• linkedin
  • Increase Font
  • Sharebar

    Questions every physician should ask about their practice’s retirement plan

     

     

    Is my plan following an evidence-based approach?

    Following an evidence-based approach to patient care is prudent, as is applying time-tested investment techniques informed by well-conducted research. While there are many paths toward a good savings strategy, there are some strategies that are proven to maximize a plan’s return on investment. Take auto-enrollment, for example: a Vanguard study showed that making enrollment in a 401(k) an opt-out instead of an opt-in process doubled the number of people who saved for retirement—42% of those with voluntary enrollment use their 401(k)s, as compared to 91% of those who are auto-enrolled. Eight in 10 study participants in auto-enrollment plans also increased their contributions over time—a very good statistic, when you consider that the biggest factor of a successful retirement strategy is the actual amount of money put aside. There are similar arguments to be made in favor of other features, such as auto-escalation, rebalancing and investing in index funds.

    When it comes to investing, ask yourself whether you’re acting according to conventional wisdom, or according to what has been proven to be effective.

     

    Does my plan make saving for retirement easy?

    There are few to-do lists longer than a doctor’s. And no matter how much research exists in its favor, if implementing auto-enrollment isn’t an easy process, very few plans will go for it, especially if the person administering the practice’s plan is responsible for other things. 

    The best plans help make decisions easy because they provide the advice and context needed to make the right decisions under the right circumstances. Manjoney looked for an automated plan that offered both computer-generated advice based on a variety of personal factors and human financial advisers to ensure that everyone participating in the plan would be on track. 

    “I think an automated approach has as much, if not more, data at its disposal to guide people of any age and investment type to choose the right kind of investments. An important factor in choosing a plan was the capability to show information from all of your investments in one place to get a holistic view of your financial health,” says Manjoney.

    A good plan will make the right savings strategies available to plan participants. In contrast, a well-designed plan will make taking advantage of those features painless and efficient and help maximize the tax benefits of making those investments in the first place.

    As a physician, you’ve made a career out of improving the well-being of your patients. Make sure you’re setting your practice and yourself up with the tools needed to look after your own financial well-being, too. 

     

    Amy Ouellette
    Amy Ouellette is the head of operations at Betterment for Business, a technology-led 401(k) provider that aims to deliver better ...

    0 Comments

    You must be signed in to leave a comment. Registering is fast and free!

    All comments must follow the ModernMedicine Network community rules and terms of use, and will be moderated. ModernMedicine reserves the right to use the comments we receive, in whole or in part,in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

    • No comments available

    Latest Tweets Follow

    Poll