5 Questions Mid-life Physicians Must Answer to Secure Their Financial Future

July 26, 2021
Established in their careers, mid-life physicians should take a big picture view of their finances to secure their future.

As our lives and careers evolve, so too do our financial situations. This is especially true of physicians whose careers demand ongoing attention to more complex financial needs. 

Early in their careers, physicians tend to struggle with sizeable student debt while simultaneously trying to start a family or a practice, or both! At this stage, saving and investing may take a backseat to competing financial priorities like debt repayment, saving for a down payment on a home, or covering childcare expenses. 

Physicians in mid-life have more financial options

By mid-life, though, physicians tend to be better established and earning a higher income. They likely even have a much more favorable debt-to-income ratio, meaning less of their cash is tied up in debt repayment and more is available to save and invest. These circumstances allow much more flexibility and are often when other financial milestones come into closer view—goals like saving for retirement, funding children’s college educations, and building a legacy. 

The problem is that most physicians are often at a loss for how best to position themselves to achieve these goals once they’ve arrived in this season that straddles the early and late career. Some physicians may have multiple income streams and unconsolidated retirement plans, while others are pouring funds into a life insurance policy that could be better invested elsewhere. The mistakes are common and potentially damaging, but not financially life-threatening when caught and remedied far enough in advance.

The reality is that life moves quickly and long-term priorities are often pushed out of view, but midlife presents the perfect window of opportunity to take a step back and envision the big picture. At this stage, there is still plenty of time to re-align, re-adjust, and propel toward your version of an extraordinary life.  

To help you capture a bird’s-eye view of your situation, we’ve compiled a list of the top five questions every physician must answer as you enter midlife in order to secure a sound financial future.

1. Are you saving enough? 

Perform a spending analysis

As you enter into a chapter where your income allows you to make more investment decisions with your money, you’ll want to evaluate how you spend your current income. The key will be to decide if you are saving enough to reach your goals on your desired timeline. This will illuminate if you are overfunding or underfunding goals and allow you to adjust your savings allocation accordingly. 

2. Are you spending and investing in line with your values?

Give yourself a values check-up

Your spending analysis may reveal that you aren’t putting your money where your values are. And that’s ok! As life unfolds, many of us tend to unintentionally go into auto-pilot mode. We grow accustomed to doing things a certain way and don’t think twice about it. Building wealth that carries on for generations, though, takes careful and intentional planning. Both the qualitative and quantitative elements of wealth must be addressed in order to shape something truly meaningful to you.

Mid-life is a great time to evaluate if you are truly spending with intention. Maybe filling the coffers for your son’s secondary education is more meaningful to you than having a second car or leasing a new building for an upgraded practice. 

Disciplined and intentional spending can free up significant amounts of money for investments without requiring you to cut back on anything that you really care about. In many cases, it’s simply a matter of redirecting funds to more important causes. Many physicians find it empowering to re-allocate their income to the people and goals that matter most to them.

3. How should you invest your money to reach your goals and support your lifestyle?

Identify your target dates, risk tolerance, and planning options

Now is a critical time to take a high-level look at all your debts and resources to identify where gaps or bottlenecks could be hindering you from reaching your goals. 

  • Are you losing money to high investment costs and management fees? 
  • Do you have orphaned retirement plan accounts from previous employers you’ve lost track of?
  • Do your insurance policies provide you the coverage you need without overcharging? 
  • Are your investments actively allocated toward your time horizon and risk tolerance?

Think of this as a spring-cleaning exercise of sorts. With roughly half your career span left, you have plenty of time to get your financial house in ship shape before you take the leap into retirement. This time is a great opportunity to accelerate your savings, eliminate some debts, and make a switch into more productive investment positions. 

4. What do you want your resources to do for your children, grandchildren, and your community?

Plan your legacy

Legacy planning is deeply personal. Ultimately, it involves making decisions about the impact you’d like to leave on the people and world around you. How will you use your resources to enhance the lives or situations of those who succeed you? How will you give back to the community that provided for you for so many years? Here, again, the qualitative considerations will be guiding your decision-making.  

5. Are you receiving valuable advice?

Ally with a trusted, fee-only wealth planner

It may be time to take a deep introspective look at your personal financial situation and decide whether you could benefit from the guidance of a fee-only advisor. So many doctors find that they are losing time and money by:

  • Relying on inadequate or misguided financial advice 
  • Paying too much for the advice they are receiving 
  • Attempting to DIY their investments and financial plan

Fee-only advisors are compensated by charging a flat fee, or percentage of Assets Under Management (AUM), for their services. Unlike brokers or other financial service providers, we do not earn commissions or kickbacks on the sale of financial products. This means the financial advice you are given from a fee-only advisor is provided in your best interest, not for the purpose of generating a sale. Not only is this compensation structure more transparent, but allows you to keep more of your income to continue earning and growing over time. 

Building Lasting Wealth with WillKate

Building an extraordinary life for your family today and leaving a legacy to provide for future generations takes purposeful, ongoing planning that aligns with your values and personal vision. Not only do we help physicians get a clear grasp of what wealth and prosperity mean to you and your family, but we help you bring those visions to life. 

If you are a physician looking for fee-only financial guidance and planning to enhance your life and protect your legacy, we encourage you to send us a message today. We would be happy to answer any of your financial questions and share more about how you can benefit from personalized wealth management services we offer.