The Investment Scientist

Posts Tagged ‘physician financial plan

Doctor's Tax Saving

Doctor's Tax Saving

[Adapted from my post for Physicians Practice] Generally speaking, physicians make good money while in practice. Many of them are in the top tax brackets. Upon retirement, however, their earned income often drops to zero. If they can defer some of their compensation to the future, they can effectively move money from the top tax brackets to lower tax brackets.

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Doctors need financial help

Doctors need financial treatment

Physicians have a significantly low propensity to accumulate substantial wealth.” – Thomas Stanley, author of The Millionaire Next Door

How come doctors fail to get rich? I’ve identified six reasons based on observations working with my physician clients.

A late start

By the time doctors finish medical school and residency, they’re typically in their middle or late thirties.  Many have families to feed, and substantial student loans to pay off. It will be years before they can even start accumulating wealth.

Challenging environment

It is increasingly challenging to practice medicine. With the Medicare Trust Fund slated to go bust in 2019, the Center for Medicare and Medicare Service (CMS) is increasingly resorting to cutting physician reimbursements and implementing bundled payments.

Lifestyle expectations

Society expects a doctor to live like a doctor, dress like a doctor, and drive like a doctor. Meeting social expectations can be quite expensive.

Time and energy

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Michael Zhuang is principal of MZ Capital, a fee-only independent advisory firm based in Washington, DC.

Twitter: @mzhuang

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