As a physician, you’ve dedicated your life to the noble cause of helping others, which can often mean sacrificing your time, energy and sometimes even personal life to prioritize the well-being of your patients.
With such an important and demanding vocation to attend to, it could be easy for your personal financial management to take a back seat — but it doesn’t need to be that way. Good financial planning for physicians could be crucial for helping you and your family establish long-term stability through wise wealth management practices.
Moreover, while certain financial planning practices are universally helpful, many physicians face unique challenges that require a more personalized touch — whether that is because you have to navigate high student loan debt, or because you could be busy balancing your busy career with a long-term vision for generational wealth.
Financial Planning for Physicians: The Iron Point Difference
At Iron Point Financial, we know that financial planning for physicians can go even further than addressing circumstantial needs — as your finances can be an expression of your core values. As the saying goes, “Where your treasure is, your heart will be also.” We know that most physicians’ hearts are for others: their family, their patients and their community.
That is why we offer financial planning for physicians that goes way beyond simple investment or retirement plans. Instead, we take a holistic approach, in much the same way a caring doctor would frame health for their patients: you can prescribe a particular medicine, but patients need to complement those with good diet, sleep and exercise habits too. Generally speaking, it is easier when everything works together for a common purpose.
In other words: a values-based approach, where you don’t just focus on arbitrary numbers, like those in a standardized index or mutual fund. Where you intentionally, directly apply your values, goals and the causes you are passionate about to your financial planning. Where everything comes together to serve the same, compelling vision.
After all, most physicians enter the profession because they care about helping people — about seeing them live the best lives possible, and about “doing no harm” in the process — so why should financial planning for physicians be any different?
In this article, we intend to take your whole-life desires seriously without compromising on the practical needs you and your family may be facing. We will use a holistic, values-based lens to talk through six unique financial situations many physicians face.
Sidebar: What does “Values-Based” Even Mean?
It’s easy to talk about values in the abstract, and to assume everyone knows what you mean by that term. We suspect physicians like yourself could be especially well acquainted with the difference between theory and practice — between wishy-washy sentiments and nitty-gritty medical operations.
So before we progress any further, let’s ground what we mean when we use the term “values” as applied to financial planning for physicians. Perhaps the best and most universal definition of values we know of comes from VIA Character Strengths, which was inspired by scientific research at UPenn on global, shared values. “VIA” stands for “Values In Action.”
Some relevant “VIA Character Strengths” include (with financial planning examples):
- Love of Learning: Many physicians are fascinated with the inner and outer workings of the human body, and to qualify as a doctor, you need to spend many years in college and in-hospital education. What if you could take your love of learning and share it with others, perhaps by contributing to your child’s 529 fund?
- Appreciation of Beauty & Excellence: Physicians are held to the highest professional and ethical standards, so it stands to reason that many care about doing the best job possible, and appreciating good work in others. What if you took the same approach to financial planning, perhaps by working with an excellent financial advisor?
- Leadership: A core part of financial planning from a values-based perspective involves giving back to the community: maybe you could consider funding mentoring programs that help children in at-risk areas onto a pre-med track, through tax-optimized donations or other investment options?
With “values” like these defined and exemplified, we can now head on to the crux of this article: six needs unique to financial planning for physicians.
1. Managing High Student Loan Debt: Aligning Debt Repayment with Long-Term Goals
One of the biggest financial challenges most physicians face early in their careers is managing student loan debt. According to the Education Data Initiative, the average medical school graduate carries around $235,000 in student loans. This debt could feel overwhelming, particularly during your residency or fellowship training program years.
At Iron Point Financial, we believe that it would be wise to approach student loan repayment in the same way you would treat your larger life goals. While some financial planners might just focus on getting you the lowest interest rates or shortest repayment plans, we are open to taking a broader view. We want to sit down and understand how your debt affects your career trajectory, lifestyle, and the causes you care about.
Practically speaking, that means talking through options including:
- Repayment Plans: This involves comparing income-driven repayment plans with refinancing options, depending on your unique goals and cash flow needs.
- Loan Forgiveness: If you work in a qualifying public service or nonprofit position, we can explore Public Service Loan Forgiveness (PSLF) to help you align your debt management with your commitment to service.
By tailoring your debt repayment strategy so that it fits the rest of your life, we hope that you can be free to focus on what truly matters — whether that’s advancing in your career, giving back to your community, or spending time with your family.
2. Creating a Balanced Investment Strategy: Integrating Financial Success and Ethical Choices
One financial reality many physicians experience is: delayed, but high, earnings potential. Years of schooling, training, and residency mean that your income typically doesn’t increase until later in life. Once that does happen, we would submit that it can be important to develop an investment strategy that reflects both your financial goals and your personal ethics.
At Iron Point Financial, we understand that many thoughtful physicians want their investments to perform well, but may also be concerned about the impact their money has on the world. With that in mind, we are happy to offer values-based investing — often referred to as Environmental, Social, and Governance (ESG) investing.
This approach can help to ensure that your portfolio aligns with the causes you care about, including:
- Sustainability: Investing in companies that prioritize environmental responsibility.
- Healthcare and Innovation: Supporting businesses that contribute to advancements in medicine, public health, or other areas that match your professional values.
- Social Impact: Avoiding companies that engage in unethical practices or support industries you may not agree with (for instance, weapons manufacturers or gambling corporations).
By taking a holistic approach to investment management, we can help you grow wealth while making sure your financial strategies are aligned with the mark you want to leave on the world.
3. Retirement Planning: Prioritizing Work-Life Balance and a Legacy of Care
Given the demands of the job, physicians often face burnout, particularly after decades of hard work in intense environments like the ICU or emergency wards. Given that stress, we suspect you would prefer that your retirement takes into consideration not just good financial management, but a future where you can focus on what matters to you personally — spending time with family, pursuing enjoyable hobbies, or engaging in worthwhile charitable activities.
At Iron Point Financial, we don’t take a one-size-fits-all approach to retirement planning. We work with you to identify what retirement looks like based on your values:
- Flexible Work Arrangements: Do you envision transitioning into part-time work or consulting in your later years? We can help design a retirement plan that supports a phased approach, giving you a measure of flexibility as you approach retirement.
- Legacy Planning: If you want to leave an altruistic legacy of care, we can incorporate charitable giving or healthcare-related philanthropy into your retirement planning. Whether through donor-advised funds, charitable trusts, or foundations, we can curate a retirement plan that reflects the impact you want to have beyond your working years.
We understand that retirement is more than just a financial milestone—it’s a key life transition. That’s why we want the retirement plans we provide to reflect not just basic financial goals but the values you hold dear.
4. Risk Management: Protecting Your Livelihood, Family, and Future
Physicians, like all professionals, face risks that could threaten both their business and personal lives. From the possibility of malpractice suits to the health risks associated with a high-stress profession, it can be highly advisable to have a solid risk management strategy in place.
Iron Point Financial can help physicians mitigate risk to what they’ve built through tailored risk management solutions, including:
- Disability Insurance: As a physician, your ability to earn an income is tied to your ability to work. Disability insurance can help to ensure that you can maintain your lifestyle and take care of your family in the event of an injury or illness.
- Malpractice Insurance: While most physicians already have malpractice coverage through their employer, we work with you to assess whether supplemental coverage might be necessary to protect personal assets.
- Liability Protection: Incorporating liability protection into your overall financial strategy can help safeguard your personal assets, particularly if you own a private practice.
By taking a holistic approach to risk management, we can work to ensure that you’re covered from all angles; in other words, expressing the VIA Character Strength of prudence (“acting carefully and cautiously, avoiding unnecessary risks and planning with the future in mind”).
5. Tax Planning: Optimizing Financial Strategies with an Eye Toward Giving Back
Tax planning is the penultimate aspect of financial planning for physicians we will touch on today. Let’s be real: a high income in the latter stage of your career could mean a significant tax burden. And with that, you could be wise to consider tax planning options that legally and ethically minimize what you have to give to the government.
For physicians who are passionate about giving back, we can help integrate charitable giving and philanthropy into bespoke, tax-efficient financial plans. Some strategies we can offer include:
- Charitable Giving: Whether through donor-advised funds or direct donations, we can help you support the causes that are important to you while taking advantage of charitable tax deductions on your 1040.
- Retirement Account Contributions: By maximizing contributions to tax-advantaged retirement accounts, such as 401(k)s or Roth IRAs, you can incrementally reduce your current taxable income while safeguarding your retirement income.
- Tax-Efficient Investments: We can build investment portfolios with an eye toward minimizing tax liabilities, for instance by employing tax-loss harvesting or tax-deferred investment vehicles.
By crafting a tax plan that combines charitable giving and values-based financial strategies, we can help physicians like you reduce your tax burden while making a positive impact on society.
6. Estate Planning: Leaving a Meaningful Legacy
For many physicians, meaningful estate planning is about more than just protecting assets—it’s about leaving a meaningful legacy that reflects your life’s work and values. Whether you want to ensure your family is financially looked after, support charitable causes, or fund healthcare initiatives, estate planning can be a critical part of building a lasting impact.
At Iron Point Financial, we offer a values-based approach to estate planning:
- Philanthropic Legacy: Many physicians feel deeply connected to causes related to healthcare, medical research, or global health initiatives. We can help you create charitable trusts, foundations, or donor-advised funds that allow you to impact the areas you care most about for generations to come.
- Family Security: We can help you craft an estate plan designed to protect your family’s financial future, whether through trusts, wills, or other legal structures.
- Tax Efficiency: Estate taxes can erode the value of your assets, so we can work with you to create a tax-efficient plan that ensures as much of your wealth as possible passes to your heirs or chosen causes.
By addressing your estate planning needs holistically, we can help to ensure that the legacy you leave behind reflects both your financial success and your commitment to making the world a better place.
Conclusion: Aligning Financial Success with Your Values
At Iron Point Financial, we believe that financial planning for physicians is about more than just building wealth—it’s about aligning your long-term financial success with your values.
Whether you’re managing student loans, planning for retirement, or creating a charitable legacy, we want to work with you to develop a holistic financial plan that reflects both your unique life circumstances and your vision for the future.
By taking a values-based approach to financial planning, we can help physicians like you not only work towards financial independence but also make an even more meaningful impact on the world around you.
If the values-based approach we have talked about in this article appeals to you, why not reach out to Iron Point Financial today to schedule a complimentary consultation?
Or, if you enjoyed this article on financial planning for physicians, but you don’t feel ready to talk to a financial planner, why not sign up for regular email updates, so that you don’t miss future posts?
Iron Point Financial is here to empower you to secure a brighter tomorrow. We operate physical offices in Grove City, PA and Greenville, PA.
We primarily serve residents of Pennsylvania, Ohio, West Virginia and Florida but we also have registered broker licenses for 22 other states across the continental USA.
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Disclosures
- Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
- Investing in mutual funds is subject to risk and loss of principal. There is no assurance or certainty that any investment strategy will be successful in meeting its objectives.
- Investors should consider the investment objectives, risks and charges and expenses of the funds carefully before investing. The prospectus contains this and other information about the funds. Contact Greg Liszka at greg@ironpointfin.com or 724.458.5090 to obtain a prospectus, which should be read carefully before investing or sending money.
- Before investing, the investor should consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan.
- For a comprehensive review of your personal situation, always consult with a tax or legal advisor. Neither Cetera Advisor Networks LLC nor any of its representatives may give legal or tax advice.
- ESG investing involves the exclusion of certain securities for non-financial reasons. This may result in the investor forgoing some market opportunities that may have been available to those not subject to such criteria. There is no guarantee that any investment goal will be met.
Charitable Remainder Trusts:
- Such trusts are used to develop a vehicle for donations to a favorite charity, which also allows for the reduction of income taxes through a charitable deduction and favorable tax treatment at the date of the gift by non-recognition of built-in capital gains.
- The use of trusts involves a complex web of tax rules and regulations. You should consider the counsel of an experienced estate planning professional before implementing such strategies.
