Retirement Planning

10 Steps for Physicians Driven to Retire

You have heard it before: the story about the hard-working physician who "retired" only to be forced back into practice by unforeseen financial difficulty.

If you want to retire some day and stay retired, here are some steps you can take to make your retirement a pleasant trip.

1. Look both ways. Nothing is more important to you than your family, and you want to be there when they need you. But what happens when your adult child takes an unexpected trip through graduate school and the tuition comes due? And who will support your aging parents in the event that something happens and they need your financial support? If some “emergency” emerges, who will they call? That’s right…  you. Look toward the future for both generations and you'll be more likely to keep your retirement on track.

2. Drive your debt to zero. If you are "debt free except for your mortgage,” you're setting yourself up for a difficult retirement. Remember, your retirement income may vary from year to year but your mortgage remains the same, and this can cause trouble. Refinancing a mortgage (or getting a new one if you move) is tough when you're basically unemployed. If you have enough money to pay off your mortgage before you retire, then pay it off. And if you don't, then find some way to become completely debt free before you quit your day job.

3. Calculate your financial gas mileage. Do you know how much money you spend each month to maintain your standard of living? Probably not. A surprising number of new retirees have never used a budget, nor measured what they spend. This is not just important, it's crucial. Figure out how much goes out each month by keeping a spending journal or using software like Mint.com to find your number. Remember to include what you spend on credit cards. Then add to this number all of the personal expenses that run through your practice (medical, dental, insurance, travel, mobile phone, etc.). Most people are surprised by what they spend, and it's better to be surprised while you're still employed.

4. Don’t let a broken promise wreck your retirement. Do you intend to depend on income from sources other than your own savings? Will Social Security really be there for you throughout your whole retirement? What about Medicare? If you're in line for a pension, how strong is the company who will be cutting your check? From time to time, big organizations break their biggest promises. When you do your planning, include scenarios showing what happens if these promises are broken, then be certain they don’t break your retirement.

5. Remember, you’re driving into a headwind. If you know how much income you’ll have and how much you’ll spend, it's tempting to think you’re good to go. But proceed with caution. If inflation runs at only 3%, your cost of living will double during the first 25 years of retirement. And the deferred taxes on IRAs, 401ks and annuities may consume as much as one-third of what you withdraw. Be certain to include these factors in any plans you make.

6. Ladies… Stop, look and listen. Statistics tell us that women outlive men but they fail to make it clear that a woman often cares for her husband as he ages, often consuming her financial, physical, and mental resources. Ladies, who will care for you when he’s gone? Maybe your children will but it may be an assisted living or long term care facility. Look into long term care insurance for yourself and remember to include the cost of the premiums in your budget for retirement.

7. Are you ready to go? A host of research studies indicate that the highest sustainable withdrawal rate a retiree can take from a well-diversified portfolio of stocks and bonds is 4% per year. That means a $1 million account might allow you to take out $40,000 per year with a minimal chance of running out of money before you run out of retirement. Use simple math to run a quick reality check on your retirement plan. Multiply the value of your investments by 4% (then subtract about 1/5th for taxes if most of your money is in an IRA or 401k). Is it enough to cover your annual cost of living in retirement? If it is then...

8. Hire a professional to point the way. And by "professional", we mean a real, live Certified Financial Planner™ who works with people like you to design and execute a plan for a sustainable retirement. Be certain that this person is squarely in your corner—no conflicts of interest, no hidden agendas. Rule out any "advisor" (an unregulated catch-all label) who has less than ten years of experience and be careful when taking advice from anyone who has the potential to sell you a product. You are looking for an honest, objective answer to the question, "Am I prepared to retire today?"

9. Watch out for investment potholes! Do you remember the last time you lost money in the stock market? Since you're still employed, it probably felt like a speed bump. But if you had been retired and depending on your portfolio to support your lifestyle, it could have felt like a rear-end collision. If you have less than five years until your retirement, consider investing today as if you were retired right now, and begin thinking about how you would take money from your portfolio to pay your bills. It might help you get used to the bumps you’ll experience for decades to come.

10. Slow down before you stop. When you have made up your mind to actually retire, consider your options before you come to a full stop. The most successful retirement strategies for physicians usually involve some form of continued practice. Maybe you’ll drop a day from your clinical schedule each year, or do locum tenens for a few years. Think of your retirement as the road that connects what you do now with what you will do for the rest of your life.

You have worked hard for all these years to be able to retire. A little bit of planning now can make it a long and pleasant journey for you and your family.

 

13 Tax Mistakes Doctors Make That Cost Thousands

Tax mistakes are the most common financial mistakes physicians make. Errors, oversights and outright blunders cost thousands in unnecessary income taxes so a little tax planning goes a long way to save money for doctors.

If you want to catch mistakes before they cost you, check out the list below. By the way, the financial mistakes you see here are real: we have seen at least one doctor make every error on this list. (See Assumptions at the end of this article.)

1. Overlooking the Health Savings Account means overpaying taxes

A Health Savings Account (HSA) is a tax-advantaged savings vehicle that lets you make tax-deductible contributions, enjoy tax-deferred growth, and make distributions that are tax-free when used to pay qualified medical expenses. it’s also the best tax break you can get as a physician since it’s a permanent benefit.

Anyone who is covered by a qualifying high deductible health plan (HDHP) can contribute to a Health Savings Account. Many doctors don’t know they have a HDHP option or they don’t understand how HSAs work, so they stay the course with first-dollar coverage and lose the tax benefit.

This mistake costs doctors who are eligible for a family HSA plan $2,228 each year.

2. Spending your HSA makes healthcare less affordable in retirement

Health Savings Accounts are poorly understood by most physicians who often mistake them for FSAs (Flexible Spending Accounts). With the balance in a Flexible Spending Account, you must “use it or lose it” by the end of the year. With HSAs though, “using it” means you lose the power of tax-free compound growth. The smart move here is to invest the HSA balance and let it compound over time.

By making the mistake of spending your HSA each year, you throw away more than $390,000 in tax-free earnings over a 30 year period and that’s money you could have used to cover the cost of healthcare in retirement.

3. Skipping the 529 tax deduction is like skipping college

Section 529 college savings plans are tax-deferred accounts that can be used to pay qualified higher education expenses including college tuition, fees, room, board and the cost of a computer.

While almost every physician has heard about 529 plans, it’s no wonder they tend to skip the accounts altogether. The rules— including how much you can contribute, how much you can deduct, how many accounts you need and whether the deduction is granted to one taxpayer, one return or one account—all vary from state to state. Still, it makes sense to puzzle out the rules, especially in more expensive states where the top tax rate can run to 9%.

Physicians who pay taxes in Colorado, Georgia, Idaho, Iowa, Kansas, Louisiana, Maryland, Michigan, Mississippi, Missouri, Montana, Nebraska, New Mexico, New York, Ohio, Oklahoma, Oregon, Rhode Island, South Carolina, Utah, Virginia, West Virginia, and Wisconsin all get a state tax break. In Oregon, the deduction is worth $455 per year. In New York, it’s worth $882 per family. In a handful of states—Colorado, New Mexico, South Carolina and West Virginia—the deduction is unlimited. Perversely, the state with the highest tax rate offers no deduction at all: thanks California!

 No matter where you live, 529 plan accounts can grow tax-deferred until you withdraw the money to pay for college, tax-free. Assuming a savings fate of $500 per month over 18 years, skipping the 529 plan is a mistake that can cost physicians over $90,000 in tax-free growth: enough to send one child to a state college for four years.

4. Believing you cannot contribute to an IRA leaves assets unprotected

Tax advisors often tell physicians “you cannot deduct an IRA contribution” which doctors mistakenly understand to mean, “there’s no reason to do an IRA.” It’s the first logic error in this two-part tax blunder.

Assuming annual household contributions of $11,000 over 30 years, the “tax arbitrage” opportunity—the way you can leverage your current high tax bracket against the lower tax rates you will see in retirement—is worth more than $168,000 to a physician family. The mistake is compounded by the fact that the alternative vehicle to hold these savings is often a taxable account where income and dividends are taxed every year.

When you combine this mistake with the fact that IRAs receive asset protection from creditors under the Bankruptcy Abuse Prevention Act, it’s easy to see how a well-meaning tax man’s casual comment can steer plenty of docs in the wrong direction. But there’s more to this story.

5. Failing to use a Backdoor Roth IRA makes retirement more taxing

A “backdoor Roth IRA” isn’t really a Roth IRA at all. It’s a Traditional IRA that receives a nondeductible contribution that is converted to a Roth IRA.

The physician family who contributes $11,000 to Traditional IRAs each year for 30 years ($5500 per spouse) and then dutifully converts those contributions to a Roth IRA will owe no income taxes to withdraw the money.

On the other hand, physician families who merely contribute to a Traditional IRA and fail to do the conversion will be forced to begin withdrawing the money at age 70½ and pay more than $90,000 in income taxes.

6. Ignoring Roth rules makes the Backdoor Roth (surprisingly) taxable

The rules surrounding IRA conversions are so complicated that many physicians wind up paying taxes for something intended to save them.

First, physicians need to understand there are two kinds of money in most IRAs: pre-tax money (that comes from 401k rollovers and previously deducted direct IRA contributions) and post-tax money (that comes from direct contributions that were not tax-deductible). You can think of this as “bad money” (pre-tax) and “good money” (after-tax). To effect a successful Roth conversion, you have to separate the good money from the bad (using a 401k rollover) or you will pay taxes on the bad money that is converted.

Second, doctors need to know that “IRA” means all of your Traditional IRAs, no matter where they are held, and your SIMPLE and SEP-IRA balances. The IRS sees all of these accounts as “your IRA” such that when you convert one, you are deemed to have converted a pro rata portion of all your IRAs.

Finally, even if you manage to separate the good money from the bad, you still need to handle your tax return correctly. If you fail to tell your tax specialist that you “converted a Traditional IRA with basis to a Roth IRA” or if someone fouled up Form 8606 of your tax return somewhere along the way, you are very likely to (unknowingly) pay unnecessary taxes which might conservatively be estimated at $3,600 for a physician family with two IRAs.

7. Rocking the wrong Roth makes doctors pay more tax now and less later

Did you know there are three Roths? It’s true. There’s the “front door” Roth IRA that’s right for interns, residents and hardworking but underpaid doctors who can contribute directly to a Roth IRA. Then there’s the backdoor Roth IRA that’s right for docs who cannot directly contribute to a Roth IRA. And finally there’s the Roth 401k that’s right for low earners but disastrous for high earners.

When you contribute to the non-Roth portion of your 401k, you are able to defer taxes into the future, when rates may be lower for you.

But when you contribute directly to a Roth 401k, you are essentially raising your hand to the IRS and saying, “please tax me now.” If you’re a high earner, you’ll pay an extra $6000 in taxes each year by rocking this Roth.

8. Underfunding your 401k is like giving extra money to the tax man

Sometimes it makes sense not to fund your 401k, like when there’s no employer match, when you’ve got a ton of high interest rate student loan debt and when you have zero dollars in your Emergency Fund. But for all but a few physicians, the best bet is to stuff your 401k as full as you can.

Even knowing this, many physicians fail to do so. Sometimes there’s a mix up and they fail to enroll. Other times they enroll but fail to contribute enough to get the match. And occasionally the contribution limits change but they have elected a flat-dollar contribution amount that’s never reviewed, resulting in a contribution gap.

To avoid paying an extra $6,000 to $8,000 a year in taxes, check your 401k account every year in September to see if you’re on track to make the maximum contribution by year’s end. If not, you still have time to fix it.

9. Working extra hard to pay extra taxes for self-employed physicians

Moonlighting, doing locums, researching, lecturing, teaching, acting as a contracted medical director and other sideline doctor gigs are a great way to pick up some extra cash—and extra taxes— if you overlook special deductions available only to self-employed physicians.

If you don’t have a 401k at work, you can easily set aside $18,000 in a tax-deferred self-employed retirement plan. Physicians who do have a 401k at work can establish a profit sharing retirement plan for their own business and contribute up to $36,000 in 2017. If you have a whole bunch of self-employment income, you can even establish a defined benefit plan and save even more. But doctors who didn’t know about these opportunities will likely pay somewhere between $2,000 and $9,000 in extra taxes.

10. Blowing up your retirement plan by overlooking the fine print

While this is a less common mistake, the consequences are dire. Small physician practices who lack a skilled business manager—often radiologists and ER docs—sometimes have an “everybody does their own thing” style of retirement plan in which everyone opens a SEP-IRA wherever they like and everyone contributes as much as they like.

In these cases, there is a de facto qualified retirement plan in place for the entire practice but there is no documentation and no one checking to make sure the contributions meet IRS guidelines. Occasionally these groups will hire a W2 employee and exclude them from the plan, which runs afoul of the rules surrounding “affiliated service groups.”

These situations are complex and often require an ERISA attorney and an accountant to straighten out the plan. Those who fail to get with the program run the risk of having their plan “disqualified” which leads to immediate taxation of the entire plan balance plus the payment of penalties, undoing all the tax savings from the plan. It’s impossible to estimate the cost of this mistake but know that the low end is on the order of tens of thousands of dollars.

11. Holding taxable bond funds in a taxable account

Although veteran investors know that a taxable bond fund generates income that causes state and federal income taxes, many physicians—even those under the care of financial advisors who should know better—own taxable bond funds in taxable accounts.

For example, a surgeon owns a joint account with her husband that holds $1.2 million in mutual funds, including $400,000 invested in corporate bonds. Those bonds yield dividends of approximately $13,000 this year. Their tax bill for these dividends is approximately $4,000, so only $9,000 remains of the return they garnered.

Had this couple purchased a tax-exempt bond fund that pays dividends of $11,000, they may owe no taxes. As a result, this couple would have an additional $2,000 this year and years to come.

12. Giving away tax benefits when donating to charity

When you give to charity, you can donate cash or you could donate securities. Since qualified charities are treated as non-profit organizations under the tax code, giving them appreciated securities means physicians not only receive a tax deduction but they avoid paying capital gains tax.

For example, a physician family owns mutual fund shares worth $50,000 for which they paid $30,000. If they donate the shares to charity, the charity can sell the shares to raise $50,000 cash and sidestep the capital gain. However, if that couple makes the mistake of first selling the shares, they will pay unnecessary capital gains tax of $2,000.

13. Just saying “yes” to stupid tax penalties

While many physicians assume the Internal Revenue Service is a bunch of jack-booted thugs intent on making life difficult, the IRS tends to be a little more understanding, particularly in the case of honest first-time mistakes.

If you have failed to file or failed to pay your taxes and it’s your first offense, you can ask for an “abatement” by writing a well-worded letter to the IRS asking them to waive the penalty. We all make mistakes but failure to ask for an abatement means sending good money after bad. Remember, if they say “no,” you are no worse off than if you hadn’t asked at all.

 

The biggest tax mistake physicians make is to think of taxes only at “tax time” when it’s too late to do anything about it. Most doctors file their personal taxes on a calendar year basis which means that you pay on April 15th for everything that happened between January 1 and December 31 of the prior year… after the fact.

To avoid making tax mistakes that cost thousands, start thinking about this year’s tax bill right now, and check in with your financial advisor and your tax specialist throughout the year to see what you can do to pay no more than what you truly owe.

ASSUMPTIONS: Federal marginal income tax rate of 33% (which kicks in at $230K for joint filers), a 20% capital gains tax rate, no state income tax, no Medicare surtax and a hypothetical 7% return. For post-retirement tax calculations, we assume a 25% federal marginal income tax bracket. These are conservative assumptions which means a few physicians will save less by avoiding the mistakes above but many doctors can save much more than what is demonstrated.

Demystifying the defined benefit pension plan| W. Ben Utley CFP® writes for Orthopreneur

When it comes to money, there’s only one thing more complicated than the tax code, and that’s the rules surrounding qualified retirement plans. While they may be complicated, these plans are simply the best way for surgeons to beat the tax man at his own game.

No qualified plan is more powerful than a defined benefit plan, and no plan is more poorly understood. Here’s a primer to help you get started.

A defined benefit plan is an employer ­sponsored retirement plan that promises to deliver a specific or “defined” amount of money or “benefit” to an employee beginning at retirement and lasting for the rest of their lives. Traditionally known as “pension plans,” defined benefit plans have been around for decades. Actuaries—the bean counters who design and administer these things—refer to them collectively as “DB plans” and the most recent incarnation of the DB plan is called a “cash balance plan.”

No matter what you call it, the DB plan is a wicked sharp tool for deferring income, reducing taxes and protecting assets.

Every dollar that goes into the plan is a dollar that your employer (that’s you, if you’re self-­employed) does not pay out in profits, which means that income is not taxed today. If you’re a surgeon aged 45 earning $210,000 or more, you can receive contributions to your plan of up to $112,000 in 2014 (twice as much as you could contribute to a combination 401(k)/profit­sharing plan). At age 55, you can receive contributions of more than $200,000. Given taxation in the 35 percent Federal marginal tax bracket, surgeons taking advantage of a DB plan are deferring somewhere between $39,000 and $70,000 in taxes every year.

Note the use of the passive voice, here. We did not say “you can contribute.” We said “you could receive contributions.” This is one aspect that sets the defined benefit plan apart from the more familiar defined contribution plans (like 401(k), 403(b) and profit­sharing plans). You, as an employee, have precisely zero control over a DB plan. It all rests in your employer’s hands. They decide how much you can defer, how it will be invested and whether or not you can participate. If you’re not self­employed, you might as well stop reading here because there’s literally nothing you can do about a DB plan.

If you’re self-­employed, though, meaning you’re a partner, shareholder, LLC member or sole practitioner, there are a few things you need to know.

  • Contributions to your DB plan are based on your employee’s age and compensation. Older, more highly­compensated employees (typically the surgeon owners) will require greater contributions, while younger staff with lighter wages will get less.
  • You cannot game the system so that only the owner-­employee benefits. The IRS has strict rules about who must be covered and more rules that prohibit discrimination. A skilled actuary may be able to tilt the playing field in your direction, but you must know that your employees will be treated equitably by your plan.
  • A DB plan requires commitment. While there is no hard and fast rule about how many years you must keep your plan in operation, actuaries generally advise employers to keep their plans open for at least five years, and to keep those plans active/funded in at least three of those years. This means you need to have a reason to believe that your practice will have sustainable positive cash flows in the foreseeable future.

These general guidelines paint a picture of which practices should, and which should not, adopt a DB plan.

The best fit scenario we have seen was a group of four radiologists who had no employees. Two of the physicians were in their early 60s, with one junior partner in her mid ­40s and one newly ­hired physician on track to become a partner. They all earned mid-­six-­figure incomes. Collectively, they could have socked away more than a half million dollars a year.

The worst fit scenario typically involves younger physician owners with highly-­compensated physician extenders, a plethora of older support staff and a hazy or fragile bottom line.

However, some scenarios that seem like a poor fit for a DB plan might be salvageable. Particularly in situations where the employer has a safe harbor defined contribution plan, like a combination 401(k)/profit sharing plan where the employer is already making generous contribution to each employee’s account. In such a case, it might be possible to dramatically increase the overall contributions to owner-­employees while only slightly increasing the share of plan benefits received by employees.

Beyond the tax benefits, DB plans are hugely helpful for surgeons in subspecialties with high rates of malpractice. As entities governed by the Employee Retirement Income Security Act of 1974 (ERISA), they are exempt from the reach of creditors through bankruptcy.

If you decide to explore the option of adding a DB plan to your practice, there is no substitute for a consultation with a pension guru. It is customary for pension actuaries to run a complimentary analysis of your practice to let you know whether or not a DB plan might be right for you. This analysis is usually free of charge.

While the rules surrounding DB plans are painfully complicated, there is no reason to fear what you do not at first understand. The potential benefit is so enormous that you owe it to yourself—or at least you owe it to the next partner who brings this idea into your executive committee meeting—to ask questions and listen to the answers so that you can understand all the costs and benefits to know whether or not a DB plan is a good fit for your practice. 

W. Ben Utley, CFP®, is an attending advisor with Physician Family Financial Advisors, a fee-only financial planning firm helping physicians throughout the U.S. to make a plan and get on track with saving for college and invest for retirement.

This article originally appeared in Orthopreneur with the title "Demystifying the Defined Benefit Pension Plan".

Three ways to make the best of a bad (401k) situation | W. Ben Utley CFP® writes for Orthopreneur

We see the changes that physicians make to improve their financial security, but one item is usually beyond their control: their 401(k) plans. Unless you are self-employed, there is practically nothing you can do about your 401(k)’s underwhelming investment options, ridiculously low contribution limits or perverse tax consequences. If your 401(k) is your main (or maybe your only) investment vehicle for retirement, we have good news for you. It is possible to work around your 401(k) plan’s limitations, so that you can get back on track toward retirement.

Low Limits Many physicians operate under the mistaken belief that if they max out their 401(k) plan contributions, they will be set for retirement. But did you know that the maximum amount of money you can elect to defer into your 401(k) this year is only $17,500 ($23,000 if you will be age 50 or older by December 31)? That’s roughly $1,400 deducted from your paycheck each month ($1,900 per month if you are age 50 or older).

Have you ever met a physician who could live well on $1,400 a month? We haven’t. In fact, the physicians whom we serve are planning to spend more like $10,000 per month in retirement, and that’s after tax. It would take a miraculously high rate of return to turn $1,400 per month pre-tax into $10,000 per month after-tax. As you can see, many physicians are well on their way to a retirement disaster.

To improve your odds of reaching your retirement goal, you can save outside of your 401(k) plan. Even if you cannot deduct the contributions you make to a Traditional IRA, you can still contribute $5,500 this year ($6,500 if you will be age 50 or older by December 31), and if you max out your own IRA, your spouse can also contribute up to $5,500 to his or her IRA ($6,500 if he or she will be age 50 or older by December 31), even if they are not earning an income. Depending upon your tax situation, it might also make sense to convert these contributions to a Roth IRA, doing what is known as a backdoor Roth IRA contribution. Once the money is in a Roth IRA, it can grow tax-free for the rest of your life. Of course, this still might not be enough to allow you to retire comfortably, so you should consider investments outside of your 401(k) plan and IRAs.

Underwhelming Options You probably haven’t read the fine print behind your 401(k) plan, but you are betting that your practice manager has carefully vetted both your 401(k) plan provider and the investments offered inside your plan. Don’t believe it! We have found that busy managers either fail to read the fine print or lack the experience to understand what they have read. Despite new laws requiring plain English disclosures of investment-related fees, many employers continue to keep physicians locked into expensive plans with unpalatable investment options.

If your plan charges more than 50 basis points (0.50 percent) on top of mutual fund operating expenses, your plan’s costs are draining an unfair share of your retirement savings. To get this under control, you need to raise your voice, but carefully. We regularly see very expensive plans that persist simply because of office politics.

It’s more common to see an investment lineup consisting mostly, if not entirely, of actively managed mutual funds. This is a sign of ignorance on the part of your plan fiduciaries. At a time when most prudent investors recognize that passively managed index funds have been shown to have delivered better results at a lower cost than the average actively-managed fund, there’s no good reason that your plan should continue to limit you to subpar investment options.

To work around these issues, look at your retirement investments holistically. Think about your 401(k) plan, your Traditional IRAs and your after-tax accounts (mutual funds and brokerage accounts) as if they were all one retirement portfolio. Then use the least-bad investment options from your 401(k) and pair them with the best options available within other accounts that make up the balance of your portfolio.

Tax Time Bomb You already know that physicians pay more than their fair share of taxes. But did you know that you are probably setting yourself up to pay more taxes on your 401(k) than you really should? That’s right. There’s a perverse little wrinkle in the tax code that can turn your 401(k) plan into a tax time bomb.

To understand this trap, you need to know a little bit about how investments are taxed. Withdrawals from your 401(k) plan will be taxed at your marginal income tax rate, which may be as high as 39.6 percent for Federal income tax. At the same time, capital gains and qualified dividends from mutual funds held in taxable accounts outside your 401(k) plan are taxed at a maximum Federal rate of 23.8 percent (which is 20 percent plus the new 3.8 percent Medicare surtax).

This means that your 401(k) nearly doubles the tax rate you pay on capital gains and qualified income by effectively converting these tax-favored returns into tax-trapped ordinary income. Consider holding equity mutual funds in a taxable account, or better yet, own them in your Roth IRA or the Roth subaccount of your 401(k) if you have one.

If your 401(k) is a lousy place to stash your stock funds, what should you hold there instead? Consider low growth, income-producing investments, including bond funds and stable value funds. If you have an appetite for more aggressive fare, consider high yield (junk) bond funds or emerging market bond funds. Outside of your 401(k) plan, these investments may be taxed at your highest marginal rate, so it’s a good idea to protect your income by keeping it inside of the tax shelter of your 401(k) plan.

Again, the best workaround for this tax trap is to view your entire retirement portfolio, including your 401(k) plan, your IRAs and your other accounts that are earmarked for retirement, as one portfolio. Choose to own the best investments in the accounts that make the most sense from the standpoint of expense, risk, return and taxation.

Summary Even if you are stuck with a stinky 401(k) plan, you can still make the best of a bad situation. All you have to do is take a look at the big picture, think outside the box and make smart moves to put yourself on track for a solid retirement.

 

W. Ben Utley, CFP®, is an attending advisor with Physician Family Financial Advisors, a fee-only financial planning firm helping physicians throughout the U.S. to save for college and invest for retirement.

Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF, is the founder of Physician Financial Services. Based in New York. He offers income protection and wealth accumulation strategies for physicians nationwide.

This article originally appeared in Orthopreneur with the title "Overcome 401 (k) LImitations: Three Ways to Make the Best of a Bad Situation".