NEWS & RESOURCES

Five Reasons Physicians Need a Holistic Financial Advisor

Jason Underwood, Financial Advisor

By: Jason Underwood, Financial Advisor
CNC Financial Group, LLC

Working in the medical field comes with unique financial opportunities and challenges – personally and professionally. You can – and should – expect more from an advisor than simply helping you plan for retirement and managing an investment portfolio. Physicians, on average, work longer than other professionals because they started their careers later than most after graduating from a professional school. Working with a financial advisor experienced in helping individuals and families in the medical field who can offer advice across multiple areas that span your complete financial picture is essential.

Here are five service areas that can be beneficial to working with a holistic financial advisor if you’re a practicing or retired physician:

Optimize your household cash flow. Your financial advisor should help you build a budget to identify money coming in and going out. Your advisor should help you build an emergency fund, so cash is available if something happens so you have a cushion that could give you much-needed peace of mind. It’s essential for you to be transparent with your financial advisor so they can understand your entire financial picture. This way, you know where to cut back if you must – and you can see how financial decisions affect your household and your long-term goals.

Prioritize and pay down debt. Not all debt is bad, but all debt needs managing. ‘Bad debt’ is typically credit card debt or loans with high-interest rates and paying them off as quickly as possible should be a top priority. Your student loans, however, are necessary debt and an investment in your education and future earning potential. According to the Association of American Medical Colleges, 73% of medical school graduates will incur debt and for 2021 graduates, that debt is just over $200,000 on average. It’s important to pay off student loans as soon as possible, but you need tax-smart advice and a strategic plan on how to pay down that debt while staying focused on other areas like contributing to a retirement plan.

Save on taxes while you save for retirement. Saving for retirement is not just a way to save for the future. It also presents opportunities to implement tax-saving strategies. It’s critical to work with a tax-smart financial advisor that can consult on a withdrawal strategy for your retirement distributions and advise on tax-saving strategies like a Roth IRA conversion, for example, to give you a broad range of options focused on leaving you feeling financially secure as you live out your golden years.

Plan your estate. The estate tax, sometimes called the “death tax,” is levied on a deceased person’s assets. Washington does not have an inheritance tax, but a Washington State estate tax exists. Working with a tax-smart financial advisor can help you establish a tax-efficient estate plan for the future of your estate and ensure your assets and loved ones are cared for according to your wishes. Whether it’s helping you designate your beneficiaries or establish a will or trust, you must be thinking now about the future by building out a plan so that it can give your heirs peace of mind once you’re gone.

Help buy or start a practice. If you are looking to start, buy or sell your practice, it’s important to work with professional partners who have experience working with physicians and are experts in this area of practice. Your financial advisor should be able to collaborate and introduce you to other professional partners you will need for business planning purposes. They need to communicate well – not only with you but also with each other. Your business team should include:

  • An attorney
  • An accountant
  • A banker/lender
  • A financial advisor
  • An insurance agent

As a physician, there are many pieces to your financial puzzle. You’ve spent many years getting the education and training to be great in your field. But your training doesn’t necessarily equip you for managing business finances, planning for retirement, knowing when you’re overpaying on taxes, and planning for the future of your estate. By working with a tax-smart financial advisor who evaluates the big picture and understands the unique challenges you face – you can uncover greater financial opportunities that you could be missing.

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