The independent physician is typically focused on providing value-based care for patients and on running a financially successful practice. Money decisions that an independent physician must make include personal financial considerations that often are neglected, in deference to the need to care for patients and run an efficient practice.
A recent article in Medical Economics suggest several areas for the independent physician to pay attention to when making money decisions:
Student debt. The Association of American Medical Colleges has found that 75% of medical students carry debt related to college and medical school. The median debt for independent physicians is $200,000. Refinancing that debt could help the independent physician save money, depending on the type of loan involved.
Retirement planning. Even the youngest independent physician who may have just launched a practice should start thinking about retirement funds. Putting money into a 401k or 403b can be a smart strategy for preparing for retirement.
Children’s college funds. Independent physicians still paying their own college debts may be challenged with envisioning the need to pay for their children’s education. However, just as with retirement planning, the earlier the parent gets started, the more the child will have available when the time comes to go to college. State-sponsored 529 plans can be a good option for investing for the independent physician’s children’s college funds.
Life and disability insurance. Physicians in independent practices are not able to rely on employers to provide benefits such as life and disability insurance. They should consider investing in insurance policies that will provide coverage if they are not able to work and generate income as well as appropriate life insurance to provide for their families.
Estate planning. Money decisions that affect the independent physician’s family should be made as early as possible. Estate planning includes designating a power of attorney, writing a will, and possibly even establishing a trust.
A professional financial planner or investment advisor can help guide the independent physician in the necessary and appropriate money decisions that will affect the physician’s practice and family, throughout every stage of the independent physician’s career.