Building Your Financial Foundation as a Healthcare Professional, Part Two

Part 2: Growing and Protecting Your Wealth as a Healthcare Professional

In Part 1 of our series, Building Your Financial Foundation as a Healthcare Professional, we explored ways to lay your financial groundwork, tackle initial debt, and accelerate wealth accumulation as your career begins to flourish. Now that you’ve established sound financial habits and are building momentum, it’s time to explore strategies for managing increasing financial complexity, protecting your assets, and strategically planning for your long-term goals, including a fulfilling retirement.

Mid-Career: Managing Complexity & Growing Your Wealth

The mid-career stage for healthcare professionals often involves balancing competing priorities. You might be managing a busy practice, raising a family, navigating homeownership, and saving for college simultaneously. This is the time to implement advanced financial strategies that align with your expanding life and professional goals.

Key concerns often arise during this period, such as:

• If I get sued, can my assets be protected? 
• If something happens to me, will my family be okay?

This is where estate planning begins in earnest. Essential documents like a health care power of attorney or living will, durable power of attorney, a will, and a revocable or living trust are vital for ensuring your wishes are carried out and your family is provided for. 

Beyond foundational protections, mid-career professionals should focus on advanced tax strategies and portfolio diversification. Regularly updating your insurance and risk management plans, including umbrella policies and long-term care, ensures comprehensive coverage as your assets grow and responsibilities evolve. 

Pre-Retirement: Preparing for Financial Freedom

As you begin to look toward the end of your active career, the focus of your financial planning shifts from aggressive accumulation to ensuring your retirement readiness and securing long-term financial freedom. Many healthcare professionals ask:

• Can I retire at 65 or earlier and maintain our lifestyle? 
• How can I achieve our dream retirement? 

This stage is where you’ll align your lifestyle goals with your financial capacity, some steps include: 

• Income Projections & Optimization: Projecting your retirement income and expenses, and optimizing your Social Security benefits, are crucial for a clear financial outlook. 
• Tax-Efficient Withdrawal Strategies: Developing strategies to draw income from your various retirement accounts in a tax-efficient manner helps minimize your tax burden in retirement. 
• Scenario Planning: Utilizing scenario planning can be invaluable. For instance, analyzing options such as reducing expenses by $300/month or adjusting retirement age (e.g., retiring at 67 instead of 65) can significantly improve your probability of retirement success. 
• Legacy & Charitable Planning: Reviewing legacy goals and charitable planning also becomes a central part of preparing your estate for future generations. 

Retirement: Protecting What You’ve Built

Reaching retirement is a significant milestone. The financial strategy now centers on creating reliable income streams, preserving your capital, and managing longevity risk. Key considerations in retirement include:

• Creating Reliable Income Streams: This often involves managing Required Minimum Distributions (RMDs) from retirement accounts to ensure consistent income. 
• Ongoing Tax and Healthcare Planning: Understanding Medicare and considering long-term care insurance is essential to proactively manage future healthcare costs and associated taxes. 
• Portfolio Preservation: Implementing strategies to mitigate market volatility and ensure your assets last throughout your retirement is crucial for peace of mind and financial security. 
• Supporting Next-Generation Planning: Through gifting and effective estate execution, you can ensure your legacy continues as you wish. 

Your Partner in Financial Health

Financial planning for healthcare professionals isn’t a one-size-fits-all proposition. That’s why our Healthcare Banking program provides specialized financial solutions tailored specifically for medical professionals at any stage of their careers. 

This program offers a personalized experience with a choice of loans, lines of credit, and deposit accounts uniquely designed for you. Products include specialized loans for medical equipment, practice acquisition, practice expansion, and even mortgage and relocation loans. Contact us to learn more.

Kathy LeClair SVP, Director of Private Banking

Office Phone: 603.640.2689   |   kathy.leclair@ledyard.bank