heirs, the accumulation of assets, and the enjoyment of assets during retirement can suffer.

Calling All Physicians

As a physician advisor, I’ve heard all of the excuses. “I’m too busy. I can’t take the time now. I don’t want to think about that now. I’m going on vacation. I’m building a new building”…… and so on and so on.

Are physicians really immune to the scenario that I have touched on above? If you think so, please look harder at the facts and remember that we all are part of a financial eco-system that is evolving in ways that we never imagined.

What Must Be Done

If you can’t or won’t do the requisite financial, retirement and estate planning for yourself, admit it now and hire someone who will make it happen. Then make yourself listen. In many instances, it isn’t that a physician needs sophisticated planning – It is just the basics that need to be addressed. As always, physicians won’t be hurt because they’re unable to marshal the resources to get things done. They’ll be hurt because they didn’t take the time.

So I say this to all of you reading this article: STOP THE EXCUSES.

Reed Tinsley, CPA is a Houston-based CPA, Certified Valuation Analyst, and healthcare consultant. He works closely with physicians, medical groups, and other healthcare entities with managed care contracting issues, operational management, strategic planning, and growth strategies. His entire practice is concentrated in the health care industry. Please visit www.rtacpa.com

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