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Nearing Retirement? Hoping to Reduce Your Hours and On-Call Shifts?

Creative Planning
Last Updated
December 11, 2020

Questions You Should Be Prepared to Answer Before Speaking With Management

If you are like many of the physicians we work with, you may be concerned about your transition to retirement. How will you step away from the work you love, the patients who have become like family and the coworkers who have grown with you over the years, both professionally and personally? Nearing retirement, it’s common for physicians to look for ways to reduce their hours and get rid of the dreaded on-call shifts. You’ll have much more leverage and negotiating power to shift to a pre-retirement, part-time schedule if you are financially secure. Before you speak with management about reducing your hours as a physician, work with a financial advisor to develop a financial plan and gain an understanding of retirement finances.

Through many years of working with clients, we know it’s not nearly as impactful to save more over the last few years of your career as it is to continue earning some additional income as you near retirement. Even part-time income can help reduce stress on the portfolio and lessen the “sequence of returns risk” in early retirement. Having some non-portfolio income in retirement reduces the amount you need to withdraw from your portfolio and allows your assets to continue growing for use later in retirement.

Consider these questions before talking to your employer about your retirement or semi-retirement plans:

  • Are you contractually obligated to stay on through a certain date?
  • If you are considering a switch to a new employer, what does your non-compete agreement say about being employed within a certain distance of your current network? Is there a time period from termination you must wait before you can legally begin practicing again?
  • Is it wise to remain employed through a certain date to receive a cash bonus, a retirement plan employer matching contribution, or to fulfill a retirement plan or stock option plan vesting requirement?
  • What happens to any vested and non-vested stock options, restricted stock units and other types of incentive compensation upon retirement or termination?
  • What are the distribution requirements for any deferred compensation plans upon retirement?
  • If semi-retirement is appealing, can you do locum tenens work without the requirement of on-call hours, teach at a local university or do research in a lab?
  • Are there exams or re-certifications you want to avoid taking again that may fall naturally into a time period where it makes sense to move on to a new position?
  • Do you know what your health insurance options are upon separation or a reduction in hours?
  • What impact does retirement or reduced income have on Social Security benefits for you and/or your spouse?

If you’re nearing retirement, you’ve likely spent a considerable amount of time accumulating wealth throughout your career. During the next chapter of your life, you will need to take a rather large sum of money and turn it into a paycheck to fund your desired standard of living. If you haven’t worked with a financial advisor to develop a plan for that next chapter, now’s the time.

If you’d like to help turning your retirement dreams into reality, please schedule a call.

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This commentary is provided for general information purposes only and should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed.

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