Are You on Your Way to $5.5 Million?

Physician's Money Digest March31 2005
Volume 12
Issue 6

How much do you need inyour retirement kitty to finance your golden years? It'sa vexing question and onethat most physicians tend to ignore. Forthose doctors curious about whetherthey'll be living on Easy Street or SkidRow when they hang up their stethoscope,it helps to do some basic math.

One rule of thumb is to multiply currentincome by a factor that takes age intoaccount. If you're younger than age 40,multiply by 40; if you're between ages 40and 50, multiply by 30; and multiply by25 if you're over age 50.

Big Numbers

Physician's Money Digest (PMD)


The formula shows that the averagereader(ie, 47 years old and $184,000 in annualincome) will need about $5.5 million.That's if they plan to have the samelifestyle after retirement as in the years justprior to retirement. To live on 80% of pre-retirementincome, doctors will needabout $4.4 million. Although that isn'texactly loose change, the average reader has a head start, with a net worthof $1.1 million. By maxing out on retirementplans, the average reader could be inshouting distance of the goal by age 65.

Although the figures may be daunting,they are a wakeup call to the fact that doctorsmay need to save more aggressively tobe able to finance the retirement they'reworking toward. To run your own numbers,visit the retirement calculator

Carving a Plan

Financial Planning Handbook

for Physicians and Advisors: An Integrated


The stereotype is that doctors are richand savvy. In truth, they mirror society—requiring personal financial direction justlike others. One person who understandsthis need is physician David Marcinko.Seeking to arm today's financiallytroubled doctors with the necessary toolsand knowledge to create a successfulfinancial plan, he has compiled a soundresource, ($54.95; Jones andBartlett Publishers; 2005; 800-832-0034).

To grasp a view of their future, Dr.Marcinko recommends that doctorsdevelop a retirement cash flow plan. "It'sa year-by-year analysis of how all yourlikely decisions will impact yourfinances,"he explains in the book. "Theresult let's you know if what you aredoing will work and how much youshould have accumulated at any time."

Dr. Marcinko, an accomplished guy—has an MD, MBA, and CFP® by his nameand owns a medical business advisoryfirm—says that doctors don't plan for thetransition from work to retirement. Thislapse makes the emotional adjustment toretirement "the most difficult thing"in adoctor's life. That's saying a lot.

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