Thumbs Up: Retirement Secret

Physician's Money Digest, November30 2003, Volume 10, Issue 22


Most physicians know aboutKeoghs, IRAs, and 401(k) plans.But there's another retirement planthat has no limits on the amount youcan put in, lets you trim your taxableincome, and provides creditor-proofasset protection. It's known as a 412(i)plan, a little-known defined-benefitpension plan that can be ideal for doctorswho are within 5 to 10 years ofretirement. A 412(i) plan can provideyou with a guaranteed retirement benefitand, because it's funded by insurancecontracts, it gives you a deathbenefit as well. A 55-year-olddoctor with $200,000 in practice incomewho puts $113,000 into a 412(i)plan reduces their taxable Schedule Cincome to about $80,000, guarantees aretirement nest egg of more than $1million, and protects their family incase of death. The money in the 412(i)plan is also protected from creditors(including successful malpractice litigants)under the Employee RetirementIncome Security Act. For more information,contact Professional BenefitsGroup (866-724-2002;