Five Retirement Planning Tactics for Doctors

Retirement planning for doctors is a little different than other professionals. This is because doctors generally start earning late. In India, the duration of MBBS course is 5.5 years, which includes a year of mandatory internship. Also, most doctors pursue specialized courses, which take a few more years.Additionally, establishing practice takes time. All of these culminate into late earning. However, like others, doctors too need to retire at some point and, hence, it’s essential to formulate an effective retirement plan. This blog highlights five retirement planning tactics, which physicians can adopt to enjoy a stress-free retired life.

Automating savings is a good way to build a retirement corpus. Though cashflow for doctors isn’t fixed, they can start small and top-up the amount with an increase in income. There are several avenues to do.
Recurring deposits from banks and systematic investment plans (SIPs) in mutual funds inculcate automatic savings. In both, a fixed amount is deducted at a pre-defined interval.

Most doctors today run their own clinics. Running a clinic can strain finances and therefore, it’s essential to evaluate areas where expenses can be cut. For example, instead of starting with a big space, it’s prudent to rent or buy a smaller space.Also, leasing medical equipment rather than buying can result in significant savings that can be invested to compound wealth in the long term.

Partnering with other medical professionals to merge practice can split costs, resulting in more savings. As a doctor, you can reach out to your peers and see if they are willing to collaborate.If so, not only will it expand the scope of practice but also give the flexibility to channelize savings towards building a retirement corpus.

A combination of fixed-return and market-linked products can go a long way in securing retirement for doctors. While fixed-income instruments can offer capital protection, market-linked ones can provide capital appreciation in the long-term.At the same time, it provides the much-needed diversification, a core tenet of investing. However, before investing, it’s important to do adequate research and have a holistic view of one’s risk appetite.

Doctors can take additional work to bolster income. For example, they can take up part-time teaching in schools or colleges or write columns in newspapers and magazines for extra income. All these can supplement their primary income.

The job of a doctor is stressful and often lack of time results in delaying financial planning. However, as a physician, you should look into this aspect and if needed, seek help from a certified financial planner.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.