Hey, Doctor, Can You Spare a Dime?

Physicians are undoubtedly well-compensated, regularly appearing among the top-earning professions in any internet “listicle” you can find. The idea that most physicians are “wealthy,” however, can be a major misnomer.

If you’re like many, you probably spent the first quarter of your career digging out of medical school debt, the second quarter establishing yourself and perhaps buying a house, starting a family, or starting to build your retirement nest egg. If you’re approaching the second half or even the fourth quarter of your career and looking toward retirement, you may be interested in helping support others, give to charity, start a trust, or help out grandchildren or adult children. Here are some outside-the-box things to keep in mind about giving.

You may know the benefits and important of college savings plans, but have you ever thought about purchasing a life insurance plan for your grandchildren? It’s not as exciting as an XBox and may go over like a lead balloon. But it is a gift that will never wear out or go out of style, it has accumulation potential (and a loan can be taken against it in most cases), there are significant tax advantages to buying one, premium rates are generally very low. Most importantly, it’s a gift that, when your grandchildren are older, they’ll appreciate beyond anything else you could give them. If you’re happy with your life insurance, talk to your representative about this option the costs involved, and the implications for your own retirement savings.

Giving to charity always feels great, and the tax deduction often doesn’t hurt, either. But did you know that you can establish a charitable trust that gives you an immediate tax deduction and provides your beneficiaries with income for a period of years or for life? There are many ways to set up charitable trusts and many different requirements and abilities of each. Talk to your financial or tax advisor to make sure you optimize your giving, both for your current tax liability and for the future liability of your beneficiaries.

If you have a favorite charity you give to regularly, have you considered a gift annuity? This is a contract in which you transfer cash, securities, or other assets to a charity, which then agrees to pay you or your beneficiary a fixed lifetime income. Like all annuities, gift annuities can be a little complicated; thus, they shouldn’t be part of your plans unless you have a firm grasp of the concept or a trusted advisor to guide you through the tax implications.

The desire give back and serve others is part of the DNA of many physicians. There are many ways to do so, and some that meet your personal goals while also providing some tax relief. There are many more. Talk to your financial advisor or retirement provider about other ways to give back.