You're ready for retirement, but is retirement ready for you? Key concepts for ASC physician owners
However, sometimes this means leaving long-term personal planning in the dust. It takes considerable time and capital to build and operate an ASC, and before too long retirement should be right around the corner, but what if you haven't put much away for your golden years?
Maybe the plan that seemed like plenty when you were right out of medical school now seems like a pittance. Or you've spent a few years just putting in the minimum to get through the recession. Either way, you find yourself behind in saving for the future but that doesn't mean you've lost the chance to build a nest egg. The average retirement savings for physicians older than 66 is between $1 million and $3 million, according to a report from AMA Insurance.
Could that support your lifestyle for a few decades after leaving practice?
That same report shows the biggest concern for around 68 percent of physicians is whether their retirement money will last, followed by how to protect their estate from taxes and managing retirement options. Here are a few quick tips from a Medscape report on how to catch up on your savings:
• Make projections — online or with your financial adviser
• Aggressively increase contributions to live more lavishly after retirement
• Make strategic moves to enhance your stock portfolio — instead of adding risk, get rid of fixed expenses first
• Avoid exotic investments
• Tighten the purse strings for now — eat out less, reign in vacation expenses, etc.
• Find ways to earn money outside of the retirement plan
• Consider having your spouse reenter the workforce
• See a few more patients per day — that'll add up over time
• Offer ancillary services at your practice
ASC investors may also depend on a pay-out when they relinquish ownership. However, the amount depends heavily on the ASC's valuation and a potential acquirer's position. The retiring physician can sell shares to an incoming physician, but the price might be too steep for a single surgeon coming out of fellowship and still strapped with medical school debt. As a result, some surgeons are looking for joint venture opportunities or selling their center to a hospital. (ASC physician succession planning in uncertain times: critical thoughts for the future).
Either way, flexibility is important. Almost as important as getting good advice and following it. Nothing in financial management is a "sure thing," but the experts in the field can really make a difference to maximize savings where it counts. In an article in The Doctor's Journal, Brad Smith reminds his readers to always consider the tax ramifications of their financial moves. He also advises to delay retirement, delay claiming Social Security benefits and build on home equity before making the leap to retired life.
There are also surgeons who are easing their way out of medical practice and the working world. Some slow their practice to half-time while transferring cases to a younger partner. Others sell their practices and surgery centers to become hospital employees for a few years before retiring for good. Another option is to retire from practice medicine but take on executive roles within the medical practice or organization — or vice versa. Some physicians are becoming consultants, teachers or authors in their later years to make a little extra without completely leaving the game.
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