Consider tax consequences in retirement portfolio
Q: I'm 50 years old and have been practicing for 20 years. I have maximized my retirement plan, but I've got the ability to save more. What are some other options?
A: For retirement planning, it's important to diversify, not only in terms of asset allocation, but also in the tax treatment your investment accounts receive. Putting all your retirement savings into a qualified retirement plan will reduce your income tax in the year you make the contribution. But your withdrawals will be fully taxable, and at a rate that could be higher than today's rates.
That's why you should consider spreading your retirement portfolio among qualified plans where contributions are deductible and earnings are tax-deferred; among nonqualified plans, where contributions are made with after-tax dollars and earnings are taxed each year; and investment vehicles where the contribution has been taxed but earnings are tax-deferred (such as fixed annuities, which offer principal protection and the option of a guaranteed income stream for life). Such an approach creates flexibility and allows you to be tax-wise with regard to the makeup of your retirement income from year to year.
Answers to our readers' questions were provided by Doug Burnette Jr., MD, a partner in Clark & Burnette Wealth Management LLC in Lake Charles, Louisiana. Also engage at
http://www.facebook.com/MedicalEconomics/. Send your money management questions to
MORE ARTICLES IN THIS ISSUE
A majority of healthcare providers think primary care physicians (PCPs) will be worse off after all aspects of healthcare reform are implemented than they are now, according to a recent survey by Managed Healthcare Executive.
Healthcare spending saw its second consecutive year of slow growth in 2010, mostly due to the poor economy, according to government analysts.
Collecting copays can be a hassle for your practice. But waiving them can get you in hot water.
Physicians should base their advice on what's best for the patient but also consider the cost of treatment, according to the latest edition of the American College of Physicians Ethics Manual.
Income alone doesn't mean financial success, especially if emotional investing is clouding your judgment.