Approach Social Security with Awareness

Rising malpractice premiums anddeclining insurance reimbursementsare making the economicsof medicine tougher. As a result, a numberof physicians expect to retire early. Butthere's a difference between expecting toretire early and planning to retire early.

This difference could explain why manydoctors today are working longer thanthey expected, according to a 2004 studyby the Lewin Group and the SoutheastRegional Center for Health WorkforceStudies. No doubt, some physicians lovepracticing medicine and couldn't imaginegiving it up for endless rounds of golf.More likely, many doctors fail to appreciatethe daunting financial challenge posedby retirement until it's too late; they needto keep working just so they can put awaymoney for when they stop.

Retirement Reality

Their idea:

The challenge is growing more complexevery year. Consider the debate overSocial Security reform. Supporters ofreform relish the idea of letting Americanworkers invest at least a portion of themoney they now contribute to SocialSecurity. Certainly, savvyinvestors should do better than the governmentat generating returns.

However, critics worry about the highcost of switching to a new system. Theyargue that a system of private accountsshifts too much risk to the individualinvestor. If you've been following thedebate, you shouldn't lose sight of animportant point: The average doctor inthis country already shoulders plenty ofrisk in planning for retirement.

Social Security will do little more thankeep you from living out the goldenyears in poverty. Doctors who want acomfortable retirement must takecharge of their future.

Certainly, many retirees today are livingwell without having invested much ofanything along the way. But these menand women worked at a time when mostUS companies offered generous pensionplans. They are reaping the benefits ofthat largesse.

Monthly Pittance

Social Security makes up about 39%of total income for senior citizens in theUnited States, according to 2004 statisticsfrom the Social Security Administration(SSA). Only about one in fiveseniors relies entirely on their SocialSecurity payments.

I'm not surprised by these statistics.You won't be either after you find outhow big of a check goes out to the averageretiree each month. According toSSA figures from December 2004, theaverage check is $955. That amounts toless than $12,000 a year.

The key question to ask about the currentSocial Security debate shouldn't be"What should the government do aboutSocial Security?"Instead, today's workersshould be asking the question, "Whatcan I do right now about funding myown retirement?"

Whether or not they call for the creationof private accounts, most scenariosfor reforming Social Security involvereduction in future benefits. The currentdebate hinges, in part, on how well privateaccounts will replace income lost tothose benefit cuts.

If you plan to rely only on SocialSecurity after you retire, forget aboutindulging your grandchildren, enjoyingan anniversary cruise in the Caribbean,or hopping on a charter bus to AtlanticCity. You'll be too busy seeing patientsand clipping coupons.

is a

principal of Braverman Financial

Associates in Lancaster, Pa, a

registered broker/dealer and

member NASD and SIPC. Mr.

Braverman has more than 20

years of experience in the industry and welcomes

questions or comments at 717-399-4030 or

rich@bravermanfinancial.com.

Richard M. Braverman