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Physicians can have a limited understanding of how much they need to save to fund 25 to 30 years of retirement causing them to upend their lives. Sometimes they need a catch-up solution that will let them increase their retirement account balance rapidly.

Solve the Retirement Dilemma with a Cash Balance Plan

Once a novel idea, concierge medicine has now been mainstream for over a decade and is widely accepted by both physicians and patients. Learn how a membership-based model can help improve your independent practice professionally, personally, and financially.

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The time is now for concierge medicine

Remote monitoring holds promise to improve the health of patients and the financial health of physicians’ medical practices.

How does it actually work? Daniel Tashnek, JD, is the author of “2024 Remote patient monitoring guide.” 

Click on the cover of the guide at right to view it as a PDF file.

 His primer on care management programs has definitions, explanations about the four most common patient cohorts that could be covered, and dollars-and-cents examples that physicians can use in their research about adding such services to their practices.

“The goal of this column is to clearly outline the bottom-line benefits and return on investment of creating and implementing a comprehensive care management program given the services available and reimbursement rates in 2024,” he writes.

, a health software company that aims to assist health care organizations deliver compliant, reimbursable services that help patients, but without burdening overworked physicians, other clinicians and staff.

Industry analyst outlines care management programs for physicians.

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Getting paid for remote patient monitoring: How to get started

 dream. Is it sitting on a Caribbean beach, drink in hand, staring out across the water? Is it a house on a mountain overlooking a pristine lake? Or is it traveling to Europe twice a year to the trendiest locations?

Now think about the reality. Can you afford any of that? Or will retirement be living in your existing house without enough money to replace the worn carpet in the bedroom? Will it be continuing to work part time at a job you don’t like because you have no other choice?

To make sure you are choosing from the former and not the latter, financial planners say you need to have a plan that gets you to where you want to be, and the sooner you start, the better.

How much you need to retire depends on what your plans are. A retirement full of European trips is a different financial calculation from one in which you go camping in a state park a couple of times a year. There is no magic retirement number that applies to everyone because it all comes down to spending.

“I get asked all the time, ‘How much money do I need to retire?’” says Joel Greenwald, M.D., C.F.P., wealth adviser, Pine Grove Financial Group. “I don’t know. I have clients that spend $4,000 a month in retirement. They have plenty of money and could spend more. I have clients that spend $20,000 a month in retirement. How much you need all comes down to how much you spend because obviously the person who spends $4,000 a month versus the person who spends $20,000 a month is a different input.”

One simple target physicians can aim for is to save 20% of their gross income. Greenwald says if you can put that 20% in a diversified portfolio, that will help fuel long-term financial growth if you start early in your career.

“If they save more than 20%, they’re going to have the flexibility to cut back or retire early,” Greenwald says. “If they choose to save 15%, that’s fine. Maybe they’re prioritizing current spending, but they’re going to be working more years than their peers. It’s just as simple as that. The people who save 30% to 35% of their income are financially independent earlier and can cut back their [full-time job] earlier. The ones who never listen and are constantly saving 10%, they’re not growing their wealth and they’re going to be stuck working into their 70s.”

You can start calculating how much you will need to 

 by looking at how much you are spending now. Expenses such as life and disability insurance and tuition for your children probably won’t be there when you retire, but an increased travel budget might cancel out those savings. For younger doctors, there may be too many current costs — student loan payments, child tuition payments, day care expenses — to do an accurate forecast, hence the simple 20% saving rule. Once you are in your mid-50s and it becomes clearer what you need month to month, a more accurate forecast can be created.

However, the financials can get complicated because of taxes. Greenwald gives the example of a doctor with $4 million in their portfolio, but it is all in an employer’s pretax retirement plan that gets rolled over to an individual retirement account upon retirement.

“The problem with that is it’s not really $4 million because the government has to get its cut,” says Greenwald.

If the physician needs $6,000 a month for expenses, it may require an additional $1,000 withdrawal to cover taxes. And then if you suddenly need a new roof on the house, a new car, and you decide to take a dream trip to Europe, it might require a $100,000 withdrawal to cover everything for that year. This increase will push you into a higher tax bracket, resulting in even more lost money.

“It’s not only how much money you have when you retire, but that it’s in different tax buckets, and ideally not all of it is in pretax accounts, but again, it all gets back to spending,” says Greenwald.

Jamie Malone, C.F.P., C.P.A, wealth manager, CW Advisors, says he assumes someone will live to be 100 and will need 30 to 35 years of retirement income. By looking at how much a person is spending per month now, and by estimating what they will need in retirement based on the lifestyle they want to live, an overall savings goal can be established. “What we’ve found most helpful is to come up with a game plan and each year check in with how that’s going because life happens, things happen,” says Malone. “With any spending, you have to look at how it impacts the longer term. I don’t know if there is a magical retirement number out there, but there is probably a reasonable range for most people that they would feel comfortable with.”

One thing all physicians can do is to make sure all their investment accounts line up with their strategy and aren’t being ignored, says Malone. “Someone will say, ‘Oh, I have this old 401(k) sitting around that’s invested in bonds or cash that’s been earning nothing for the last 15 years,’” he says, adding that the person missed out on 15 years of compound growth. “That one hurts a little bit because it’s been a long period of time.”

For physicians in their 60s, there’s one strategy that can really help: keep working — at least a little. For example, Greenwald says a 63-year-old physician may be fed up and doesn’t want to work as hard as they have been, but maybe doesn’t have the money to retire yet. One feasible solution is to drop from full-time to half- or three-quarters-time work. “You’ll have more time to do the things you want to do, but keep having an income such that you don’t need to tap your retirement portfolio for another two, three, four or five years. That’s very powerful.”

Even if you have to tap your retirement for $2,000 a month while working to cover the difference, that’s still better than taking out $10,000 a month to cover all expenses, says Greenwald.

Unfortunately, not everyone starts saving for retirement early enough or has the discipline to invest enough income to retire when they want to. One doctor who was in his early 60s came to Greenwald. He was very unhappy and wanted to retire but he had never saved much. “You can run the numbers up, down and sideways; there’s no way he can retire, but he’s really unhappy,” he says. Others have approached him with the attitude that they just need to retire in a few years regardless of financial circumstances. “They think I don’t understand and that they’ve been doing their job for 30 years and just need to be done or that I’m not being fair. Their numbers don’t work, so this idea of
‘I deserve to be done at a certain time’ doesn’t always turn out well.”

Malone says one of the most basic financial tools can help someone now be successful in retirement later.

“This is something that a lot of people don’t do, but even having a simple budget before retirement and using that into retirement — I found that those have been some of the most successful people managing retirement and not feeling like it was a big hurdle,” says Malone. “A budget can help you know what you’re really spending and then trying to align that with what really matters to you with where your money goes. I think for most people, that’s really where the opportunities are: ‘I’m spending money on things that don’t align with what’s most important to me and I’m not even aware of it.’”

A budget helps provide a framework of your spending habits, which can help you calculate how much you need to have saved to retire, says Jeff Pratt, C.F.P, C.R.C, financial adviser, Finity Group.

“Here’s an extreme example: If someone comes to me and says, ‘I want to retire and I only have $250,000,’ on paper, that looks tough,” says Pratt. “But if they only need $1 a month to live on, they’re OK. Someone else might say, ‘I have $5 million invested and it looks pretty good,’ but then they say they need $1 million a month to live on, that’s not going to work. The dollar amount that people think they need to retire is out there, but it’s only as good as what your monthly cash flow needs are.”

Nothing strikes fear into a retiree more than unexpected expenses. Years or even decades of savings can be wiped out without the proper planning to cover unexpected expenses that might come after retirement. Coming from the health care environment, doctors know all too well how a medical emergency can quickly balloon into hundreds of thousands in bills and worry it could wipe out their nest egg.

“A lot of people, even physicians, are worried about this catastrophic health care event that’s going to bankrupt them,” says Greenwald. “But if you have good insurance, which is either through your work or you’re on Medicare with a supplement, health care expenses are pretty predictable. There shouldn’t be a horrible, catastrophic out-of-pocket health care bill for $500,000.”

Health care plans will have a cap on how much you have to pay out of pocket, so that’s a predictable expense. However, there may be bigger threats lurking, such as inflation, that can wreck a poor retirement plan. Recently, 40 years of very low inflation was followed by a spike up to 9%.

This is where Greenwald says a margin of safety in a retirement plan comes in. Retiring at age 65, it’s feasible for either you or your spouse, if not both, to live to be 95. “You don’t want to run a financial plan when you spend your last dollar the day you die or assume everything is going to be great for the next 30 years because there are just too many unknowns,” says Greenwald.

A good plan should take into account that inflation might spike or that some other expense may need to be paid without endangering the overall retirement plan.

A standard financial rule is to have three to six months of cash available while you are working to cover unexpected expenses, but Pratt says retirees should push that to 12 to 24 months for an emergency reserve fund. “That way, in those moments when you have those unexpected things come in, you’ve got that cash cushion built up that you can draw from on a regular basis,” says Pratt.

In some cases, a home equity line of credit might be the best option to pay off a large expense, says Pratt. Even though there would be interest to pay on the loan, it might be a good choice if the only other option was to completely deplete your cash reserves or be forced to sell investments in a down market.

As for inflation, a diversified portfolio can help because stocks are usually a good hedge against inflation. “You don’t want to be in all bonds or all annuities because if you are getting $10,000 a month in annuity payments and inflation goes up, your $10,000 is going to lose its purchasing power pretty quickly,” says Greenwald.

Overlooking inflation and its future effects on your portfolio is one of the biggest mistakes Pratt says he sees people make. “Someone will look at their budget and say, ‘I need $11,000 a month now, and in retirement I’m pretty confident it’ll be $9,000 from an after-tax standpoint,’” says Pratt. “OK, but what is $9,000 a month inflated at 3.25% inflation over X amount of years? When you look at that, you can now start understanding what that means to your portfolio.”

Inflation isn’t all bad, though. Malone points out that when inflation is high, fixed-income investments have a higher yield than when inflation is low, so having a good portfolio mix can help offset some inflation losses.

Regardless of the inflation rate, if you understand your spending habits around your lifestyle now, it can help predict what you need later. Greenwald says you don’t have to plan for major lifestyle upgrades in retirement because people don’t suddenly become different people after they stop working. “If you’re a spender, you’re going to be a spender,” he says. “On the other hand, if you accumulated a lot of money because you weren’t a spender, it’s really hard to get these people to start using it – not just for the sake of using it, but to enjoy their life more.”

No matter your current situation, it’s important to set goals and stay focused on them.

“I would simply impress the importance of not letting the short-term noise of the day, of the week, of the month get in the way of your long-term financial goals, especially around retirement,” says Malone. “Most people are going to be saving little by little, month by month, and I think it’s important to stick to the long-term plan. You want to review it, you want it to be refreshed, it can be revised. But stick with it and do not let the whims of the day affect your actual execution of working toward saving toward your long-term objectives.”

What you need to know to realize your financial dreams

Retirement planning secrets for physicians

In recent history, doctors have been behind 

 and other professions in participating in politics, but physicians who hold elected office say that’s changing.

They also have plenty of advice for their physician peers about getting involved in the political process.

“Try to figure out why you want to run,” said Rep. Ami Bera, M.D. (D-California). “What’s driving you to run? And then think about where you could have most impact.”

“Be clear on your motivations,” said Illinois state Rep. Bill Hauter, M.D. “Do you have something that you want to change? You want that to motivate you because it is service.”

Physicians are respected members of the community, but that’s not enough to win an election. In the fourth quarter of 2022, Public Opinion Strategies researched public perception of physician candidates for the American Medical Association Political Action Committee (AMPAC). The research said: “A physician candidate must be more than just their occupation & work experience. There are clearly elements of being a physician that resonate very well with voters, but just ‘being a doctor’ is not enough.”

AMPAC operates annual Political Education Programs and counts among its “all-stars” Bera and Ken Moore, M.D., the elected mayor of Nashville, Tennessee. The campaign school “will mold you into a winning political strategist and help you elect friends of medicine,” by using a simulated campaign for the U.S. House of Representatives. AMPAC also has published its doctors-as-candidates research online.

Shadow legislators to build relationships and get a feel for what their lives are really like. “That’s good advice for any physicians, whether you’re going to run for office or not,” said Oregon state Sen. Elizabeth Steiner, M.D., who now is running for state treasurer. “Most legislators don’t know much about health care and they really value having a couple of physicians who are their constituents to talk with them about the issues that they’re seeing on a day-to-day basis.”

Start locally, like the town council or school board

But understand: “They’re tough jobs because they’re very personal,” said Hauter, who first was elected to his county’s governing board. “People know you, know your kids. And on a school board level, you’re dealing with people’s children. It can be a really tough job, but it’s a way to start seeing how it is, and not only be elected to office, but to interact with other elected officials on how decisions are made, and to ask questions and to see what it takes.”

Physicians firstly should run their practices and do the best job they can for their 

, then make time for political activities, said Rep. Michael C. Burgess, M.D. (R-Texas), now the longest tenured physician in Congress. “Carve out some extra time for some public service-related activities, doesn’t have to be running for Congress, but school board, city council,” he said. “Make sure you’re active. Make sure you attend political meetings, so people in political spheres know you and begin to build it that way.”

Minnesota state Sen. Alice Mann, M.D., M.P.H., first ran for the Minnesota House of Representatives and won. Then she had to show up at the capitol. “I thought, I’m going to be the dumbest person in the room. I don’t know how to write a law, I don’t know how a bill becomes a law in this state, I don’t know anything,” she said. “And when I got to that stage, I quickly realized that everyone is in the same boat as I was. We have carpenters and car salesmen and therapists and social workers and shoe store owners all now in the same space, and we’re all talking about ideas and writing laws together, so there’s nothing to be afraid of.”

No one likes to lose, and in contested races, voters pick just one winner. Even the winners have to compromise. “Being a legislator requires a lot of patience and a lot of tenacity and you have to be prepared to be disappointed a lot,” Steiner said. “It’s a good day if you get 75% of what you’re asking for, what you’re hoping to get, and most of the time you don’t even get that. So, there’s frustration and you have to be prepared to deal with that.”

“Politics is not nasty,” Moore said, in spite of a fall 2023 campaign that drew national attention because of attacks from a challenger. “It may appear to be nasty on the surface, but it’s an important function for all of us in a democracy to participate. And in the past, too few physicians have participated in that process of helping elect leaders and also being a leader.”

Campaigning and serving in office are very different jobs.Lawmakers can make a deep dive on issues. Doctors as candidates must make their messages smart but short. “We condense a chapter in a textbook into a conversation with a patient,” said Rep. Kim Schrier, M.D. (D-Washington). “That’s kind of what you need to do, is take a bunch of knowledge and condense it into a bumper sticker instead of a detailed explanation, and you need to be able to communicate that through social media, TV, mail, et cetera.”

Schrier said in her first campaign, the prospect of debating an experienced candidate on television “just inspired sheer panic.” “Somebody told me this along the way, and it has absolutely proven true, that you learn, and you grow a lot when you try new things. Frankly, at the end of that campaign, whether I had won or lost, I would have liked myself better for having tried, learned these new skills, really stretched, been brave.”

Doctors don’t need a government title to lead, so if you choose not to run, or run and lose, lead anyway. “You already have the biggest title that you will get. And don’t forget the power behind the title, and that is the title of being a doctor,” said California Assemblymember Jasmeet Bains, M.D. “That title is what you need to lead your community. So do it and lead your community. Get involved in your local government. Show up. Make sure people understand the health outcomes, because when we don’t show up and educate them, there’s a lot of myths that are created because of our absence.”

Here’s what to know if you want to run for a government position

Thinking about running for office?

Physicians who run for elected office say they’re proud to serve patients in ways that go beyond the individual contacts in the examination room. This fall, doctors will appear on the ballot with other political candidates seeking public office. They are a small group relative to the total number of physicians or elected leaders in the nation. However, they said their experiences in medicine are great preparation for serving in office, and they spoke to 

about the process of campaigning and why more doctors need to get involved in politics.

 in the first 100 years of the United States, but that has waned over time. Physicians have always been involved in politics, but lawyers have dominated Congress since 1960, which was the start of Medicare, Medicaid and federal participation in health care payment and policy, according to “Is There a Doctor in the House? … Or the Senate? Physicians in U.S. Congress, 1960-2004,” a 2004 study by Chadd K. Kraus, D.O. , Dr.PH., M.P.H., and Thomas A. Suarez, M.D.

As of July 2022, there were 17 federal physician-legislators making up 3.1% of 541 members of Congress; at the state level, 86 physicians made up 1.1% of the population among 7,552 lawmakers. Doctors were 0.3% of the American population then, so, numerically, physicians were overrepresented in federal and state legislatures, according to a 2022 study by Tanvee Varma, M.D., and Matthew Goldenberg, M.D., MS.c.

Physicians may be overrepresented in Oregon, where state Sen. Elizabeth Steiner, M.D., is running for state treasurer. Her current state Senate district encompasses two state House districts, both represented by physicians: state Rep. Lisa Reynolds, M.D., a pediatrician who is seeking reelection; and state Rep. Maxine Dexter, M.D., a pulmonologist who is seeking election to the U.S. House of Representatives. “We have quite the gamut, but mostly primary care,” said Steiner said.

In contrast, in 2022, when Bill Hauter, M.D., emergency and anesthesiology specialist, won his seat in the Illinois House of Representatives, he was the first physician elected to that chamber in 30 years.

Why don’t more doctors get involved in 

? Largely because of a lack of time and money, according to lawmakers. Medical school, residencies and fellowships last for years in a period of life when new physicians also may be starting families, practices or both, which are all huge commitments. For newer or established doctors — whether employed or in independent practice — the hours are long.

“The practice of medicine doesn’t offer a lot of spare time. It’s an occupation that robs a lot of your time away from your family and other things that probably would be important to be involved with,” said Ken Moore, M.D., elected mayor of Franklin, Tennessee. “So they guard that free time pretty hard.”

Medical school also costs a lot of money, and doctors have to repay those debts. They generally earn more than elected officials. Most members of Congress earn $174,000 a year, with more for leadership roles. Legislators in California and New York earn six-figure salaries, but some states pay much less, and local positions such as city councils or school boards may have minimal or no pay.

“My running joke is that I get paid $32,000 a year to run the $33-billion biennial budget. But that’s OK,” said Steiner, who has become one of her state’s spending experts.

Attitude can also be a factor. “I think sometimes [some physicians] think it’s below them to be involved in politics,” Moore said.

Regardless of history or contemporary influences, the physicians agreed that more doctors need to be involved in politics. Health care is a huge part of the U.S. economy, and it is intensely personal to every American — whether they vote or not and whether they are in good health or not. It is intensely public, as evidenced by the COVID-19 pandemic. It is also governed by lots of “well-meaning, very smart people,” who are not physicians, Hauter said. “They don’t understand the reality of medicine,” he continued. “A lot of their prescriptions or solutions are not going to work in the real world of medicine.”

“We have to certainly be more involved, because medicine and politics are completely intertwined now,” said Minnesota state Sen. Alice Mann, M.D., M.P.H. “They are one and the same. The care I provide for my patients has a direct correlation to what’s going on in local and federal politics. People who have never touched a patient … are making laws about how I practice medicine. If we don’t become more involved, the system is just going to get worse and worse.”

The physician lawmakers agreed that doctors have the potential to make competent elected leaders because of their medical training. “I’ll tell you this, and people don’t normally think about it: You’re a doctor, you’re in your lane. Political office is in another lane over here, and the two really don’t intersect. But, in fact, they do,” said Rep. Michael C. Burgess, M.D. (R-Texas), who is now the longest-tenured physician in Congress.

A skill that physicians and lawmakers have in common is being able to sift through large volumes of information, understanding it quickly and then asking the critical questions. “Preparing for a committee hearing is like an all-nighter before a major midterm exam in medical school,” Burgess said.

Understanding the process of campaigning and why more doctors need to get involved in politics.

Barbara Lewis

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