There’s some real good news in this post, even if it’s slightly anecdotal. We set out to find out what a doctor should do if they have saved little or nothing for retirement and are nearing retirement age. To get answers, we turned to W. Ben Utley of Physician Family Financial Advisors. According to Utley, he has almost never seen a doctor with no retirement savings. Based on his experience, it would seem that doctors are doing their due diligence when it comes to saving. However, Utley points out that a doctor who didn’t care about their retirement likely wouldn’t be talking to a financial planner, anyway. With that in mind, there are likely a few doctors in our audience with nothing saved or who have under-saved. Keep in mind, there are no catch-all, universal retirement solutions. Retirement works on a case-by-case basis, which is why it helps to work with a professional. But there are a few general principles you can follow. Here’s what you should do and be thinking about if you’re in this situation, according to Utley. Physician Sense: How late is too late for doctors to start saving for retirement? Ben Utley: How late is too late? I can answer that so many different ways. Well, I guess the easiest answer to this is, if you can live on social security, it's never too late. That's the latest you can be. PS: But how likely is it that a doctor with a typical doctor's lifestyle could live on social security? BU: Very low, especially one who has consumed all of their resources as they've gone along. That has to be like putting the world’s biggest genie back into the tiniest bottle. PS: How can doctors get back on track with their retirement savings? BU: There’s the possibility of making catch-up contributions to your retirement account. It means contributing an extra extra thousand dollars per year to a traditional IRA, or to a Roth IRA. Or, a catch-up contribution of $6,000 into your 401K or 403B for people who will turn 50 sometime this year. Making lifestyle adjustments PS: What if that’s not enough? Is it then time to start making lifestyle adjustments, like selling cars or houses? Is that something a financial advisor will coach a client through? BU: That's exactly right. Typically getting rid of personal property is not going to solve the problem because there's only so many cars and planes that a person typically has. And as expensive as cars and planes are, they're typically not millions of dollars worth of property. It takes millions of dollars to be able to retire properly. I once had a prospective client call me who said he was late to the game. He told me he had purchased a house with an elevator in it in Oregon. I asked him, ‘Did you consider moving to Missouri? In Missouri, the cost of that same home is $120,000-$150,000 less.’ Housing costs tend to compete with retirement and sometimes relocating is the best strategy. If you don’t have enough money to retire on the West Coast, you’re not going to be able to make it on the East Coast. But you can probably make it in the heartland. Source
