Accept No Less Than a Secure Retirement

Physician's Money DigestJune30 2004
Volume 11
Issue 12

Most physicians look forward to retirement. They envision afternoons on the golf course, vacations in exotic locations, or a new career. No matter how you plan on spending your retirement, you will need to prepare. If you are within 5 to 7 years of retirement, here's what you need to do to ensure that your golden years are golden:

• Make a budget. The budget you create needs to reflect the changing retirement environment and your retirement plans. Separate your expenses into categories. For example, you could divide expenses into taxes, insurance, and standard of living. Once you know what you are spending, you will be able to make necessary adjustments.

• Take a dry run. Consult with your financial advisor and develop a retirement planning analysis. The analysis will be based on such factors as inflation, desired income, Social Security benefits, and the joint life expectancy of you and your spouse. The analysis will tell you if you are on the right track or need to make some adjustments. You may find out that you have to work longer than you originally planned to meet your retirement goals. It's better to err on the side of prudence and overestimate your life expectancy than to underestimate and run out of money. While many planners are using age 95 as a general number, consult the IRS Publication 590 for a more exact figure.


• Review your portfolio. When you retire, you become dependent on your investments instead of your earnings. All investments, including retirement plans, should be reviewed on a regular basis if you plan on successfully meeting your goals. Allocation plays a major role in determining how well you enjoy your golden years. Don't forget to maintain a reserve of approximately 18 to 24 months of living expenses in cash and equivalents (eg, CDs, money market funds, and short-term Treasuries).

• Review your estate plan. Although most people consider investing the engine that powers a successful retirement plan, estate planning also plays an important role. An estate plan will protect your assets during and after your life. Therefore, creating or updating a will that clearly spells out your intentions is a must. All estate planning documents should be tailored so that they are consistent with your distribution objectives and your beneficiary designations. Once you finish your estate planning, let a family member, trusted friend, or confidant know the location of your important documents.

Intentions are always good. Unfortunately, day-to-day life can often cloud the big picture. People don't plan to fail—they fail to plan. Establish a plan and give yourself ample time to complete the plan before you retire. You deserve to enjoy your retirement, but accomplishing this goal requires some thought and planning. Remember that it is never too late to start planning for your retirement. Consulting with a professional is a great place to start if you aren't prepared to ride off into the golden retirement sunset.

William B. Howard, Jr, ChFC,CFP®, is president of William Howard & Co Financial Advisors, Inc, a fee-only investment and financial planning firm in Memphis, Tenn. He has 23 years of experience working with physicians and was named one of the top 150 advisors. He welcomes questions or comments at 901-761-5068 or

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