Invest for Longevity to Assure Your Security

As average life spans continue toincrease, you need to make sure you havethe financial assets to address the longevityrisk. "When you get to [age] 65, you shouldexpect to live another 30 years," says PhilipEdwards, managing director at Standard &Poor's. In order to manage this risk, individualsshould make sure that they can rely ondiversified income streams.

Doctors also should make sure that whenthey leave their place of employment (ifstock options were a part of their compensationpackage), they take a lump-sum distributionof stock and pay ordinary incometax on the shares' cost basis. If you don'ttake the lump sum, the unrealized appreciationwould then face the long-term capitalgains rate when the shares are somedaysold. Doctors should also be prepared for theemotional hurdles such as the reluctance tobegin drawing from their retirement assetsfor fear of running out of money.