Financial Planning Strategies for University Healthcare Professionals

Chris Reddick |

Working in university healthcare can be an enriching career opportunity for a doctor or healthcare professional. The opportunities to serve traditionally, more underrepresented groups of patients are significant. As a financial planner working with doctors and healthcare professionals, there are some important financial planning opportunities.

1) Maximizing University Retirement Savings. Working in a public university, you can access various retirement options. One is the defined benefit pension plan such as TRS if you work in Texas. You can also enroll in a 403(b) or 457 plan. There are important choices about what plans or plans will work best with your retirement goals. For example, if you plan on staying at the university for many years and making a career, a pension might be a better option as it gives you fixed monthly payments. You might also want to save in a 403(b) plan to maximize your retirement savings.

2) Contribute to a Roth IRA. Another significant financial planning opportunity is to save in a Roth IRA. For most doctors, this would not be possible as a direct contribution to a Roth IRA because of income limits. But you could do a Backdoor Roth IRA. This is where you contribute to a traditional IRA and then convert the money over to the Roth IRA. The primary benefit of Roth IRAs is that the money grows tax-free and comes out tax-free in retirement. This can be especially beneficial if you expect to be in a higher income tax bracket in the future.

3) Public Service Loan Forgiveness. You can always consolidate federal student loans and apply for Public Service Loan Forgiveness (PSLF) if you have federal student loans. Universities workers are eligible for this great benefit. With the PSLF program, your federal loans get forgiven after 120 monthly payments or ten years. I have seen many doctors on track to benefit from this great program.

4) Invest in the Brokerage Account. Many doctors and healthcare professionals spend a lot of time maximizing their 403(b) plans or Roth IRAs but do not invest for other goals besides retirement. One excellent option is investing in low-cost ETFs in a taxable brokerage account. The idea is to set aside money so you can hopefully get a better return for future goals such as saving for a new home or significant life purchase. Many options, such as Robo Advisors, will even invest the money for your goals. Talk to a financial planner and learn how to invest for your goals.

5) Save on Taxes through your University Employee Benefits. Generous university employee benefits help you save on taxes if you are a doctor or healthcare professional. One approach is to maximize your 403(b) retirement plan contributions, which lowers your income and taxes. To reduce income taxes, also contribute to a Health Savings Account (HSA) or Flexible Savings Account (FSA). Also, take advantage of pre-tax employee benefits such as disability insurance and low-cost term insurance provided at your university. Many of these options are low cost and provide excellent value. But unfortunately, many doctors and healthcare professionals do not carefully consider their employee benefits.

These are five good options to maximize your financial planning opportunities in the university healthcare system. Talk to a financial planner to get a customized plan to maximize your chances of success. Reach out to me on the page below if you can be of service.


*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on to avoid federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets.

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