As a self-employed medical entrepreneur, it’s your responsibility to plan for your financial future. This means setting up retirement accounts as soon as you open your practice, as well as investigating your estate planning options. As an independent contractor, you have more retirement contribution options than a regular employee. Popular retirement plans for physicians include:
- Individual 401(k)s
- Cash balance plans
- Profit sharing plans, and
- SEP IRAs
Each of these plans limits the amount of your annual contributions based on your income, and in some cases your age. Many retirement plans offer tax-free contributions that lower the amount of taxable income you owe each year. Once you have set up your retirement accounts, the next step is estate planning. A living trust or will protects your assets in the event of your passing, and allocates those assets to your family or others of your choice. Make sure to keep all beneficiaries and documents up to date, and that your spouse or another family member knows where your will is kept.
Retirement and estate planning is crucial to your personal financial health and the financial health of your medical practice. Consult your financial planner to see which plans may be right for you.
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