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Retirement Plans at Your Medical Practice: Investing in Staff


I may not be able to follow my initial path to retirement, but having a financial plan for me and my practice staff puts us all in the right direction.

While my husband and I had once dreamed of retiring by age 50, we both realize that unless we win MegaMillions, that dream just won’t come true. We still have kids to send to college, bills to pay, and if we’re lucky, a couple more decades of living. While there are people who work for the government or the utility companies who will receive a pension and lifetime medical benefits, the self-employed must plan ahead for the "golden years." And the way things are going, they will cost more than gold.

As such, we have always been trying to put money away for retirement. It was much easier when I was an employed physician. One of my benefits was a 403b. Then, as I made a little money on the side answering marketing surveys and giving lectures, I also opened a SEP. Any extra money got squirrelled away for the future.

As a private practitioner, for the first two years, there was no retirement plan. There wasn’t enough money to put aside. And if I were to create a retirement plan, I would have to contribute not just for me, but for the staff as well. Fortunately, the practice did, so we were able to offer a retirement plan last year. However, my accountant informed me that for this tax year, we would be better served by opening a different type of plan.

I am not a financial expert in any way. Running the practice, the day-to-day expenses - that pretty much stretches my limits as it is. Trying to figure out the ins and outs of various retirement plans was (is) really too much for me. It doesn’t help that the rules keep changing. My accountant has really been instrumental in helping me set things up.

Despite the extra work involved, there are several benefits to having a retirement plan. Of course, there is the obvious personal benefit of being able to save money for the future. In addition to that, there is a tax benefit to the practice. It also makes for happier employees. Although it may not add to their paychecks now, they know that I am putting a little extra money away for them. It will hopefully encourage staff loyalty.

I still won’t be able to retire by 50 (that age looms closer and closer), but at least, by putting some money away now, I’ll be able to do so while I can still enjoy some work-free years. I’d still like to win the Mega Millions, though.

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