Retirement brings with it a host of legal and financial considerations, including future income opportunities, taxation, asset protection, and regulatory concerns that can hobble a physician at the last minute. Therefore, whether you’re a sole shareholder, partner in a practice, or simply employed by the group, “the key is to start retirement planning early and get good advice,” says Christopher Jarvis, a financial consultant and retirement planning expert with O’Dell Jarvis Mendel. Invest time in retirement planning, even if it’s decades away. One or two hours a week dedicated to outlining a retirement plan will pay off handsomely later, says Jarvis. The outline should include projections as to how much you will need to live comfortably, what additional income you can count on, and what the tax impact will be on your total income at retirement.
Buyout arrangements
The legal issues an EP will face at retirement depend on the nature of his/her practice. In a partnership structure, for example, you should examine the rights of the withdrawing physicians. The agreements should include a satisfactory buyout and stock valuation formula and terms for any lingering accounts receivables post-retirement. The buyout should also specify the amount and duration of payments the retiring physician will receive.
Know your non-competes
If you are an employee, your contract should include the time frame for its termination upon retirement. Even more important, be sure you are aware of any future non-compete agreements.
Develop your business
Treat your practice like a business. Develop additional income generating opportunities early in your career to supplement your future retirement income, says Jarvis. “Don’t just see more patients. Treating more patients doesn’t equate to making more money.”
Don’t forget the benefits
When making retirement arrangements, think about other benefits such as health insurance for you and your spouse. It may be years before you qualify for Medicare. How long will the group’s medical insurance continue to cover you? Make sure you are aware of the benefits you are likely to need such as accident or long-term care coverage.