Picturing Yourself in Retirement

Wall Street Journal

At Stanford University, researchers are studying an innovative way to convey the importance of planning for the future, according to a fascinating report from spring.

This approach may be a tool to help reverse a troubling trend. According to the Center for Retirement Research at Boston College, 51% of American households are at risk of being unable to maintain their standard of living in retirement, up from 43% in 2004. The center estimates that savings shortfall at $4.2 trillion, or roughly $120,000 per household at risk.

Special challenges for physicians

Unfortunately, high-income professions are not immune from this trend — and in fact, physicians face challenges that ordinary retirees will not. According to the American Medical Association, physicians have unique financial concerns, including an average debt of nearly $160,000 to repay for schooling, as well as an average insurance burden that can reach $100,000 each year. For some specialties, those costs are higher. Further compounding the challenge: physicians in private practice cannot rely on a corporate retirement program or defined pension plan.

To confront these realities, physicians can begin by visualizing, as precisely as possible, what their future may look like. And, while they won’t have access to Stanford’s virtual reality technology, doctors who can visualize what they want in 20, 30 or 40 years can better plan for that future.

Will you — and for how long — work?

Do you plan to retire? If so, when? Do you see yourself becoming a long-term employee of a private practice or a hospital? Do you have an interest in administration? Will you teach, take a sabbatical or seek part-time hours later in life?

Take time to consider your future career path in some detail. The answers to questions like these may affect how you plan for retirement, your risk tolerance, and the types of investments and planning necessary to accommodate the path you envision.

What does your retirement look like?

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Some doctors look forward to having the freedom to explore a hobby or second career. Others want to travel or spend time with grandchildren. While commercials and advertisements offer up a mythic vision of retirement, it is critical for each individual to visualize their personal retirement lifestyle. A clear vision can help you establish timeframes, realistic savings levels, and, again, the most appropriate investment strategy.

What do you hope to leave behind?

Many of us entertain the idea of “How will I be remembered?” It’s a crucial question, because you can’t plan for your legacy until you envision what you want that legacy to be. It could be seeking to ensure a level of financial security for heirs, charitable giving, establishing a scholarship at a favored institution — the list goes on.

While the Stanford University visualization technique clearly held some simple shock value for young people, it also reinforces a core principal we share with clients: financial planning should be used as a tool for living life, and we should not live our lives to serve the dictates of a financial plan.

Visualizing the life you want is the first step. The next step: work with an experienced advisor you trust to map out a clear strategy for investment, retirement and estate planning. Establishing a clear path not only enables you to achieve your life goals — it also provides some peace of mind.

Financial Planner and Registered Financial Consultant with Braverman Financial Services in Lancaster, Pa. He can be reached at

is a Certified

. Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC.

rich@bravermanfinancial.com

Richard Braverman

Using virtual reality and technology, the researchers are showing young adults of today their actual physical appearance and financial position as it may be in the year 2057. The Stanford team has found that providing young people a virtual glimpse of themselves in retirement “can transform their urge to spend for today into a willingness to save for tomorrow.”Once you have a clear vision of your legacy, you’re better prepared to tackle the estate planning process — a process critical to preserving the assets you’ve spent years accumulating.