Locum Link

• Do You Need a Financial Planner?

  June 17th, 2009

  In my previous post, I wrote about retirement planning and recommended that it be done with the guidance of a financial planner.

  But outside of retirement planning, a more fundamental question that many individuals and couples ask is:  do I/we need a financial planner?   I’ll try to briefly answer that below.

  What is Financial Planning?
  Simply stated, it’s the process of meeting your life goals through the proper management of your finances. Life goals can include buying a home, saving for your child’s education or planning for retirement.

  A financial planner should be able to guide you through an evaluation process that will help you take a “big picture” look at where you are financially. The process involves gathering relevant financial information, setting life goals, examining your current financial status and coming up with a strategy or plan for how you can meet your goals given your current situation and future plans.

  To answer the original question, I think you would benefit from professional financing planning if:

  • You need expertise you don’t possess in certain areas of your finances. For example, a planner can help you evaluate the level of risk in your investment portfolio or adjust your retirement plan due to changing family circumstances.
  • You want to get a professional opinion about the financial plan you developed for yourself.
  • You don’t feel you have the time to spare to do your own financial planning.  This is a common scenario for busy physicians and locum tenens.
  • You have an immediate need or unexpected life event such as an inheritance or a major illness.
  • You feel that a professional adviser could help you improve on how you are currently managing your finances.
  • You know that you need to improve your current financial situation but don’t know where to start.

  Tags: finances, locum, physician, retirement
  Posted in Money | No Comments »

• Review your Retirement Readiness

  May 4th, 2009

  It’s a sign of our troubled economic times. As American Medical News reports, many retired physicians, who thought they had their finances in order, are now re-entering the workforce to recoup their losses after the recent market meltdown.

  If you’re retired or nearing retirement, you undoubtedly took a big hit in the past year.  But if you’re younger, you have a longer time horizon in which to make up losses and put your financial house back in order.  But where to start?  Should you lower your debt?  Take on more locum tenens work?  Change your investments?

  You Need a Plan
  My first recommendation is to create a personal retirement plan working with a trusted financial advisor.  Don’t be daunted by the thought of working with an advisor (ideally, a certified financial planner) or the planning itself, because it’s fundamentally a three-step process.  If you and your advisor follow these steps, you’ll be far ahead of most Americans in terms of your preparedness.

  The first step is determine a savings goal for retirement.  That means figuring out much money you are you going to need to live well, however you define that, when you stop working. To do that you need to assess your financial needs for retirement and, in essence, project a budget for the future.  You will need to estimate all of your potential sources of income (social security, pensions, investments, etc) and all of your potential expenses (healthcare, housing, travel, etc). 

  To help with this type of goal setting, an online retirement planning calculator is a surprisingly easy and informative tool that can be a great starting point.

  Charting your Path
  Once you’ve determined your retirement goal, step two is to figure out if you’re on a realistic path to reach that goal.  That path is different for different people and there are a variety of factors to review and consider.  What is your current and anticipated future income?  Is your current spending in check?  Are you maximizing retirement plans, such as 401Ks and IRAs?  Are you diversifying your investments to mitigate risk?

  Working with your advisor, it’s a fairly straight forward process to take your retirement goal, evaluate your current status toward your goal, and then to put a plan in place to ensure that you meet the goal.

  The final step is one of annual review and assessment.  Your retirement plan is like a business plan it needs to be constantly updated and re-evaluated to ensure that it’s still sound.  During an annual meeting with your advisor, you can revise your plan to accommodate unanticipated life changes, like disability or job loss, or more positively, a financial windfall, like an inheritance.

  If you don’t currently work with a financial advisor, this search tool can help you find a certified financial planner in your area.  I’ll also devote future blog posts to financial planning.

  Tags: financial planning, locum tenens, retirement, savings
  Posted in Money | No Comments »