Associate Editor for Medical Economics, Physicians Practice

As the technological landscape evolves, so does the world of health care. Using smartphone apps, doctors can utilize technology to improve their understanding of their patients’ health.

While there are myriad apps available in digital storefronts hosted by Apple, Google and Amazon, it can be difficult to choose an effective app that also keeps patient health data safe.

The intelligence of smartphones in the exam room

Bradley Crotty, M.D., MPH, chief digital engagement officer and internist at Froedtert & Medical College of Wisconsin, sees the use of medical apps as a step along the road to making health care less of a transactional relationship between patient and physician.

“People come into the doctor’s office maybe two times a year, maybe four times a year, but most of the time they are managing their medical conditions along with their lives at home with their family,” he says. “They are left to take that 15 minutes or 30 minutes of time with a doctor and put together a plan, and then follow through with that plan at their home, at work or on the job.”

While these plans often consist of taking medication, they also may include changes in behaviors or routines that are more difficult for patients to engage with when they are not under their physician’s supervision.

Crotty says that smartphone medical apps and other digital tools can be a way for physicians to further patients’ health goals outside of the exam room by addressing behavior such as diet changes and exercise.

, there were 165,000 mobile health apps available in Apple and Google digital storefronts. In the four years since that study was conducted, that number has only grown. According to IQVIA, over 200 health apps are added each day.

With a seemingly endless supply of possibilities to choose from, choosing one for patients can be daunting.

Crotty says that when creating a framework for deciding which apps to fold into a practice, keep in mind what goals there are for the app. Some apps are aimed solely at the patient, while some share information directly with the physician without the patient’s involvement. Complicating matters more, Crotty says some apps are a hybrid of the two.

It is also wise to assess whether any research has been done on the app, as many have not been approved by the U.S. Food and Drug Administration, according to Crotty.

 study suggests that clinicians and patients be included in the process of reviewing which apps to use. It found weak correlations between the consumer rating available on digital storefronts, their usability and their clinical utility.

Natasha Fuksina, M.D., practices internal and obesity medicine in Newark, New Jersey. She says that an often-overlooked aspect of choosing an app for patients to use is whether it is compatible with the practice’s EHR system.

An app may be perfect for a patient\. “But how will that actually be implemented and integrated into the EHR?” she asks.

Another facet in deciding which apps is right for patients is cost. Apps that modify behavior and keep the patient in closer contact with their physician can ultimately save health care costs for both the patients and insurers, Crotty says.

Crotty believes that as these apps become more commonly used in a care setting, contracts with insurers likely will be negotiated to make the apps more economically viable as part of value-based care.

Apps may come with initial purchase costs or in-app-purchases, which can be a burden for patients, so that cost should also be taken into account when choosing which app patients should use.

 study is the apps’ crisis management. The authors found that the majority of apps they studied at the time were not equipped to properly deal with a situation where the data patients input indicate a health crisis.

Any app that tracks vital health information should be equipped with the ability to alert the doctor if a catastrophic health event is detected.

While these apps have many positive aspects, including improved accountability and ease of use, one of the biggest concerns regarding their use in the health care setting is the question of privacy.

 study found that many of the apps reviewed were using unsecure data transfer methods, such as email and text messages, to pass information between the patient and physician.

Crotty says this is an issue that must be addressed as these apps become more prevalent in the health care space. He also is concerned about the lack of transparency by app developers who are known to sell user data.

He says that doctors should have a discussion with their patients, similar to an informal informed consent, about using these apps. Some of the questions that should be addressed include:

If data are being transferred and reviewed, what are the expectations?

How are the data being stored and how long are the data being kept?

This conversation may be a patient’s best opportunity to receive direct answers to these questions, Crotty says.

Fuksina finds it quite easy to get her patients to engage with apps due to the prevalence of similar technology in the market.

“Many people now own an [Apple Watch] or Fitbit are able to use their phones to download simple apps,” she says. “And even though we do not have, right now, an app [that] integrates with our particular EHR to be able to scale it … it can ensure some patients’ responsibility and improve [adherence] and, in a way, help them be accountable for their own health goals. I’ve been able to inspire and teach them myself on several apps that I believe are very helpful.”

Crotty says to ask all patients what they are doing on their smartphones. It’s likely that they are already using their phones to search for health information on Google. Once that is known, a physician can look for opportunities to build on the what the patients are already using. To encourage patients to take full advantage of these apps, it’s important to get their families involved in keeping the patient accountable. “The patient and family are the least-utilized resource on a health care team,” Crotty says.

Articles

Use apps to improve patient outcomes

With all the useful information available on Physicians Practice, it is easy to become overwhelmed.

With this in mind, the tip of the week is a chance to reflect on some of the wisdom found all across the site.

the crucial capabilities missing from your EHR

“The EHR is excellent at doing what it was designed and chosen to do—harnessing all of the clinical, financial, operational, and patient-specific data in one place to create a single source of truth for the entire health system. It provides a unified view of all patient encounters across time and across all points of care, showing clinicians and staff a current view of the patient’s unique characteristics; however, the EHR cannot perform tasks it wasn’t built to perform.

There are three fundamental reasons why your EHR isn’t enough:

1). EHRs have a flawed concept of an appointment

2). EHRs encourage a first-come-first-scheduled mindset.

3). EHRs do not have capacities for probability theory or discrete event simulation.”

Come back next week for another tip of the week.

Your weekly dose of wisdom from the Physicians Practice experts.

Practice tip of the week: Why your EHR is just not enough

Neil Baum, MD, a Professor of Clinical Urology at Tulane University in New Orleans, LA. Dr. Baum is the author of several books, including the best-selling book, 

Marketing Your Medical Practice-Ethically, Effectively, and Economically,

 which has sold over 225,000 copies and has been translated into Spanish. He contributes a weekly video for 

 on practical ideas to enhance productivity and efficiency in medical practices.  His 5–7-minute videos and short articles provide practical ideas that can be easily implemented and incorporated into any medical practice. Dr. Baum can be reached at 

I know you've heard it many times before, doctors are rich, so they have become doctors. Dr. Kevin Pezzi has elegantly and graphically demonstrated that we don't primarily become physicians because of the monetary reward.

There are currently available jobs that provide as much or even more income than that achieved by physicians, with far fewer years spent in school and training required to become a physician. Who would think that a UPS driver right out of high school could earn more than a doctor?

 said that UPS drivers earn $60,000 per year. The average physician income is between $160,000 to $200,000 per year, so it may seem preposterous to claim that UPS drivers can earn more than doctors. Just wait.

A UPS driver can go to work immediately after high school with no additional education required. In contrast, a would-be doctor requires 8-12 years of education. He is paid nothing but incurs ~$300,000 in debt and loans after post-graduate training to pay back with interest over 20-30 years after entering practice. UPS drivers receive a salary, while those who aspire to become doctors spend thousands of dollars for the privilege of pursuing their dream.

Let's analyze how this affects a physician's net income. Most physicians will not appreciate any appreciable income until at least eight years after graduating from high school. Let's look at total net income for physicians at year 8 (red arrow) once they graduate from medical school with an average debt of around $100,000.

It takes approximately 18 years (blue arrow) for a doctor to earn the same amount as a full-time UPS driver.

The green arrow shows that it takes about 27 years for a doctor to approximately equal the lifetime earnings of a UPS driver if the UPS driver worked the same 70+ hours a week which is the time most physicians work\week, and the UPS driver received time-and-half for all hours worked after 40 hours.

In addition, to a respectable salary for the UPS driver, I am sure he didn't get out of bed in the middle of the night because a package did not arrive on time! I doubt that the UPS driver did not have to go to the truck dispatch location to repair a malfunctioning vehicle. Requests and interruptions are part and parcel of what every physician regularly does.

UPS drivers don't have to go home after work and read journals or prepare for recertification exams every few years.

This time is necessary for every physician to stay current with all the progress and changes that are taking place in medicine. All of these after-work hours are uncompensated time resulting in 60-80 hours dedicated to the practice of medicine.

Therefore, let no one tell us that we became doctors to earn lots of money. Most of us became doctors to help others. Unfortunately, an abundance of paperwork, adapting to new technologies such as EMRs, risk of litigation, and a sacrifice of time with family and friends have tarnished the attraction of a medical career. (Yet, there are a record number of applicants to American medical schools each year) If we look at what we do daily and enjoy the gratitude and appreciation of most of our patients, we will be delighted and perhaps content with our decision to pursue a healthcare career.

Neil Baum, MD, a Professor of Clinical Urology at Tulane University in New Orleans, LA. Dr. Baum is the author of several books, including the best-selling book, Marketing Your Medical Practice-Ethically, Effectively, and Economically, which has sold over 225,000 copies and has been translated into Spanish. He contributes a weekly video for Medical Economics on practical ideas to enhance productivity and efficiency in medical practices.  His 5–7-minute videos and short articles provide practical ideas that can be easily implemented and incorporated into any medical practice. Dr. Baum can be reached at 

If it were all about the money, there'd be better employment options available.

Money is not the primary motivator for why we became physicians

 advises clients on compliance, transactions, government administrative actions, and litigation involving healthcare, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, 

, Tenet healthcare Corporation (NYSE: THC) announced that a cybersecurity incident occurred a week before. “The Company immediately suspended user access to impacted information technology applications, executed extensive cybersecurity protection protocols, and quickly took steps to restrict further unauthorized activity.” In essence, and in accordance with HIPAA, the two hospitals that were impacted immediately invoked its disaster recovery and business continuity plans in order to, first and foremost, mitigate the impact on the delivery of patient care.

Tenet is a publicly traded company, so the timing of its disclosure to the market is also crucial in avoiding potential liability under a variety of SEC rules and regulations. On March 9th, the 

 on a variety of items related to cybersecurity, including incident disclosure by public companies. As SEC Chair Gary Gensler stated, "cybersecurity is an emerging risk with which public issuers increasingly must contend. Investors want to know more about how issuers are managing those growing risks. A lot of issuers already provide cybersecurity disclosure to investors.”

What can organizations do to be proactive in protecting personally identifiable information (PII) and protected health information (PHI)? The National Institute of Standards and Technology (NIST) published 

Guide to Protecting the Confidentiality of Personally Identifiable Information (PII)

, which provides sage advice for maintaining the confidentiality, integrity, and availability of data through prevention, detection, and correction. When I conduct audits, one item that never ceases to amaze me is the use of the following for passwords: PASSWORD, LAST 4 DIGITS OF SS#, OR a DATE OF BIRTH. These partial identifiers are also “considered PII because they are still nearly unique identifiers and are linked or linkable to a specific individual.” (p. 2-2).

NIST proscribes the following action items:

Identifiability. Organizations should evaluate how easily PII can be used to identify specific individuals. For example, a SSN uniquely and directly identifies an individual, whereas a telephone area code identifies a set of people.

De-identify records and information so that the individual cannot be identified.

Update policies and procedures and have tiered sanctions in place for failing to adhere to the basic tenet of not using PII or PHI as part of or a whole a password.

The scrutiny on cybersecurity measures will only become more intense. In healthcare, one must always consider the ultimate adverse patient outcome – death. As cybercriminals ratchet up their tactics on hospitals and other providers, prevention and detection are going to be critical to mitigating the risk of an attack, as well as responding to one.

 advises clients on compliance, transactions, government administrative actions, and litigation involving healthcare, cybersecurity, corporate and securities law, as well as False Claims Act and Dodd-Frank whistleblower cases. She also teaches bioethics at Baylor College of Medicine in Houston. Rachel can be reached through her website, 

What can organizations do to be proactive in protecting personally identifiable information (PII) and protected health information (PHI)?

Tips for protecting the confidentiality and integrity of patient data

Doris Dike is the managing partner of Dike Law Group, a business lawyer for healthcare clients, she works with doctors, podiatrists, nurses, ERs, urgent cares, med spas, hospitals, small independent clinics, rural hospitals, and surgery centers. She can be reached at dklawg.com.

A concierge practice is a direct contract between a doctor and patient where the patient pays for an agreed menu of healthcare services; patients pay a fixed fee, whether the fee is monthly or annually, to receive medical services administered by a provider. The concierge medicine business model is expected to reach $10 billion by 2028 and is expected to continue to expand.

Some providers find concierge medicine appealing because they can spend more time with their patients listening and understanding their needs, offering better care to them. Additionally, in a concierge model, providers manage to earn more despite a smaller number of patients and establish a work-life balance. The idea of controlling work, avoiding provider burn-out, allocating more family time, pursuing personal & professional interests, offers an attractive choice for all providers. But despite this, there are still several legal and compliance hurdles associated with this practice model.

5 Tips for starting a concierge practice

Slideshows

Beware these pitfalls before leaping into concierge medicine.



Bradley Case knows healthcare innovation, with more than 28 years' experience in consumer engagement strategies, clinical model design, and the integration of technology into medicinal practice. The president of The Good Clinic, he also held leadership roles with Estrella Health, Bright Health, UnitedHealth Group, and SymphonyCareTM.

Virtual care – the use of technology to deliver health care – has been part of the patient care landscape for years, but its popularity has surged during the COVID-19 pandemic.

What do people need to know about virtual care? Here are six key takeaways:

6 Benefits of virtual care

Virtual care can be a revelation for patients.

, JD, has practiced law exclusively in the areas of asset protection, risk management and wealth preservation for the last 16 years. He helps protect a national client base with more than $5 billion in personal assets, including several thousand physicians. He is a contributing author to multiple books for physicians and a frequent medical conference speaker and CME presenter. 

money_AdobeStock_435436717.jpeg

In part seven on our going series on the use of trusts by physicians we examine the use of installment sales trusts and how they can provide sellers of businesses and other assets with vital tax deferment options.

A combination of demographics and economic conditions including taxes, inflation and interest rates have created a near record high number of business sales and exits, including sales of medical and dental practices and other related businesses like labs, surgical centers, and office buildings. Sellers are always looking for the next holy grail of tax planning, and 

, not all the strategies you may be pitched are legal and effective and cross the line from legal 

In addition to the capital gains tax exposure sellers face at the sale of a business we are worried about several other“good problems” including both the change in your estate planning that may be required and, you guessed it, asset protection for the proceeds of the sale, when you exchanged a recurring income stream produced by a relatively illiquid asset, like a business, building or medical practice in exchange for a large amount of liquid, 

One proven legal strategy that can help sellers save somewhere between tens of thousands and millions of dollars in taxes is the use of an installment sales trust that one expert I consulted with refers to as an 

* is an experienced transactional law attorney in Phoenix that I often work with on my own clients’ exit planning and who provided detail on the strategy for us. Please do note that the use of this strategy for a 

 (as opposed to labs, medical buildings, ASCs, etc.) is only available in those states that allow non-physician ownership of such practices.

What is a Legacy Installment Trust (LIT)?

 that is established by a third-party Grantor and Trustee prior to the sale of the business and which names third party beneficiaries, like other family members, children etc. who are neither owners of the subject business nor the seller’s owners, members, partners etc. if the seller in the transaction is another business legal entity like an LLC, partnership or S-corp. (all permissible sellers) , and not an individual.

What Are The Steps in a LIT Sale Transaction?

1. First, after the trust is established, the seller “sells” a portion of the business asset and its equity to the LIT. This is an arm’s length transaction for market value.

2. Then the LIT, which has no cash assets prior to the sale, provides the seller with a “note” which guarantees the seller a stream of installment sale payments on specific (and carefully calculated) terms.

3. The LIT then sells the business to a third-party 

and receives the cash proceeds. Those proceeds are then invested, and the principal and investment proceeds are then allocated as required to service the note and make a stream of payments the original seller, allowing them to defer any capital gains tax exposure over the term of the note, a little at a time, as they actually receive the proceeds.

4. Finally, the note held by the seller can also in turn be assigned to a variety of personal asset protection structures available to the seller so that both the original purchase amount and the subsequent income stream are protected from future liability.

5. Using this strategy at the right time, with the right numbers can also create a significant inheritance for the beneficiaries of the trust in an 

 advantaged way that won’t affect your lifetime estate tax exemption.

As always, nothing in a forum like this can ever be legal advice that is specific to your facts, but for well-advised sellers of high value, highly appreciated assets who are willing to act ahead of the sale, this may be a good tax deferral, estate planning and asset protection strategy. We will continue our examination of the legal use of specific trusts again later this month.

*Full disclosure, Alan is a partner at the law firm I am part of

, JD, has practiced law exclusively in the areas of asset protection, risk management and wealth preservation for the last 16 years. He helps protect a national client base with more than $5 billion in personal assets, including several thousand physicians. He is a contributing author to multiple books for physicians and a frequent medical conference speaker and CME presenter. Learn more at 

Understanding the use of installment sales trusts and how they can provide sellers of businesses and other assets with vital tax deferment options.

Trusts 101 for physicians, part 7: Installment sales trusts 

two things every standout healthcare manager does

“There are two specific actions every exceptional healthcare manager should undertake regularly: shadowing clinicians and assessing the patient experience.

Observing the providers will remind the manager of the many challenges related to time which the provider faces: patients who present for a brief appointment but intend to discuss many concerns, time required to order tests, review results, consult other providers, and document.

By requesting permission to “follow” the experience of a few patients per quarter, beginning with their experience of scheduling their appointment, the manager can learn much more than by simply hoping to receive a patient survey and then reviewing the results.”

Come back next week for another Tip of the Week.

Practice tip of the week: Two things every standout healthcare manager does

Drew Waterhouse is founder and CRO of Model Match and Brent Underhill, Strategic Growth Partner at Model Match

It’s no secret that the U.S. population is aging, as is the case with almost all developed countries. In fact, based on the U.S.’s age-sex distributions, it can be classified as the constrictive type of 

. Essentially, the percentage of young people is lower than other age categories and possibly decreasing. While not as drastic as China, Japan and Italy, the U.S.’s population pyramid is still slightly skewed more towards the older ages.

As America’s population continues to age, the demand for assisted living will increase, as well as the need for assisted living practitioners, such as RNs and LPNs. The phenomenon of the inevitable surplus in aged Americans is colloquially referred to as the silver tsunami, with Baby Boomers estimated to make up 

 of the population by 2035. This event will impact every area of healthcare, especially home care and nursing-home care. Plus, Baby Boomers will not tolerate limited access to the best care; likewise, they will want to stay in their homes and communities for as long as possible. Accommodating the older generation will require a massive number of healthcare works. One study estimated that there will need to be at least 

 by 2025, with another report projecting that by 2026, 

 in the U.S. will be healthcare and assisted living.

, and nearly half of all physicians are 55. Their eventual retirement will create a huge vacuum in qualified personnel. Filling the medical-worker gap and supporting the massive influx of Baby Boomers will require a significant overhaul of the current outdated hiring models used by healthcare companies, particularly assisted living.

Recruiting active versus passive candidates

Perhaps the most detrimental factor to healthcare recruitment is that most organizations hire based on an at-need basis. In other words, only active candidates, or those actively applying and immediately available for work, are getting hired. By only sourcing active candidates, organizations unintentionally put themselves at a disadvantage because recruiters must compromise on their skill requirements to fill open roles. Such practices lead to hiring unqualified employees and lower retention rates, which prolongs the high turnover rate cycle.

Still, passive candidates, the opposite of active candidates, are not necessarily superior. However, they do occupy

. Passive candidates are those people who are currently employed and are not actively looking for work but are not opposed nor uninterested in moving to a different role. While passive candidates are not available to start right away, they represent an untouched majority of employees.

Consider the analogy that active candidate recruiting is comparable to fishing with a net, while passive candidate recruiting is tantamount to fishing with a spear. With the former, one is figuratively casting a wide net, and although they may be successful, they must shift through all the mediocre fish until they find the one with gold scales. In the latter, an organization finds the candidates that fit their requirements and then, often as a team, makes a conscious and strategic effort to ‘capture’ that person. Research shows that the best talent is usually off the market 

 - combine that with the inevitable high demand for assistance care workers, its vital organizations have a reliable and efficient means of finding, organizing and recruiting employees. Such a solution exists in the form of a talent management system or recruitment software.

Breaking the cycle of high turnover with recruitment software

Breaking the high turnover rate cycle and preparing for the increased need for staff requires healthcare recruiters, especially in the assisted living sector, to utilize a combination of passive recruitment as well as a talent management system. Such software can streamline the recruitment process and merge an organization’s pipeline and team into one collaborative and virtual space where candidates and current employees can come together on high-priority opportunities.

Additionally, any staff member with clearance to use the talent management software can access, record and edit all notes on individual candidates. Record keeping is essential to passive recruitment as the recruiting process itself can take months. Having all necessary information in one, easily accessible place viewable at any time will permit all recruitment decision-makers to contribute to the final hiring selection. Plus, most systems include reporting software for performance tracking.

Conveniently, many of these solutions can scale as an organization grows, ideal for assisted living as it expands to become one of the largest employers in the country. Moreover, these systems make hiring manager’s jobs easier. Auto-sync helps recruiters stay organized to prevent scheduling conflicts. Similarly, it can send automated notifications about slated interviews and other pressing updates. Often designed with simple interfaces and easy-to-follow directions, talent management systems don’t require the knowledge of an IT specialist to set up or operate.

Today, data and analytics are everything, and recruitment software won’t be enough unless an organization can effectively leverage its own information. Also, it’s critical to migrate data when moving to talent management software, which can be done by importing CRMs or spreadsheets. Nevertheless, once a recruitment system is in place - and an organization has access to valuable insights and analytics, the entire process of sourcing and selecting qualified assisted living workers will be much easier even amid an aging population and the mass retiring of medical professionals.

Drew Waterhouse is founder and CRO of Model Match and Brent Underhill, Strategic Growth Partner at Model Match.

As the population ages, the healthcare workforce must be replenished.

Healthcare recruitment: Planning for an aging population with technology

is the Educational Program Director and a CERTIFIED FINANCIAL PLANNER

 at MEDIQUS Asset Advisors, Inc. He specializes in wealth management solutions

A common question many physicians ask is whether they should be making pre-tax or Roth contributions to their retirement plans. It is not always an easy question to answer. It often requires predicting the future and envisioning your financial circumstances throughout retirement. Is it likely you will still be earning a significant amount of income in retirement from investments or business interests? Will this keep you in a higher tax bracket? Or, will you have more modest income from social security and retirement plan distributions and drop to a lower tax bracket? Both pre-tax and Roth contributions have potential advantages but choosing the wrong one can result in losing some tax benefits. No one wants to make a mistake, and when deciding between the two, there are some key differences you should consider.

First, it’s important to understand the basic concepts of Pre-Tax and Roth accounts. To compare, let’s break each account type down into three phases: the contribution phase, the growth phase, and the distribution phase.

As the name suggests, the money goes into the account pre-tax. For retirement plans offered through work, money is deposited before any federal or state taxes are withheld, hence the pre-tax label. Traditional IRAs have a little more work that needs to be put in before the money achieves its pre-tax status. You deposit money into the Traditional IRA and then when you file your taxes, you take a tax deduction, which makes the contribution pre-tax. (Note: The ability to take a tax deduction from contributing to a Traditional IRAs is phased out at certain income levels if you are a participant in an employer-sponsored retirement plan). Money contributed on a pre-tax basis reduces the taxable income you report to the IRS.

Once the money is in the account, it gets invested and those investments grow tax-deferred. This means you can buy and sell an unlimited number of times without owing capital gains taxes on the sale proceeds. This tax-advantaged feature allows more money to stay in the account and accumulate gains.

Because you received a tax benefit when you contributed to the account in the form of reporting less income to the IRS in the year you contributed, and you accumulated investment gains on a tax-deferred basis, the IRS is eventually going to want their piece of the pie. The IRS is patient, not generous. When you take a distribution from a pre-tax account, you must include the full distribution as income and pay income taxes on it.

A deduction to claim on your tax return, investments grow tax-deferred, and distributions are taxed at your ordinary income tax rate.

With a post-tax account, you are contributing money that has already had federal and state taxes withheld or paid on it, so there is not tax benefit in the year the money is contributed. (Note: The ability to contribute to a Roth IRA is phased out at certain income levels regardless of your participation in an employer-sponsored retirement plan).

Once the money is in the account and invested, the investments grow tax-free. Like pre-tax accounts, you can buy and sell and accumulate investment gains without owing tax on those gains. This allows more money to stay in the account and accumulate future gains.

Since your contributions were made with after-tax dollars, distributions from Roth accounts are tax free, based on current law. You do not have to include them in your reportable ordinary income or pay tax on them, including the investment gain.

No tax benefits the year the contributions are made, tax-free investment growth, and tax-free distributions.

So, how do you decide which type of contribution may be best for you? Contributing to a pre-tax account may make sense if you know or suspect you will be in a lower tax bracket in retirement than you are now. This will allow you to report less income in years you are in higher tax brackets and defer paying the tax until you are in a lower tax bracket when you’re retired. This route can require looking into a crystal ball and trying to foresee your income circumstances far in the future. Will you have business interests, investments, or investment properties that will still pay you a significant amount in retirement? Will this result in you being in an equal or higher tax bracket in retirement than you are now? If so, the tax benefit of contributing to a pre-tax account is greatly diminished.

Alternatively, contributing to a Roth account may make sense if you know or suspect you will still be in a high tax bracket during retirement, potentially due to the reasons mentioned above. If there is no clear tax savings benefit by contributing pre-tax, then tax-free distributions from a Roth account may produce a greater tax benefit. Additionally, tax free distributions from a Roth account may help you stay in a lower tax bracket since they are not counted as part of your income.

Why not consider both pre-tax and Roth accounts? There can often be a benefit to having both types of accounts. It is not uncommon for physicians to have pre-tax money in a 401(k) or 403(b) Plan and have a Roth IRA (using the backdoor IRA process). Having both types of accounts provide options in retirement. In years when you have more modest income and are in a lower tax bracket, those would be good years to take distributions from the pre-tax accounts and pay the tax on it. In other years, if you do have significant income and are in a higher tax bracket, you can take a distribution from your Roth account and avoid owing tax on the distribution. Having both types of accounts provides you the flexibility to choose the account to distribute from that is most advantageous for that year’s tax circumstances.

To determine which types of accounts are best for your individual circumstances, we recommend you speak with your financial professional or CPA.

Jeff Witz, CFP® welcomes readers’ questions.He can be reached at 800-883-8555 or at 

200 North LaSalle Street - Suite 2300 - Chicago, Illinois 60601

312-419-3733 - Toll Free 800-883-8555 - Fax 312-332-4908 - www.mediqus.com

Investment advisory services offered through MEDIQUS Asset Advisors, Inc. Securities offered through Ausdal Financial Partners, Inc.Member FINRA/SIPC ∙ 5187 Utica Ridge Rd ∙ Davenport, IA 52807 ∙ 563-326-2064 ∙ MEDIQUS Asset Advisors and Ausdal Financial Partners, Inc. are independently owned and operated.

Effective June 21, 2005, newly issued Internal Revenue Service regulations require that certain types of written advice include a disclaimer. To the extent the preceding message contains written advice relating to a Federal tax issue, the written advice is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer, for the purposes of avoiding Federal tax penalties, and was not written to support the promotion or marketing of the transaction or matters discussed herein.

The information contained in this report is for informational purposes only. Any calculations have been made using techniques we consider reliable but are not guaranteed. Please contact your tax advisor to review this information and to consult with them regarding any questions you may have with respect to this communication.

MEDIQUS Asset Advisors, Inc. does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Which is the better investment for your retirement funds?