The Physician's Retirement Plan: Another Look

I’d like to thank all of you for following The Alemian File, and I encourage you to please, keep those emails coming.

The most common email request I get is for more information about the physician’s retirement plan. So, I thought I would provide more information here.

The purpose of the physician’s retirement plan is to provide you with a retirement income to fully support your current lifestyle throughout retirement, without the risk of running out of money.

Let’s start with a different mindset than typical financial planning, because we already know typical financial planning doesn't work. Let’s think like engineers, and engineer a plan that will meet your financial goals. An engineer will tell you, you need a goal, a timeframe, and resources.

First: Your goal is a lifetime, tax-free pension that will fully support your current lifestyle throughout retirement. To estimate how much you'll need to support your current lifestyle throughout retirement, you need to do the following:

1) Add up your monthly bills and multiply that number times 12.

2) Account for inflation and double that number every 21 years

For example: A 49-year-old with $15,000 in monthly living expenses will need about $30,000 in monthly living expenses by age 70 and $45,000 monthly at age 80.

Second: Your timeframe. Decide at what age you wish to retire.

Third: Resources

1) Your retirement savings vehicle will be a permanent life insurance policy. A life insurance agent, using life insurance illustration software, will show you with very good accuracy, how much you need to put into the policy.

2) Funding. To fund the policy you will use money from one or a combination of three possible

resources, bank financing, employer contributions, your own personal contributions.

That’s it. You now have the framework to custom design a retirement plan for you.

If you have questions, send me an email to David@TheAlemianFile.com. Check out my website at PhysiciansRetirementPlan.com. Make sure you come back here next week to Physicians Money Digest for another edition of The Alemian File.