Steven E. Leininger

Such a doctor might be in his or her 50s, so busy leading the good life that he or she has given little thought to retirement. Worse is the doctor past 60 who finally realizes that he or she can't keep up this pace forever. Whether a person's financial situation is a result of past mistakes, lack of planning, poor advice, or random misfortune, when crisis has been building for years, it can't be fixed overnight.  

But if any part of the above description applies to you, don't despair. A common-sense dose of reality can bring new hope to a seemingly impossible situation. So here's some advice in the form of seven things to take if you are in financial catch-up mode: 

 No magical investment will resolve the crisis. Savings come only from reducing spending or increasing income.  

Here's an example: For the past decade, Bill and his family have taken an annual, $25,000 European vacation. Doing so required $42,000 pre-tax from his practice, or a gross income (before overhead) of about $100,000. 

One year instead, Bill and his family vacationed locally for $5,000. He took the remaining pre-tax income of $33,000, and contributed it to a retirement plan. In addition, Bill took one less week of vacation and worked instead, netting an additional $10,000 of pre-tax income. In all, Bill "found" $43,000 to fund his retirement.  

 Most of us know the effect of compound interest. The bigger story is compound interest in a tax-deferred environment. For example, $150,000 of annual pre-tax retirement savings earning 6% interest for 10 years grows to nearly $2 million, generating more than $85,000 annually in after-tax income. 

If you had to pay taxes on the money first, and then pay taxes along the way, you would likely have only about $1.1 million, generating only $45,000 in after-tax income. Fortunately, retirement plans such as cash balance and defined benefit plans allow for accelerated, pre-tax funding in the later years of your practice. 

Be flexible about the timing of your retirement.

 Many doctors think they should sell their practices at their peak production to obtain the best value. It's better to think of your practice as an income-generator, not a growth asset. A phased buy-out may make sense. Or just keep working as always, even if your income drops a bit. 

Cut up the credit cards. Pay down or pay off your home equity line of credit and your house mortgage. The less debt you have, the less income you will need in retirement. 

Whether it's a vacation house in the mountains or a vintage automobile in the garage, if it's an unaffordable luxury, it's time to let it go. Find less expensive hobbies and ways to relax. 

 Top athletes, famous actors, and star executives have personal coaches to help them face their challenges. Establish a relationship with an adviser whose only compensation comes from you, with no commissions. Fees should be transparent, and your adviser must adhere to the highest fiduciary standard, which means he or she must place your best interests first. 

If you have been consistently saving for many years, congratulations! If not, don't give up hope. Get your expert team on board and make a workable, practical plan. Then enjoy the ride. The view from the other side is worth the sacrifice. 

The author is a principal and managing partner at Thomas Wirig Doll, a tax, retirement, accounting, and wealth management firm in the San Francisco Bay area. The ideas expressed in this column are his alone and do not represent the views of 

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