Retirement expert David Alemian discusses the first steps in the process of devising and enacting a retirement plan.
A question I often get from physicians and their spouses is: Where do we start? Or, what’s the best way to start saving for retirement? It’s a great question because I want you to start out going in the right direction. Moreover, if you are currently going in the wrong direction, as so many physicians are, the sooner you start going in the right direction, the better.... right?
1) Let’s figure out how much retirement income you will need. Notice I said “retirement income,” not a lump-sum. You want a retirement income for you and your spouse that is guaranteed for your lifetime. You now have your first goal — a lifetime income stream that will fully support you and your spouse. This one simple goal will guarantee that you and your spouse will never run out of money.
2) Decide at what age you would like to retire. You now have your second goal —
a retirement date.
3) You want to use an equity indexed universal life insurance policy as your primary retirement savings vehicle. It will protect you from all seven retirement killers (Taxes, inflation, market losses, major medical illness, death of a breadwinner, late start to saving, and college tuition for your kids).
4) Using insurance illustration software, it is now easy to calculate how much money you’ll want to put into the life insurance policy to reach your two goals of a lifetime income stream and your date of retirement. The amount of money will depend on your age, your health, your retirement date, and the amount of retirement income you want. It could be $3,000 a month, $7,000 a month, $5,000 a month. It could be $50,000 a year, $400,000 dollars a year, or $100,000 a year. It will all depend on you and your particular situation, but at least you will know how much you need to save, so you won’t be guessing.
A plan like this gives you direction, it gives you focus, and it’s easy to get started. It doesn’t require time and energy to maintain like real estate, or stocks, or anything else that has a risk of loss which forces you to keep a constant eye on it. It’s safe and secure and it gets you to where you and your spouse want to go, and that’s the bottom line.
When you build your retirement in this manner, you then can relax and concentrate on the other things in life that are important to you, such as your family, and caring for your patients.
If you have questions, send me an email to David@TheAlemianFile.com. Check out my website PhysiciansRetirementPlan.com and make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.