Create Your Own Reliable Retirement Map

Physician's Money Digest, July15 2003, Volume 10, Issue 13

Given the recent market fluctuations,retirement planning for physicians ismore important than ever. By taking thetime now to develop a plan, you canidentify the steps needed at the variousstages in your life to get your retirementplan on track.

• More than 10 years away fromretirement—You may not be thinkingmuch about your nest egg, but this is thetime to get serious about funding yourretirement. One of the easiest steps totake (if you can) is to use extra cash toboost your retirement savings. If you participatein your employer-sponsored plan,such as a 401(k), consider increasing thepercentage of your contributions.

Another way to help your retirementsavings is by opening an IRA, if you don'talready have one. By funding an IRA (ie,either a Roth IRA or traditional IRA) ontop of your employer-sponsored plan,you'll be able to set aside extra funds.

Reviewing your asset allocation is alsoa good idea. Make sure your portfolio isbalanced and suits your financial needs. Ifthere have been significant changes inyour life recently, you'll want to make surethose are reflected in your asset allocationstrategy. A yearly portfolio review willensure that your finances stay in tunewith your lifestyle.

While you're reviewing your portfolio,take the time to estimate how muchmoney (ie, in terms of income) you'll needat retirement. This way, you can investand allocate your funds accordingly sothat you'll be able to withdraw the incomeyou need to maintain your lifestyleduring your retirement years.

• Ten years or less from retirement—At this stage in your life, you may be eligibleto take advantage of the "catch-up"provisions included in your company sponsoredretirement plan or IRA. Theseprovisions allow you to contribute extramoney to your retirement plan when youreach a certain age (ie, age 50), allowingyou to catch up on any contributions youmay have missed in the past.

At this point, it's also a good idea tolook into planning for long-term careexpenses. Nursing home care or any longtermhealth expenses can quickly depleteyour portfolio, leaving you without a nestegg. Planning for possible long-term careexpenses today will allow your retirementfunds to remain intact.

If you are planning on an early retirement,now is the time to evaluate yourfinancial situation to see if that will stillbe possible. By considering these issuesnow, you may still be able to take theextra steps needed to ensure that yourearly retirement plans stay on track—even if market fluctuations have had aneffect on your portfolio.



• Already retired—Your main concernshould be generating income from yourportfolio to support your lifestyle. If youinvested in a traditional IRA, you mighthave to start taking mandatory distributionssoon—if you haven't already. At thisstage, you also want to remain committedto managing your assets so that you maintaina regular income stream. Review your beneficiary informationto make sure it's correct and workwith your financial advisor if you plan onleaving assets to charity.

Joseph F. Lagowskiis VP investments

and a financial consultant

with A. G. Edwards in

Hillsborough, NJ. He welcomes

questions or comments

at 800-288-0901 or This article

was provided by A. G. Edwards & Sons,

Inc, member SIPC.