Most people have a great deal of respect for doctors. After all, the individuals who strive to make their mark in the field of medicine go to any lengths to cure you of your illness. However, unlike other professionals, doctors start earning a lucrative income at a much later stage in life. In fact, financial experts say almost all students who qualify for medical school receive their degrees when they are in their late 20s. Even after graduating, they have to undergo clinical training in order become specialists in a particular branch of medicine. The duration of this residency period is usually 3 to 7 years. During this period, they have to work long hours even at night for modest income to make ends meet with Santa Clarita hearing aids.
Financial planning –Important tips doctors need to keep in mind
These financial professionals further state that doctors can continue practicing their profession for a long as they like after becoming specialists in the particular field. However, this also depends upon the state of their health and the reputation they earn as experts in their field. They explain that it is not prudent on their part of such medical specialists to assume that they have a long, lucrative career ahead of them. Financial planning is as essential for them as it is for people in other professions. That is the reason why these experts point out that it is necessary for young doctors to keep in mind the following four essential tips when it comes to managing their finances:
Consider keeping money aside in an IRA Roth Account
Young doctors undergoing clinical training need to remember that it is crucial for them to keep aside money for their retirement at a very early age. In general, these professionals usually earn between $40,000 to $60,000 during this residency period. In many cases, the medical institutions that hire them offer an after-tax Roth 401(k) retirement schemes for their employees. Most prominent financial experts suggest that these young professionals should take advantage of these schemes according to their financial situation. Such a step can help them lead a comfortable life when they are unable to continue practicing medicine because of their age.
Maximize their contributions to other retirement schemes
Apart from investing in the IRA Roth 401(k) scheme, young doctors should take steps to maximize their contributions to other retirement plans. That is to make up for years they could not invest their money while in medical school and during residency. In fact, many medical institutions in the country that hire such experts also offer attractive pensions. They are eligible for such income after working for a specific period in such establishments. These medical experts should take steps to find out their employers have such schemes and participate in them.
When it comes to financial planning for doctors, these experts stress that such specialists should take steps to monitor their credit score. Obtaining high scores on Fair Isaac Corporation index (FICO) makes them eligible to seek loans from various financial institutions. That is because such scores indicate they have low credit risk and are likely to make timely repayments on the money they borrow. It is vital for them to know that obtaining lucrative remunerations does not mean they are possible to get high scores on this credit index. They need to prove to their lenders that tend to make prompt repayment on their dues.
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