Retirement Planning for Young Physicians
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After faithfully maximizing the investments in your 401(k)/403(b) for 35 years, including the “catch up”, you will have now accumulated about $2,873,370 ($2,738,067 +$135,303) for retirement. William Bengen determined in the early 90’s that a 4% yearly withdrawal from a retirement fund allowed it to continue regular payments for at least 30 years without loss of benefits. Withdrawal of a greater percentage increased the chance that your retirement assets wouldn’t last 30 years. It is assumed that many of us will live into our 90’s so it is highly desirable that our retirement funds last that long. This 4% withdrawal rate has recently been called to question due to the current low interest rate environment. It’s possible retirement fund withdrawals in the future may need to be recalculated lower. Sadly, 4% of $2,873,370 is only about $115,000. Will you be able to live on that 35 years from now? Assuming a 3.2 inflation rate for the last century and extrapolating that to the future, $115,000 will be worth approximately $38,000 in todays money.
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About the Book
Most doctors beginning their medical careers won’t have the luxury of selling a practice, office building or an associated business to fund their retirements. Instead, they’ll be retiring as employees of large groups or hospital systems.
Making matters worse: Wages are expected to be flat for the foreseeable future, and retirement plans being offered by employers are nowhere near adequate.
Dr. Ralph P. Crew offers practical strategies for new physicians in this guidebook for navigating whirlwinds of change. Learn how to
- determine how much to save to live comfortably after retiring;
- navigate defined contribution and defined benefit plans;
- assess the risks of inflation to your salary and savings;
- take advantage of having access to a 457 plan; and
- prepare for worst-case scenarios.
In the past, physicians could accumulate wealth without great effort, but younger physicians will have to plan ahead and think hard about lifestyle decisions to ensure they can live comfortably in retirement.
Filled with examples, easy-to-understand math, and up-to-date data, this informative and useful guide will help you take the right steps to ensure a secure retirement.
About the Author
Dr. Ralph P. Crew has been an ophthalmologist, emergency room physician, and general practitioner. He has been intimately involved with medical education for the past thirty years and is a clinical professor at Michigan State University. He retired from his practice in 2016 and dedicates his time to teaching residents and medical students. This is his first book.