Advertise on podcast: Physician Family Finances Podcast

Have you ever opened a 1099 pay stub and found the gross pay matches the take-home?It’s a lovely feeling, roughly on par with finding a twenty in last fall’s jacket. The twenty is entirely yours, and it covers a cider donut with change left over. But that paycheck may have a tax bill attached that hasn’t shown up yet.The tax bill will find your mailbox eventually. Will you be ready for the number printed on it?We also have an “asking for a friend” question and answer your colleagues' questions.A listener asks, “We are considering upgrading our house from a $1M home to a $2M home. Being 10-15 years from retirement, is this a bad idea?”An Internist in Minnesota says, “I've been doing a backdoor Roth for three years and just learned I have an old rollover IRA sitting there. Did I mess this up?”Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected] marketing disclosures at physicianfamily.com/disclosures

Do you ever get money advice from family members who make a fraction of what you do? A doctor once told me his uncle had it all figured out for him. Buy a rental house now, have it paid off right around the time the kids start college, then let them live in it and charge their friends rent to cover tuition. He nodded politely. While he was nodding, he was thinking about the fact that he has no idea where his kids will go to school, that the plan requires buying a house near a campus a nine year old has not picked yet, that somebody has to find and maintain a college town rental for eighteen years, and that his college money was already growing tax free in an account that does not call anybody at midnight about a water heater. His uncle was not being foolish. When you do not have much to save, leveraging yourself into real estate seems reasonable, and that plan beats doing nothing. But doctors have a different set of circumstances. Especially when it comes to their tax situation. In this week’s episode, a dermatologist asks whether she should keep contributing to her pre-tax account at work for the deduction, or switch to Roth, meaning after tax contributions that grow tax free, since she plans to cut back to a three day work week and make less money. If she starts asking around, she will get advice from everyone as if they are all in the same tax bracket. Pay the tax now and benefit later is the common answer, and it is a good one for a household earning an average salary, where the deduction being passed up is worth very little. Her deduction comes off the top of one of the highest tax brackets in the country, and dropping to three days a week will not change that as much as it sounds like it should. Most of the advice you get is free and well meant. Whether it was built around your set of circumstances is a different question. We also answer your colleagues' questions. An Ophthalmologist in Virginia says, “I have 529s for both of my college-age children with enough to cover their college education. Most of the accounts are still in stocks, and I’ve just been liquidating funds as needed. Returns have been good to date, but I feel like I’m gambling with a downturn. Should I convert the 529 funds to cash?” An Internist in Oregon writes, “I inherited my dad's IRA last year, and I'm told it has to be emptied in ten years. How should that money be invested in the meantime?” A Urologist in Vermont asks, “Our taxable account has drifted way out of balance because the stock funds grew. Rebalancing means selling and paying taxes. Is it worth it?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started,' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

A house cannot tell you how the people inside it are doing financially. It just shows you what somebody built. It says nothing about their down payment, their mortgage payment, what goes into their retirement plan, or what is set aside for a nine-year-old's tuition. For years we drove down to California to see my wife's side of the family, and I spent most of those trips feeling like I was doing something wrong. Every driveway on the street had a brand-new car in it, while we pulled up in a used car we had paid cash for. Five years into these trips, I finally said something to my wife about it: "How is everybody driving a new car?" She looked at me like I had asked why the sky was blue. "They all have mortgage-sized car payments. They say it's because they're in traffic two hours a day, but really it's just LA's version of keeping up with the Joneses." I was doing what you are doing now. I looked at the nicest thing I could see and decided everyone was ahead of me. You are picturing your partners putting a huge chunk down on a multimillion-dollar new build and still investing as much as you do. That picture is usually wrong. I have seen the balance sheets of hundreds of physician families, and I can tell you that in most cases, the bigger the house, the smaller the retirement accounts. Building your dream home without jeopardizing your college fund is still possible. I see families do it responsibly every year. It just usually happens about five years after some of your colleagues. Setting yourself up for success financially comes from a series of good decisions made over many years. That may not be exciting, but neither is starting every month with a five-figure mortgage payment and nothing left for your future. The only comparison that matters is you against your own plan. We also answer your colleagues' questions. My group offers disability insurance, and I also have a policy I bought in residency. Do I still need both? I bought Apple stock many years ago, and I want to sell it now that it's at an all-time high. How do I avoid paying so much in taxes on the sale? Our bank keeps offering a physician loan with nothing down. We have enough for 20%. Is the physician loan still the better deal? Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

Nobody trains a sponge. You leave it in the sink, and it takes on whatever is in there: the dishwater, the coffee grounds, the cereal milk somebody poured out at breakfast. Kids work about the same way. The sit-down conversation about investing and saving goes nowhere. What lands is the endless Amazon boxes on the porch, the credit card handed over without a care in the world, and the "sure, go ahead" that arrives before the money question is finished. In a house like yours, the thing they are soaking up is that money does not appear to run out. It all comes back out when you squeeze it. Like the time Nate’s boys asked his mother-in-law why she doesn't get a nicer car. We also answer questions from your colleagues. A Pediatrician in Oregon writes, “My husband and I both make good money, and we cannot agree on anything. He wants to save every dollar, and I want to actually use some of it. Who's right?” A mid-career physician in the Midwest asks, “What are the pros and cons of taking out a variable universal life insurance policy as a mid-career physician? An OBGYN in New Hampshire says, “I started with a hospital group mid-year last year because they offered me my dream setup: it was a short commute, pay and benefits were competitive, and the culture was exactly what I was looking for. They just got acquired this year, and everything has changed. Is it worth it for me to switch to locums at this point?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected].

Dessert comes after the vegetables. A seven year old goes along with this because at seven the broccoli takes four minutes and the ice cream shows up in the same hour.You have been eating vegetables since you were twenty-two.The lake house for three weeks with your brother's family, all four grandparents in one place while they can still get on a plane, the summer where nobody is covering anybody's shift. Every one of those is sitting on the far side of a plate that somebody keeps refilling, and the ice cream is scheduled for your early sixties, but by that time your kids will be in their late twenties and your parents will have stopped flying.My great grandfather ran cattle for fifty years and ate his dessert first, every day, before the meal. He was not a man anybody would have called undisciplined.The pie did not cost him the ranch, and the week at the lake is not going to cost you your retirement.This week we answer your colleagues' questions:In “asking for a friend,” we answer, “What is inflation and how does it affect me?”An Emergency Medicine Doc in Colorado asks: "We have 1.1M in assets and are on track to retire by 60 but I haven’t seen anyone in my group make it past 57 before getting a less demanding job and I still have 50k in private student loans. Can we afford to re-do our basement and go on a vacation?"A Radiologist in Missouri says, “My company offers a cash balance plan, and I currently contribute $60k per year, but could increase that. Should I contribute more?”A Dermatologist in Georgia asks, “I am 38, make 800k a year now, but I just went through a divorce and only have about 100k saved for retirement due to switching jobs multiple times before I qualified for retirement benefits. Can I retire before I am 70?”Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected] marketing disclosures at physicianfamily.com/disclosures

What is in your garage that you would not go out and buy today?The elliptical. Your father-in-law's table saw. Six gallons of the paint color from the last house.This week we take a question from a physician who inherited a large position in a single company's stock and has left it alone since the day it arrived.We also answer your colleagues' questions.A surgeon's son in Washington wonders, “What is the rule of 72?”A dermatologist in Arizona says, "We inherited $300,000 that has been sitting in savings ever since. Every time I go to invest it, the market is at another record high. When do I pull the trigger?"A rheumatologist in Kansas asks, "My whole 403(b) is in one total market fund. I keep reading that the index is really just ten AI companies now. Am I less diversified than I think?"Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected] marketing disclosures at physicianfamily.com/disclosures

Every lifeguard learns the same thing before they are allowed near the water. You do not swim into someone's arms. A panicking person will climb you, and then there are two people in trouble instead of one, so you bring something that floats and you keep it between you. Nobody watching from the sand thinks the lifeguard is being stingy about it. This week we talk about aging parents who are running out of money, and what a physician's household has to keep standing while it helps. We also answer your colleagues' questions. A Surgeon in Pennsylvania says, “I currently have a HDHP with an HSA and contribute the family amount since my son is also on my insurance. He will drop off mid-year and I will then have single coverage. Does this affect my HSA contributions?” A Urologist in Minnesota wonders, “Our oldest starts college next fall and the 529 has more in it than I expected. How do we actually spend it, and do we tell him what's in there?” A Radiologist in Illinois asks, “I inherited an after-tax retirement annuity from my dad. What is it?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

Nobody books the all-inclusive because the food is better. They book it because it takes the risk out of the trip. No bad rental in the wrong part of town and no hour-long drive to anything worth eating. An annuity is the all-inclusive resort of retirement. The right side of the menu is blank, but it’s “would you like fish or chicken” for seven days, and the pre-packaged excursions are the closest thing to spontaneity you will get all week (ask me about the fish bowl my son and I “snorkeled” in at the Aulani hotel in Hawaii last year). The bracelet they snap on at check-in also doesn't come off, and the money you already paid isn't coming back on the night you'd rather drive into town for tacos. Being worry-free about prices all week is not the same as the week being cheap. You paid for every one of those meals before you got on the plane, and you paid extra for the part where you don't have to think about it. Guarantees have a price, so what does handing that risk over actually cost your family? This week we go through what an immediate fixed annuity actually is: what the buyer hands over, what the insurance company takes on, and where the money goes at the end. We also answer your colleagues' questions. An Internal Medicine Doc in Oregon asks, “If we make a $125k contribution to our child's 529 account, will we owe gift taxes?” A double-doc family in Texas says, “We are currently renting but want to buy a home in the near future. We also have ~$150k of federal student loans and are not pursuing PSLF. Should we use extra cash to save for a down payment or should we pay off our loans quicker?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

Stock market charts can look like roller coasters, and most people assume the young riders are the ones who enjoy the drops. Not always. Nate Reineke and Chelsea Jones answer a question from an emergency medicine physician who is naturally risk-averse and feels pressure to invest aggressively simply because of their age. We also answer your colleagues' questions. A surgeon in Georgia asks, “We have a decent-sized brokerage account but found ourselves in a position with no emergency fund and a five-figure emergency. Should we take out a HELOC or withdrawal from our account?” A pediatrician in Oregon writes, “I have been a diligent saver for much of my career, and on top of that, I just received a sizeable inheritance of a couple million dollars. I still plan on working until 65. Can I start overspending on travel a bit now?” A Family Medicine Doctor in Texas says, “I am working toward PSLF and have heard about the “buyback program”; what is it and how does it work?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

There are two ways to get saving for your children wrong. You can undersave and leave your kids with student loans. You can oversave and hand a nineteen year old a pile of money with no strings attached. Physician families tend to worry about the first one and end up closer to the second. In our new episode, we discuss which accounts help keep you out of both ditches! We also answer your colleagues' questions A Surgeon in Arizona says, “My portfolio has drifted way off from where I set it a few years ago because stocks ran up so much. Do I actually need to rebalance, and if so, how do I do it without triggering a big tax bill?” A Hospitalist in Texas asks, “I've got a 401(k), a Roth IRA, an HSA, and a taxable brokerage account, and I have no idea what's supposed to go where. Does it matter which investments live in which account, or can I just buy the same thing across all of them?” A Gastro doc in Michigan writes, “Every time the market drops, I get the urge to sell and wait until things calm down. Is there ever a good reason for a long-term investor to move to cash, or is that always a mistake?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

Should you choose a high tax break or high investment growth? Nate Reineke and Chelsea Jones break down a common dilemma for high-earning physicians: deciding between a Cash Balance Plan and a traditional taxable brokerage account. Chelsea explains the mathematical "break-even point,” why the potentially lower growth rates of cash balance plans often favor physicians in their mid-to-late 30s and 40s who are in top tax brackets, while Nate highlights the value of brokerage accounts for early retirement flexibility.We also answer your colleagues’ questions.Asking for a friend: How do I help my parents with managing their finances when I am a novice myself?A Urologist in California says, “I want to help my children either buy a house or get started with a new family. Considering gifting them somewhere around $100k. How should I invest the money?”A Neurologist in Oklahoma asks, “We currently work at a university where we receive a generous retirement match and have access to a non-gov 457(b). We have the option to switch to the physician group where we receive 457f contributions, a similar match, a non-gov 457b and the option for a mega BDR. Should we switch?”A Double Doc family in Virginia questions, “We have about 12 months of living expenses set aside for our emergency fund. Is this too much?”Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected] marketing disclosures at physicianfamily.com/disclosures

When you log onto online physician forums, it’s incredibly easy to feel like you are losing a race you didn’t even know you were running. Nate Reineke and Chelsea Jones tackle a question from a 40-year-old family medicine doctor in Texas who reads online that they are "behind" and discuss why why having a personalized plan helps find peace of mind.We also answer your colleagues’ questions.“I’m currently funding a 529 account and UTMA account for my 5-year-old, and I’m considering opening the new 530A account and funding the max $5000 per year until she turns 18. Does the “double taxation” make this account worth it?”A surgeon in Maine says, “We're considering private school for our kids. How do we know if it's a financial mistake or a fair tradeoff?”A psychiatrist in Oregon asks, “My spouse wants to go part-time or stop working to be home with our kids. How do we actually stress-test that decision instead of just guessing?”Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected] marketing disclosures at physicianfamily.com/disclosures

When planning for your children's future education, a lack of an upfront state income tax deduction can make saving feel like a raw deal. Nate Reineke breaks down a question from a Florida surgeon tempted to skip 529 plan contributions entirely because the state lacks a state income tax break. We discuss why focusing solely on short-term deductions can miss the benefit of long-term tax-free compounding growth. We also answer your colleagues’ questions. A double-doctor family in Kansas says, “We did our Backdoor Roth conversions this year, but I am not sure TurboTax coded it right when we filed. How can I tell?” An anesthesiologist in Oregon asks, “I am applying for disability insurance but there is a lot of paperwork, and I am unsure about how to do this the right way. What should I do?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

When you need an extra bedroom and a bathroom remodel, it is incredibly easy to turn a lifestyle dilemma into a stressful math equation. Nate Reineke and Chelsea Jones look at a question from a double-doctor family in Virginia who have been in their home for three years and absolutely detest the idea of packed boxes and changing neighborhoods, but feel guilty about the massive price tag of remodeling. We break down why this might not be a a financial question at all and how he real choice comes down to which type of chaos you prefer: the brutal inertia of moving your kids to a new school district, or living in a dusty construction zone for a summer. We also answer your colleagues' questions. An oncologist in Washington says, “Everybody online is saying I should pay my student loans off as fast as possible, then start investing. I am not overly concerned about my loans, but I don’t want to do the “wrong” thing. Should I invest or pay down my student loans aggressively?” A Double Doc family in West Virginia asks, “We are receiving a surprise increase in income this summer (additional $75k per year between the two of us). What should we do with the extra cash?” A Double Doc family in Florida wonders, “I actually like being “ignorant” about spending money at the grocery store… but I sometimes feel guilty about it. Should I be more budget-conscious?” Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures

Our Summer Encore Series continues! We’re revisiting episode 138, where we chatted with Brian Leet about life insurance. Life insurance is becoming a standard benefit for employers to offer, but is the group policy enough for a doctor like you? Nate Reineke is joined by Brian Leet, who helps families across the country navigate life and disability insurance. We discuss what to consider when calculating a life insurance policy, and when group life insurance through an employer isn’t enough. We also break down when a permanent policy may make more sense compared to a term policy, and how a conversion rider on a term policy could be beneficial to physicians who are just starting. If you’d like to work with Brian, he can be reached at [email protected] or 503-928-4103. Are you ready to turn worries about taxes and investing into a plan for college and retirement? If you’re evaluating your options and want to learn more, visit physicianfamily.com and click 'Get Started' or you can ask a question of your own by emailing [email protected]. See marketing disclosures at physicianfamily.com/disclosures   Guest speakers featured are independent third parties and are not affiliated with Physician Family. No cash or non-cash compensation was provided to or received by Physician Family in connection with any guest appearance. The views and opinions expressed by guests are their own as of the date of recording and do not necessarily reflect the views of Physician Family. Physician Family's decision to feature a guest is not a recommendation or endorsement of the guest or their products or services. Similarly, appearance on the podcast should not be construed as an endorsement of Physician Family.