Five Questions to Consider Before Retiring

Wall Street Journal

Are you ready to give up a steady paycheck yet? Although the idea of retiring sooner rather than later is very tempting to many physicians, there are several factors to consider. The asks prospective retirees to ponder the following five questions before making this important decision:

•Do I need help? If you do not have the expertise, interest, or time, physicians should seek the advice of financial experts to help with managing retirement accounts beyond initial planning.

•What are my retirement expenses? Deciding your annual needs determines how much you can safely withdraw. Create a detailed list of the basics (eg, bills, health care, and food) and dreams (eg, trips and retirement business plans).

•Is this the right time? Every additional year that you work adds to your retirement nest egg, whether an IRA, 401(k), Keogh, or even Social Security. The minimum age to begin taking distributions penalty-free also varies.

•What will I do with my nest egg? Other than living expenses, physicians need to determine if they would like to leave some money to family or charity or prefer to spend it entirely.

•Which account should I tap first? Retirees need to develop a strategy to determine which tax route is best for them. Focusing on only the short term exposes your retirement accounts to bigger tax bites than necessary.