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PHYSICIAN
RETIREMENT

The Financial

Basics of

Preparing for

Retirement

By Michael Clark

How we spend our retirement is an extremely ability of achieving your goals. Adjustments can then be made in
personal and emotional matter. how much you save or how you are investing to increase your prob-

We’ve seen the television commercials of the gray-haired couple re- ability of success.
tiring to their vineyard or sailing in their yacht on the beautiful
Mediterranean Sea. While appealing, those are really not the goals of Adjust your portfolio to the right risk level – finding the com-
most hard-working Americans. However, regardless of your unique fortable balance between risk and reward can be challenging. We all
goals, there are very specific steps that almost everyone should take in want lots of upside without the risk of big losses. Some investors think
the years leading up to the transition to retirement. We are going to they shouldn’t own stocks once they retire but they forget their time
lay out these steps in bullet format below but want to provide you with horizon doesn’t end on the day of retirement but goes for the rest of
a warning first. Many people will feel inadequately prepared or over- their life. There are now many strategies and investments designed to
whelmed by how much there is to consider when reviewing these bul- provide access to meaningful returns while protecting your irreplace-
lets. Instead, maybe you can be encouraged by the steps you have able capital from catastrophic losses.
already taken and be glad to learn about other important steps that
will help you further prepare for retirement now rather than once Consider tax diversification – generally, we all agree that diversi-
you’ve already hung up your spurs. So, here goes… fication of investments in a portfolio is wise but not many people con-
sider tax diversification. If future tax rates are unknown, then it may
Save enough money – this seems abundantly obvious but the make sense to have some taxable investments (taxable now), some tax-
process for determining the appropriate amount can often be am- deferred investments (taxable later) and some tax-free investments
biguous. There are certain analytical tools available that incorpo- (taxable never).
rate historical market performance, inflation, varying income
streams such as pensions and inheritances, different account types Understand your insurance – a thorough audit of your insurance
such as IRAs and Trusts, to help determine the mathematical prob- coverage may help you eliminate unneeded policies, reduce your costs

16 SAN ANTONIO MEDICINE • April 2021