Physician Cents

Financial planning is never one-size-fits-all, especially for high-income professionals like physicians. Thinking about minimum distributions (RMDs) or optimizing withdrawal strategies in the years leading up to retirement requires intentionality and foresight. In this episode of the Physician Cents Podcast, we explore the "pre-retirement playbook"—the top five financial moves every individual should consider before leaving full-time work.      Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.   You will want to hear this episode if you are interested in...   04:07 Understanding Required Minimum Distributions (RMDs) 09:48 Importance of taking professional advice 16:08 Discussing DIY financial planning risks 19:36 Managing taxes for Roth conversions 22:03 Year-end tax planning strategies 25:47 Planning your retirement investment strategy 27:05 Balancing assets in retirement accounts 30:25 Discussing your legacy planning 1. Personalized Projections & RMD Modeling   One of the most critical pre-retirement moves is running detailed, personalized projections. RMDs, or required minimum distributions, are mandatory withdrawals the IRS requires from pre-tax retirement accounts (think traditional IRAs, rollover IRAs, 401(k)s, 403(b)s, and 457s) starting at age 75. The rationale is simple: the IRS wants its cut of deferred taxes.   The size of your RMD is based on two factors: your age and the total value of your pre-tax assets. The higher those numbers, the greater your required distribution—and potential tax bill. If you've spent your career diligently saving in pre-tax vehicles to mitigate high tax brackets, you may find yourself facing a tax bomb in retirement.  2. Strategic Roth Conversions   Roth conversions are a powerful tool to minimize future RMDs and manage your overall tax liability. Essentially, a Roth conversion involves transferring assets from a pre-tax account to a Roth IRA, triggering a taxable event in the year of the conversion. The strategy here is all about timing: converting during lower-income years (such as the early retirement window before RMDs begin) can allow you to "fill up" lower income brackets, paying less in taxes than you might later.   Roth conversions offer flexibility, but they require diligent tax planning. Conversions increase your taxable income for the year and can impact other financial aspects, such as triggering higher Medicare premiums (IRMAA).    3. Building Flexibility Buckets   A robust retirement strategy is all about flexibility. That means building savings across three key "buckets": pre-tax, Roth, and taxable (non-retirement) accounts.   The idea is to avoid tapping your pre-tax or Roth IRAs (thus compounding your tax issues) and instead use the liquidity in your taxable bucket to pay any resulting taxes without disrupting your growth strategies. Tax loss harvesting and careful management of capital gains further enhance this flexibility.   4. Optimizing Withdrawal Sequencing & Account Drawdown   Withdrawal sequencing—the order and timing in which you tap your assets—can significantly affect the sustainability of your nest egg. The strategy typically uses the safest assets (cash or short-term bonds) to fund the first few years of retirement, protecting against market downturns ("sequence of returns risk"). These "buckets" are gradually refilled and re-risked as you progress through retirement.   Selecting which accounts to draw from first—whether taxable, pre-tax, or Roth—depends on your unique situation, tax rates, and estate planning goals. A well-structured drawdown plan navigates both income needs and tax efficiency, protecting your wealth for decades (and your heirs).   5. Updating Legal, Insurance, and Legacy Plans   No pre-retirement checklist is complete without reviewing your legal documents, insurance coverage, healthcare directives, and legacy plans. This includes updating wills, beneficiary designations, powers of attorney, and ensuring your insurance and long-term care strategies align with your retirement horizon and family needs. The Bottom Line   Retirement planning is about optimizing how and when you use your assets, minimizing taxes, and preserving flexibility. Whether you're in the early, mid, or late stages of your career, using this pre-retirement playbook can mean the difference between anxiety and confidence in your financial future. Consider partnering with a professional to ensure your plan is as strong and dynamic as you are. The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.   Connect With Physician Cents   WealthKeel LLC Olson Consulting LLC Tyler Olson on Twitter Chad Chubb, CFP®, CSLP® on Twitter   Subscribe to Physician Cents Apple Podcasts   Audio Production and Show Notes by - PODCAST FAST TRACK  

In this special mailbag episode, we dig into the concept of "Coast FIRE"—a financial strategy where you save aggressively early, then allow your investments to grow on their own while you step back from intense saving. We explain what it means to buy back time and how to maximize your savings.    Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.   You will want to hear this episode if you are interested in... 03:26 Your early retirement planning strategy 06:37 A few concerns about retiring early 11:25 Navigating your financial independence choices 15:48 Accessing funds before retirement age 18:31 Outsourcing tasks and enjoying life 26:01 Discussing Roth 401(k) and tax planning 27:11 How to understand Coast FIRE as a physician Understanding Coast FIRE  Coast FIRE is a financial strategy where you save and invest substantially during your early working years, accumulating enough assets so that, by a certain point, compounding growth alone is expected to fund your retirement. Once you "hit your number," you can stop making hefty retirement contributions and let your investments do the heavy lifting—coasting into financial independence without additional savings pressure. With this approach, mid-career physicians are no longer bound to maximize 401(k), 403(b), or Roth IRA contributions if they don't want to. Instead, the focus shifts to maintaining lifestyle and exploring options like reducing income or reallocating time to non-work priorities. While FIRE (Financial Independence, Retire Early) is a popular acronym, the real value is in the "FI"—making work optional, rather than strictly retiring early. For most physicians, a late career start and a drive to stay productive means traditional retirement at 45 can be unrealistic or undesirable. What matters is obtaining the optionality that financial independence provides.   Buying Back Time: The Soft Side of Money The most rewarding aspect of Coast FIRE is the ability to "buy back time," shifting away from relentless work toward pursuits that enrich life. This can mean reducing work hours (going to 0.8 or 0.6 FTE), outsourcing tasks at home (like lawn care or cleaning), or investing in meaningful family activities and hobbies. We recommend cultivating interests outside medicine and prioritizing pastimes now, so the transition to a less work-centric lifestyle feels natural when the time comes. Hobbies, travel, or spending lots of time with family can all become focal points. Practical Tax Strategy Overreliance on pre-tax retirement accounts has a potential downside—the substantial future required minimum distributions (RMDs) and tax headaches. Diversifying into taxable accounts provides both flexibility for early withdrawal and potential relief from future tax bombs. Roth conversions can be powerful, especially if timed well after market downturns, allowing for tax-free growth on a depressed portfolio. But as with all planning, a personalized approach tailored to your specific circumstances beats one-size-fits-all rules. Use frameworks like Coast FIRE as inspiration, not rigid templates. Build a financial plan rooted in your values, personal goals, and family needs. Enjoy today while planning for tomorrow, and don't let oversimplified labels define your path. The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers. Connect With Physician Cents WealthKeel LLC Olson Consulting LLC Tyler Olson on Twitter Chad Chubb, CFP®, CSLP® on Twitter   Subscribe to Physician Cents Apple Podcasts   Audio Production and Show Notes by - PODCAST FAST TRACK  

In the latest episode of the Physician Sense Podcast, we take listeners behind the curtain of a physician-teacher household with an annual income of $500,000. At first glance, this kind of income might sound like the ticket to unlimited financial freedom. But even with a hefty paycheck, many feel they're just barely keeping up. Here's what we uncovered—and what professionals in similar positions can learn from it.   Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients. You will want to hear this episode if you are interested in...   00:00 Exploring finance Reddit threads 03:28 The illusion of endless income 08:45 Balancing finances and lifestyle choices 09:54 Discussing household budget balance 15:01 Fair pay for household services 16:45 Sharing high-income budgeting ideas The Surprising Reality is That $500,000 Doesn't Feel Limitless   Even a household earning $500,000 can still feel like they're living paycheck to paycheck. This is especially relevant for medical professionals and dual-income families who see taxes, debt, and lifestyle costs eat away at what appears—on paper—to be a substantial income.   So, how does a $500,000 budget get allocated?    Taxes: Roughly $110,000, or a bit over 20% Mortgage/Property Taxes: Around 11-12% (outside a high cost-of-living metro) Student Loans: 8% of income, or $40,000 per year, likely split between the physician and their spouse Car Payments/Expenses: About 6%, or $30,000 annually—even without luxury cars, this can add up with insurance and lease payments. The Lifestyle Factor   Much of the online Reddit commentary about the household budget focused on spending for food, vacations, and daycare—which together made up 24% of income. Drill down, and you get $20,000 a year for groceries and $30,000 for restaurants. While this is a 50/50 split between eating in and out, for a busy medical family, convenience becomes a critical factor—and that comes with a cost.   Redditors also discuss how much they spend on childcare, which takes up another $36,000 annually, and children's activities or education funds (such as 529s) together add up to about 10% of the overall budget. Vacations then come in at $35,000—a number that surprised us only for how reasonable it seemed given the rest of the budget.  Scarcity Mindset Can Be Healthy   Despite the "paycheck to paycheck" feeling, this Reddit thread demonstrates a well-constructed financial plan. Maintaining a bit of a scarcity mindset can be protective, helping prevent lifestyle creep from undoing long-term savings goals. For physicians or any high-earning professionals, the real lesson is about proactive management, intentional spending, and building systems that automate what matters. Even if the big numbers don't always feel big enough, clarity—and a little moderation—can go a long way. The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.   Resources & People Mentioned   This is the Reddit story we're referring to: https://www.reddit.com/r/Salary/comments/1lcw4c8/personal_finances_making_500k/    Connect With Physician Cents   WealthKeel LLC Olson Consulting LLC Tyler Olson on Twitter Chad Chubb, CFP®, CSLP® on Twitter   Subscribe to Physician Cents Apple Podcasts   Audio Production and Show Notes by - PODCAST FAST TRACK  

Buying your first home is a momentous occasion, especially for physicians who've spent years on the move during medical training. But beyond the excitement lies a whole host of financial surprises that can turn homeownership from a joyful milestone into a source of stress, unless you know what to expect and plan accordingly. In this episode, we discuss the often-overlooked costs, share some real-life stories, and give you a few practical strategies to help you get ready to become a homeowner.   Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.   You will want to hear this episode if you are interested in...   [04:03] Planning for home buying expenses [07:31] Discussing physician mortgages [10:33] Concerns about rising HOA fees [14:43] Unexpected expenses after home purchase [21:45] Budgeting for home maintenance [23:14] Advice for first-time home buyers   Closing Costs & Upfront Fees One of the earliest and most substantial financial shocks for first-time homebuyers is the closing costs and upfront fees. So often people focus solely on the purchase price and down payment, but in reality, acquiring a home involves a variety of other fees—including appraisal, inspections, title insurance, recording fees, attorney fees, and prepaid property taxes. A rule of thumb is to plan for about 3% of the purchase price for closing costs. For instance, on a $500,000 home, that's $15,000 just to close the deal. And while physician loans are attractive for their low or zero down payment features, you still need to bring a significant amount of cash to the table for these fees—rolling closing costs into your loan only increases your debt and the interest you'll owe. Post-Closing Immediate Costs: Furniture, Fixes, and Fees The expenses don't stop once the keys are in your hand. Moving into a new home brings another round of costs—some mandatory, others optional. Typical immediate purchases and outlays include:   Changing locks for security Deep cleaning the property Early lease termination fees if you're moving out of a rental before your lease ends Major furniture purchases and household goods Initial DIY adventures at home improvement stores—paint, window coverings, light fixtures, and small repairs   First-time homeowners often underestimate these "little things," but collectively, they can easily tally into the thousands.    Regular and Irregular Expenses Owning a home changes your cash flow dynamic. Beyond your monthly mortgage, there are recurring expenses such as property taxes, homeowner's insurance, and HOA fees. These outlays never disappear—even after the mortgage is paid off. The need for a maintenance savings bucket is vital. Major systems (HVAC, water heaters, roofs) eventually fail and require costly replacements. Even minor aesthetic upgrades—hardware swaps, landscaping, painting—add up over time. Prudent homeowners earmark funds monthly for routine maintenance and unexpected repairs, reducing reliance on high-interest financing or credit cards.   Smart Strategies for New Homeowners So how can you prepare for these financial surprises?   Budget for at least 3% of your purchase price to cover upfront and post-closing needs Consider multiple inspections for varied expert views on your property Prioritize your upgrades/repairs list and spread out non-essentials over 6–12 months Avoid draining your savings—leave a cushion for inevitable surprises Shop around for service providers to save thousands on repairs and upgrades   Buying a home is exciting, but it's also a layered financial decision. With careful planning and an awareness of the not-so-obvious expenses, you'll hold onto the joy of homeownership without sacrificing your financial health.  The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.   Resources & People Mentioned This is the Reddit story we're referring to: https://www.reddit.com/r/Mortgages/comments/1tjobzf/first_time_homebuyers_what_was_the_biggest/ Connect With Physician Cents WealthKeel LLC Olson Consulting LLC Tyler Olson on Twitter Chad Chubb, CFP®, CSLP® on Twitter   Subscribe to Physician Cents Apple Podcasts   Audio Production and Show Notes by - PODCAST FAST TRACK  

Buying a home is a major milestone, especially for physicians who've spent years renting and dreaming of settling down. However, jumping into homeownership right after landing your first attending job can carry serious risks—financial, professional, and even personal. On the show this week, we break down the real costs, challenge common assumptions, and equip you with strategies to make the right decision for your lifestyle.   Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients. You will want to hear this episode if you are interested in...   [00:00] Understanding closing costs and commissions [04:21] Discussing home buying decisions [09:45] Understanding Non-Compete and Home Location [11:09] Understanding work-life balance factors [16:05] Discussing inflated housing markets [17:25] Challenges of settling for physicians Why Physicians Should Think Twice Before Buying a Home After Training   Many new doctors are shocked to discover just how expensive it can be to exit a home purchase gone wrong. If you think closing costs are painful, wait till you find out what negative equity is—where the proceeds from selling don't cover your remaining mortgage and transaction fees, forcing you to pay out of pocket to leave your home.   Closing costs on both buying and selling can easily reach $100,000 for a $1 million home. On buying, expect 2-3% for administrative fees, and on selling up to 5-6% in realtor commissions plus additional expenses, totaling between 7-10%. This doesn't factor in sudden market downturns that can leave homeowners with negative equity, multiplying financial stress and drastically limiting options.   Knowing When You're Really Ready   We talk a lot on the show about the danger of buying before you truly know your job and location. Many fall into the trap of assuming that once they become an attending, stability is guaranteed. But the reality is often different: about half of doctors leave their first attending job within a few years. As one story highlights, a physician purchased a home immediately after starting a new job, only to discover soon after that the workplace environment was toxic—and due to a non-compete clause, had to sell and absorb huge costs.   What's more, your experience as a trainee in a city or at a hospital is not the same as being an attending. Even returning to a familiar place, the dynamics, expectations, and relationships can shift dramatically, catching many off guard.   Renting Isn't Defeat—It's Strategic Flexibility   It's understandable to crave permanence after years of training and relocation, renting for a year or more can be the single best way to test-drive your new life and protect your finances.   Renting lets you: Assess job satisfaction and work-life balance without pressure Get to know neighborhoods, school districts, and commuting patterns Allow time to clarify actual income, bonuses, and lifestyle expenses Be nimble in case you need (or want) to pivot jobs or locations Don't be swayed by cultural or peer pressure that "successful people own homes." For physicians at this career juncture, flexibility is an underrated asset.   Reviewing Contracts and Watching for Conflicts of Interest   Physicians should never overlook the importance of having their employment contracts, especially non-competes, reviewed by a qualified attorney before making financial commitments. A restrictive non-compete could lock you out of entire regions if the job doesn't pan out, forcing an expensive relocation and home sale.   Equally important is recognizing who stands to benefit from your buying decision. Mortgage brokers and realtors may encourage larger purchases because their commissions increase, but their incentives are not always aligned with your best interests. It's important to seek unbiased advice from professionals who prioritize your goals, not their commission checks.   Any home purchased should fit seamlessly into your long-term financial plan. Compensation structures for physicians are often complex and unpredictable, making it all the more important not to overextend based on projected (but not guaranteed) bonuses. Consider basing affordability on your base salary alone, treating bonuses as welcome extras rather than essentials. The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers. Connect With Physician Cents   WealthKeel LLC Olson Consulting LLC Tyler Olson on Twitter Chad Chubb, CFP®, CSLP® on Twitter   Subscribe to Physician Cents Apple Podcasts   Audio Production and Show Notes by - PODCAST FAST TRACK