The Physician's Guide To Financial Wellness

When it comes to saving and investing for retirement, we all have a certain amount of tax-advantaged saving space available to us through a combination of employer retirement accounts and personal retirement accounts. However, for many physicians there comes a point where you’re maxing out all of these retirement accounts and still have money left over to save and invest, so it’s natural to wonder “What’s next?” in terms of where you should then allocate money. For us, the answer is often a taxable investment account, and in this episode, we explain why. Outline of this episode  What’s the best place to save and invest after Retirement accounts are maxed? [0:23] The drawbacks of taxable accounts [2:35] Why these taxable accounts are preferable to cash or doing nothing [5:44] There are some attractive tax aspects to these accounts [13:01] Legacy planning can be simpler and can save funds with these accounts [19:26] Recap [23:20] What a taxable account is and how it fits as an option For those of you who have maxed out their tax advantage accounts, and we strongly advise maxing out these accounts before using this, a taxable account is the next best option. We'll start out by clarifying the terminology since as with many other areas of personal finance there's no shortage of jargon here. For the purposes of our discussion, we'll refer to it as a taxable account, but you'll also commonly hear it referred to as a brokerage account, a joint account, or an individual account, but it's essentially an account that you can open similar to a bank account. However, unlike a bank account where you earn a set percentage of interest based on the amount of money in the account with a taxable account, you can invest the money in mutual funds, ETFs, stocks, bonds, et cetera, with the expectation that it'll grow over time. These are easy to open and can provide good benefits over time. The drawbacks of taxable accounts  Obviously, you don’t get the tax benefits from these accounts that you would with typical retirement-focused accounts. You’re going to make contributions to these accounts with money that’s already been taxed and you will also pay taxes on the growth of these accounts, over time. There are nuances, including qualified dividends, the interest paid on municipal bonds, and a few others. You can also pay taxes on the gains you make when selling these investments. Money invested here won’t grow as much as you would experience in non-taxable accounts. What you’ll like about taxable accounts You get a higher return on your investments. Not limited to cash, so you can invest with the potential of higher returns. While there is no guarantee that any investment will provide profitable returns, there are historical numbers we can consider. Historically, stock market returns average annual returns of around 10%, while the bond market has historically provided an annual return of around 5%. Historically, inflation has ranged between a 2% to 3% increase, so cash, which historically only provides around a 2% return, doesn’t yield any return when adjusted for inflation. These accounts provide you the opportunity to earn a higher return, but they also provide great flexibility when it comes to your investments, much greater than what you'll experience with tax-favored accounts. You’ll also experience SOME tax benefits in certain situations or with certain types of investments. Resources & People Mentioned Episode #20: The Waterfall of Retirement Savings by Account Episode #45: A Deeper Dive on Roth IRA Conversions Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

When it comes to financial planning, there’s often a fair amount of “low-hanging fruit” in terms of easy ways to save money. In this episode, we discuss seven of these items. Whether it’s parking your cash in a high-yield savings account, shopping around home & auto insurance, harvesting losses in a taxable account, revisiting your life & disability insurance relative to your needs, evaluating your health insurance options versus your usage, rebalancing your investments, or optimizing your credit card benefits, by implementing a few simple tweaks and strategies the cost savings can really add up. Resources & People Mentioned Episode #19: The “Other 20%” of Successful Investing Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

In this episode, we share our list of ten things to do if you’re within ten years of retirement. The list includes taking inventory of your financial situation, reflecting on your current vision of retirement, projecting your future expenses in retirement, understanding your healthcare options, running retirement projections to see where you stand, taking advantage of tax-advantaged retirement accounts and catch-up contributions, revisiting your investment portfolio and asset allocation, checking in with your spouse or partner to see if you’re on the same page, and doing a “trial run” of retirement to see how it feels. We’re big proponents of planning, and the earlier you address some of these things the more time you give yourself to do proactive planning, implement beneficial strategies, and make any necessary adjustments to ensure that your retirement ends up aligning with your ideal vision of it. Resources & People Mentioned Download our guide: Retirement Timeline – Key Dates & Opportunities Download our guide: Retirement Checklist – A Guide to Planning for Retirement  Episode #25: Planning for Healthcare in Retirement  Episode #50: Having a Plan for Long-Term Care Episode #51: Making Sense of Your Retirement Projections Episode #39: Should You Change Your Investments as You Approach Retirement? Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

While it might not seem like it, understanding and contextualizing investment performance can be surprisingly difficult. In this episode, we share our framework for doing just that. We explain what makes up investment performance, how to have proper context around investing, the different ways to calculate investment returns, how to understand whether your investment return is “good” or “bad,” and how to tie it all together to the big picture and what matters for your situation. Resources & People Mentioned Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

In this episode, we tackle the question of whether it’s better to buy or lease when looking to get a new car. We start with a high-level overview, walk through some of the pros and cons of leasing, explain the pros and cons of buying, and based on that discussion tie it all together by sharing our overall thoughts on which option is best for which situations. As with most things in financial planning, there isn’t a universal “black and white” answer since there are both financial and non-financial considerations, but our goal is to help you understand which is right for you based on the specifics of your own situation.  Resources & People Mentioned Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

In this episode, we share our checklist of financial planning items we’ve found helpful to address (or revisit) as you approach the end of the year when managing your finances and looking to optimize the many moving parts. While it’s not an exhaustive list, we cover things such as confirming employer retirement account contributions, making backdoor Roth IRA contributions, confirming 529 plan contributions, checking FSA balances and HSA contributions, reviewing your investments, reviewing your charitable giving, and revisiting your overall goals and life situation. Our aim with this episode is to provide some helpful food for thought as we approach the end of the year.  Resources & People Mentioned Podcast episode #19: The “Other 20%” of Successful Investing   Podcast episode #23: 5 Strategies for Tax-Efficient Charitable Giving Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

Whether it’s a new car in a year, college for the kids in five years, or retirement in 10 years, we all have goals that are important to us. And while being aware of our goals is an important first step, there’s much more that goes into actually planning for and achieving a goal. In this episode, we share a four-step process for saving for any goal. From outlining the goal and its time horizon, to projecting the required savings, to planning and automating those savings and revisiting and adjusting over time, we walk through the entire process from start to finish and share helpful tips along the way.  Resources & People Mentioned Podcast episode #51: Making Sense of Your Retirement Projections Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

As much as we all like to see the stock market go up, periodic pullbacks and bear markets are inevitable. And while these periods don’t feel great for any type of investor, they can be especially stressful if you’re retired and are withdrawing from your investments to fund your lifestyle (what we call your “retirement paycheck”). With that in mind, this episode is dedicated to managing your retirement paycheck during such market declines. There are certain things to do and certain things to avoid doing, so we explain how to approach these periods and not just survive them, but also make the most of them.  Resources & People Mentioned Podcast episode #40: Investing and the “Lifeboat Drill” Podcast episode #51: Making Sense of Your Retirement Projections Podcast episode #45: A Deeper Dive on Roth IRA Conversions  Download our guide: How to Create a Paycheck in Retirement Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

Target date investment funds are an increasingly common option in many employer retirement savings plans (such as 401ks and 403bs). Yet despite their prevalence, not everyone understands exactly what they are and how they work, so this episode is dedicated to a deeper dive. We start out by explaining what target date funds are, switch gears to discussing the pros and cons of them, and finally wrap up by sharing our overall perspective on the people/situations for which they do and don’t make sense. Our goal is to provide a framework for evaluating whether or not target date funds may be right for you. Resources & People Mentioned Podcast episode #3: The 80:20 Rule of Investing Podcast episode #19: The “Other 20%” of Successful Investing Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

While retirement (or financial independence) projections are a cornerstone of any comprehensive financial plan, not everyone understands what goes into them, the different ways to run them, or how to interpret and make sense of the output. In this episode, we start by providing a high-level explanation of retirement projections, then proceed to do a deeper dive touching on these different items. Our goal with this episode is to help you understand the ins and outs of retirement projections so that you can better leverage and interpret them within the context of your own financial plan. Resources & People Mentioned Download our guide: Retirement Timeline – Key Dates & Opportunities Download our guide: Retirement Checklist – A Guide to Planning for Retirement Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

While it’s not the most exciting topic to discuss, long-term care is an important one given how common long-term care events are and their ability to impact a retirement plan due to their potential cost. In this episode, we start out by providing some background and overview of long-term care and some of the numbers around frequency and cost. Based on that, we explain why it’s important to have a plan for how to protect against long-term care risks. We then wrap things up by talking about the different options for how to actually protect against this risk (which at a basic level is either buying insurance, self-insuring, or some combination of the two) and discuss some of the pros and cons of each option. Our goal is for you to come away with a good understanding of this planning area and which approach to protecting against long-term care risk is right for you based on the specifics of your unique situation. Resources & People Mentioned Download our guide: Retirement Timeline – Key Dates & Opportunities Download our guide: Retirement Checklist – A Guide to Planning for Retirement  Genworth long-term care cost calculator   Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

Whether we like it or not, money tends to be an emotional topic and each of us has our own relationship with money based on our personal life experiences. When managing your finances, one of the best things you can do is to minimize the amount of stress that money adds to your life. With that in mind, this episode is dedicated to sharing tips and suggestions for what you can do to improve your relationship with money. We discuss giving yourself a cushion and living within your means, understanding the purpose of money, understanding your personal money script (and that of your spouse or partner), having a money plan that you understand in your own terms, finding the right balance between preparing for the future while enjoying things along the way, and more. Resources & People Mentioned Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

It’s not uncommon to find yourself in a situation where you have a lump sum of cash (from selling a home, an inheritance, savings having built up in the bank, etc.) that you want to invest but are having trouble deciding whether to do it all at once or in a gradual manner. It can be easy to get hung up on this decision, especially if you don’t fully understand the pros and cons and each approach and how they apply to your situation. And in fact, the uncertainty can often become enough of a roadblock that it leads to inaction and that money just sitting there (or even continuing to pile up as you save more). Therefore, this episode is dedicated to sharing some perspective for how to think through the decision and decide which approach is right for you.  Resources & People Mentioned Podcast episode #3: The 80:20 Rule of Investing Podcast episode #19: The “Other 20%” of Successful Investing Podcast episode #30: How to Manage the Emotions of Investing Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

While it’s not always the most exciting topic, estate planning is certainly one of the key areas of financial planning. However, despite its importance, not everyone understands the value of estate planning or its relevance for people beyond just the ultra-wealthy. In this episode, we provide an introduction to estate planning. We cover the basics and key documents involved, explain why estate planning is important, outline the process of actually implementing an estate plan, discuss how estate planning changes over time and when to consider updating your estate plan, and finally wrap up by sharing what to expect when it comes to working with an estate attorney, both in terms of the experience and cost. Resources & People Mentioned Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast

Your tax return contains a ton of valuable information that can be quite helpful with it comes to tax planning and managing your finances. The problem is it’s not the most intuitive document and extracting that valuable information can be difficult to do. In this episode, we walk you through a checklist for reviewing your tax return. We go line by line, explaining the key items, how to find and interpret the useful information, and some of the important things to check on your tax return as they pertain to your overall finances and potential planning opportunities. Our goal is to help you decipher your tax return so you can use and apply the valuable information it contains.  Resources & People Mentioned Podcast Episode #23: 5 Strategies for Tax-Efficient Charitable Giving  Download our guide: The Toolkit for Optimizing Your Finances as an Employed Physician Download our guide: The Financial Checkup Connect With Trent and Andrew https://mdwmllc.com  Follow on LinkedIn Follow on Facebook Subscribe to The Physician’s Guide To Financial Wellness on Apple Podcast, Spotify, and Google Podcast