When it comes to preparing for the future, we are all told to save, save, save. But opinions differ as to how much you need to save in order to achieve financial independence. Additionally, every person deals with money differently; some tend to be more frugal while others have no qualms about spending freely. As the preferred financial advisors for doctors in Canyon County, we’re here to tell you about the 30% rule to help you save big.
Regardless of your annual income, wealth management for doctors in Canyon County can be a tricky subject. Contrary to common belief, merely earning a substantial paycheck is not enough to ensure one’s future financial security; in fact, high-earners are often more prone to overspend and make other costly financial mistakes due to having an inaccurate sense of savings stability.
Nevertheless, there are simple habits you can implement into your daily life to increase the amount of money you contribute to your savings accounts. As you evaluate your financial standing, consider these four ways to allocate more funds towards your long-term savings goals.
A recent study conducted by the Insured Retirement Institute * revealed that as Baby Boomers are now entering or nearing retirement, they are grossly under-prepared. In fact, findings show that 45% of Boomers have zero retirement savings. Of the 55% that have saved some, many have massively underestimated the amount that they will need to make it through their retirement years. Getting professional financial assistance can help prepare you for retirement.
According to the study, Boomers’ lack of preparation stems from misjudging how much annual income they will need, underestimating health-care and long-term care costs, and failing to work with a professional.
Typically, society tends to associate “wealth” with large paychecks or high earnings. However, true wealth and financial independence are not generated by the amount of money you bring in, but by how you manage that money. Many high-earners have a much lower net worth than you might expect, largely because of a few common mistakes that high-income earners tend to make.
Often, people’s biggest fear when approaching retirement is that they will outlive their savings. This is a valid concern for many, considering that the average investor is far behind where they should be for a secure retirement. At Idaho Medical Association Financial Services, we offer financial planning for physicians and healthcare professionals in Canyon County and the surrounding areas. We help people ready themselves for the future every single day. One financial asset that many people have questions about are annuities.
After years of schooling, residencies, and accumulating student debt, physicians enter the workforce. They begin their careers with large salaries and tremendous upside potential; however, late entry into the workforce leaves medical professionals roughly a decade behind their peers when it comes to saving and investing for retirement.
Contributing to your employer’s 401(k) plan can create the foundation of your retirement savings. Often, your employer will offer a company match that can help you reach your retirement goals. At Idaho Medical Association Financial Services, we believe that these plans are a great tool in saving and planning for retirement.
Doctors enter the workforce in a unique position; after years of school, residency, and student loans, they finally begin their practice and start bringing in real paychecks.
Due to their delayed start of their full wage-earning years, physicians and surgeons often get a late start on saving for retirement. Paying off student loans can also push retirement savings to the back burner. Nevertheless, your career as a medical professional provides you with the opportunity to not only catch up on retirement saving but to soar ahead (as long as you play your cards right).
So where do you start? If you are a doctor in your 40’s, here some guidelines for how much you should save and how to get there.