There’s been talk in recent years about fluctuations in your annual salary—some years have been better than others. But, one constant has remained. Regardless of the dollar amount, regardless of where you are in your career, you should have been saving money for the day you flip the switch from practicing radiologist to retiree.
Setting money aside for your Golden Years isn’t always easy, industry financial experts say, but if you follow some tried-and-true tactics, you can create a comfortable nest egg that will allow you and your family to continue your lifestyle after you’re no longer reading studies.
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The best way to safeguard your financial future, says Greg Wikelius, financial planner with Chicago’s North Star Resource Group, is to create a personalized financial plan. Your vision of retirement likely doesn’t look like your colleagues’, so you shouldn’t expect your financial strategy to either.
“Make sure you have a true financial plan. Sit down and calculate how much you’ll need to save monthly or annually to be able to retire at 55, 60, or 65,” he says. “Define your goals. You can’t create a clear strategy if you don’t know where you’re headed. Only then, can you figure out what you need to do and how to get there.”
Even if you didn’t start planning for your retirement from your first day of residency, it’s never too late to start setting aside some money. Never saving anything puts you in a position to work far longer than you want to.
Designing your plan
There are a nearly infinite number of ways to design a plan that will fulfill your needs. But, with so many options, the most important thing you can do is secure sound financial guidance. That planning will be critical, says P.J. Thacker, MD, a Mayo Clinic pediatric thoracic radiologist who published a study in the Journal of the American College of Radiology about radiologist financial planning.
“I recommend radiologists work with an independent certified financial planner. New radiologists should meet with the planner at least four times annually during their early years in practice,” he says. “Once you’ve designed your plan, stick with it through thick and thin.”
Choosing the right insurance
Disability insurance: This type of insurance might not readily come to mind when you’re creating your financial plan, but it’s definitely something to make sure you have as part of your portfolio, said Tyler Weber, chief administrative and financial officer for Northwest Imaging in Montana.
“People talk about life insurance and malpractice insurance, but the one that’s the most important to your profitability is disability insurance,” he says. “The number 1 asset a radiologist has is his or her ability to reach exams. Going through all that training is an investment that should be protected, so disability insurance is probably the best dollar spent for a radiologist coming into practice.”
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Wikelius agrees. He recommends securing a policy that would provide enough coverage to pay out at least $5,000 per month.
Life insurance: Don’t ignore the need for life insurance, especially if you have a family and children. Overall, every $1 million of coverage translates into roughly $40,000 to $50,000 of annual income. If invested with a roughly 5-percent return, a life insurance policy could provide 25 years of income.