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White Paper 10.28.08

White Paper 10.28.08

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Published by jewilsonadvisors

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Published by: jewilsonadvisors on Apr 15, 2010
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05/20/2010

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From Uncertainty to Confidence
 The Transition to FinancialIndependence
A Special White Paper for PhysiciansBy James E. Wilson, CFP
®
 
CONTENTS
PAGEINTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . .1 THE CHALLENGE . . . . . . . . . . . . . . . . . . . . . . . .1INVESTMENT TRUTHS . . . . . . . . . . . . . . . . . . . .4 THE RIGHT MEASURE . . . . . . . . . . . . . . . . . . . .7 THE SET-UP TO RETIREMENT . . . . . . . . . . . . .10 THE MOST IMPORTANT . . . . . . . . . . . . . . . . . .11ELEMENTSABOUT US . . . . . . . . . . . . . . . . . . . . . . . . . . . .11ABOUT WEALTH RX
®
. . . . . . . . . . . . . . . . . . . .13INTRODUCTIONWHITE PAPER FOR PHYSICIANS
From Uncertainty to Confidence – The Transition toFinancial Independence
 THE CHALLENGE
Challenges Physicians face in planning for retirement
INVESTMENT TRUTHS
Science and Saving
 THE RIGHT MEASURE
How much risk is “enough” to reach your financialindependence goal?
 THE SET-UP TO RETIREMENT
 The “setup” period needed before the first phase of retirement commences
 THE MOST IMPORTANT ELEMENTS
Here are 5 final keys to retirement planning and financialdecision making.
From Uncertainty to Confidence – The Transition to Financial IndependenceBy James E. Wilson, CFP
®
©Copyright 2008 J.E. Wilson Advisors, LLC. All rights reserved.No part of this publication may be reproduced or retransmitted in any form or by any means, including but not limited to, electronic, mechanical,photocopying, recording or any information storage retrieval system, without the prior written permission of the publisher. Unauthorized copying may subject violators to criminal penalties as well as liabilities for substantial monetary damages up to $100,000 per infringement, costs and attorneys’ fees. The information contained herein is accurate to the best of the publisher’s knowledge; however, the publisher can accept no responsibility for theaccuracy or completeness of such information or for loss or damage caused by any use thereof.2431 Devine Street, Columbia, SC 29205 w Phone: (803) 799-9203 w Fax (803) 254-4474 www.jewilson.com
 
1
INTRODUCTION
 THE FINANCIAL BENEFITS OF PRACTICING MEDICINE HAVE DIMINISHED SHARPLY OVER THE PAST DECADE. Physicians in their 40’s, 50’s and 60’s are facingunprecedented challenges to achieving long term financial independence.As retirement moves closer, the margin of error becomes smaller and smaller. Today, many physicians are far less confident than in previous times about being ableto maintain their lifestyles throughout retirement. Our objective throughout this paperis to address these very real risks unique to physicians and how they can be solved.
 THE CHALLENGE
 TRANSITIONING FROM THE RETIREMENT MODEL OF THE PAST TO A FRAMEWORKKEYED OFF OF FINANCIAL INDEPENDENCE WHERE WORK IS OPTIONAL –MENTALLY,PROFESSIONALLY AND PERSONALLY REQUIRES DEFT TIMING AND ACUMEN. Today,many physicians are finding it necessary to work to a later age than was typically thecase even a decade ago. The combination of longer life expectancy and a moremobile retirement create unique challenges.
More complicated family relationships (support for agingparents or problematic children) and professional,business or investment mistakes along the way all add upto additional pitfalls. Many physicians retiring today intheir mid 60’s will live beyond age 90. Financially speaking, planning for a 25-35 year retirement ischallenging.Over the past decade, many physicians have seen theirpersonal incomes decline by significant percentages.Cardiologists, gastroenterologists, anesthesiologists andothers have been particularly hard hit. A physician whohas enjoyed a $500k/per year income for many yearsgenerally finds it very difficult to adjust his lifestyle enoughto accommodate a new income of $300k/per year or so.Of course, this leaves less to save which impacts thefuture. Most physicians have historically done a good jobof saving within their tax qualified retirement plans but arenot as disciplined in saving/investing outside these plans.
In most cases, the capital accumulated within the retirement plans will not provide a sufficient income stream for the 25-35 years of retirement that may be needed.
Physicians as a group are skilled at working andearning income. Transitioning to a period of not workingand not earning income (but rather withdrawing) canprove daunting.It is our experience (25+ years working primarily withphysicians nearing retirement) that most physicians overage 55 are entrepreneurial and independent. These arenot qualities particularly revered in the large corporatemedical practices of today. The rapidly changingprofessional landscape has led to an increasing likelihoodof serious and long lasting mistakes. Changing practices
FROM UNCERTAINTY TO CONFIDENCE • THE TRANSITION TO FINANCIAL INDEPENDENCE

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