The Alemian File: The Physician's Retirement Plan

In 2014, the AMA Insurance Agency reported on the financial preparedness of employed US Physicians. The report shows the number one concern for all physicians is providing a comfortable retirement for themselves and their spouse or partner. The number 2 concern is funding long-term health needs for themselves and their spouse or partner.

In my last article, you learned about the 7 Retirement Killers. Any one of these can completely kill your retirement; any combination of them and you absolutely will run out of money in retirement.

They are as follows:

1. A late start to saving due to a late start in your career

2. Taxes

3. Inflation

4. Major medical illness

5. Stock market losses

6. College tuition for your children

7. The death of a breadwinner

Here’s the good news, I’m now going to show you how to protect yourself from all 7 of the retirement killers.

Let’s start with this concept: You financed your medical education, you financed the purchase of your home, and you financed your car. Most large financial undertakings are financed. Why not finance your retirement?

We’re going to do this by combining the power of leverage and insurance.

Take a look at this diagram.

1: A 40-year-old physician desires to start a retirement plan.

2: Utilizing an $80,000 letter of credit as collateral, the physician takes out an $823,403 bank loan. The money is to be put into an investment grade life insurance policy over a 7-year period.

3: Over the next 7 years, $117,629 per year is transferred from the loan into the life insurance policy—for a total of 823,403.

4: The cash value in the life insurance policy grows tax-deferred.

5: In the 12^th and 13^th year of the plan, the loan principal and the accrued interest are paid back from the cash value of the life insurance policy.

6: At age 65 the physician enjoys a lifetime income of $160,000 per year tax-free from the life insurance policy in the form of policy loans. That’s $160,000 net tax-free every year for life.

What I’ve just given you is a plan that will protect you from all 7 Retirement Killers. You may have noticed that this plan is done without any out-of-pocket money. Can the plan be made bigger to provide even greater income? Yes, depending on your particular situation it can be designed to equal or exceed the income of your working years.

So how safe and financially sound is this plan? A friend of mine who’s been in the banking and finance business for over 40 years told me, it’s the safest kind of loan that a bank can make.

Remember the AMA Insurance Agency report showed the number one concern for all physicians is providing a comfortable retirement for themselves and their spouse or partner. The number 2 concern is funding long term health needs for themselves and their spouse or partner. This plan addresses these concerns and provides a solution that works.

You probably have a lot of questions, so send me an email with your questions. I’ll help you by giving you the information that you need to create the retirement lifestyle of your dreams.

In the coming episodes, I’ll cover each of the 7 Retirement Killers in depth. In each episode I will show you how this plan will protect you from every one of the seven retirement killers.

Visit my websites TheAlemianFile.com along with PhysiciansMoneyDigest.com and make sure you come back here next week to Physicians Money Digest for the next edition of the Alemian file.

Email: David@TheAlemianFile.com