1. It’s all about planning
To ensure that their financial situation is in order when they retire, doctors have to start planning their retirement plan at the beginning of their career. The ideal way to start is to put aside 20% to 25% from their salaries for their retirement fund.
2. Spend little, save more
The first rule to saving for retirement is to never be frivolous with your money. After graduating, doctors find themselves with a high-income; and as a result, they start spending more than they should – to make up for the years when they had to sacrifice in order to make it and go through medical school.
3. Go small, not big
Doctors begin their careers with the burden of loans and debts. Hence, spending more when they start earning will slow down the saving-up process for their retirement fund. This includes the option of renting a house, instead of buying it until the big loans are settled; or maybe just buying a smaller house, instead of the one doctors have in mind. Taking control of their financial situation earlier on in their career is the first step towards ensuring their retirement is well taken care of.
4. Engage a financial planner
The best way to go about with this is to have a financial planner create a debt management plan that perfectly blends the payment of loans and saving for retirement. A well-thought debt management plan can help doctors in clearing their debts and increasing their retirement funds.
While a student loan is considered an investment for a doctor’s professional life, saving up for retirement should be seen as doctors investing in themselves and their future.
5. Set up a debt management plan
Sometimes, it seems better to settle the debts and loans first and then focus on saving up for retirement. While the idea is to unload some of the burden, saving up for retirement is just as important as paying off your debts.
6. Engage a financial adviser
To get started on clearing out their debts, doctors have to find a financial adviser who will be able to present them with the ideal loan repayment plan. This way, doctors are paying attention to both debt repayment and their retirement savings. The best way is to start repayment as soon as they start working by settling the highest-interest loans first.
7. Retired lifestyle planning
As soon as doctors find themselves in the middle of their career, they should start thinking about the kind of lifestyle they want to have after they retire and how much they need to have in savings to maintain that lifestyle.
Many doctors might think that they will not need that much money to maintain their lifestyle after retirement because they will not have expenses that are related to work. That is not always the case, as there tend to be other expenses that might materialise when they retire.
8. Aggressive saving
As doctors find themselves near retirement, they also find themselves saving aggressively for it than paying off their loans. It is only when they hit 60 that they should focus on repaying student loans more, instead of saving up for their retirement. Doctors should also learn more about home equity conversion mortgages and its costs to help them pay off their home mortgage.
When retirement comes…
For professionals who have worked around the clock and been busy throughout their career – retirement might hit some doctors hard as they suddenly find themselves with nothing to do day in and day out.
The best way is to plan how they should spend their time after retirement. To avoid boredom and high medical costs, doctors and their partners should focus on doing things that will keep them mentally and physically fit. MIMS
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