Financial Clarity for Doctors

Save Taxes With a Cash Balance Plan

In this episode, Corey and Rachelle breakdown cash balance retirement plans.  What are they and are they a good fit for you?

What the heck is a cash balance plan?

• Another pre-tax retirement plan, meaning you do not pay taxes on the money you deposit now, but you do pay taxes on withdrawals in the future.

• Many pre-tax retirement plans are defined contribution plans (401k, IRA, SEP) meaning that there is a specific contribution amount.

• Cash balance plans are different because the goal is to provide a “defined benefit” similar to an old-school pension.

• Many people terminate the plan and roll the balance into an IRA instead of using them like a pension.

 

You can potentially put a LOT of money into them, but you can’t set them up just anywhere.  A cash balance plan may be a good fit for you if:

• You are self-employed and want to contribute more to retirement than the IRS plan maximum for a 401k or SEP IRA.

• You are a business owner who wants to contribute more to retirement AND you don’t mind setting aside some funds for your employees as well.

 

There are lots of rules with these and costs as well.  It can be a great way to save a lot of money for retirement while saving on taxes, but proceed cautiously and learn as much as you can first.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

 

Lessons from a Retired Surgeon

This episode is an extra special one where Corey interviews his dad, Dr. Kenneth Janoff, a retired surgeon about his career in medicine and achieving financial independence. 

He shares stories from growing up in New Jersey, going to medical school at Temple University, what it was like transitioning from med school in North Philly to residency in Portland, OR in the late 70’s. He shares his experience starting his own practice straight out of fellowship and successfully running that practice for over 30 years.  They also talk about how medicine has changed over the past four decades.

They get into what started his interest in business and investing, some of his investment successes (and misses), contributing factors to achieving financial independence (such as prioritizing saving and investing early on), and offer advice for how to prepare for an enjoyable retirement.

He wraps up the conversation with a story about getting disabled midway through his career (fortunately it wasn’t permanent) and the importance of disability insurance. 

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

Blog: 5 Steps to Achieving Financial Independence

In this week's blog, we list five important actions to take in order to become financially independent one day.  

Our weekly blog posts that can be found at www.theFinityGroup.com/blog, where you can also sign up for our newsletter to have our weekly blog post delivered directly to your inbox.

Investing When Markets Are Down

How to Approach Investing When Markets Are Down

In this episode, Corey and Rachelle take a slightly different approach to talking about the stock market this year.  There have been many ups and downs over 2022, but as investors, how do we deal with that volatility?  What should we do differently, if anything?

In some situations, doing nothing is the best option:

• First, unless you have a specific reason to do so, now is not the time to exit the stock market. Selling investments when they are down locks in losses.  If you are a long-term investor, it’s unlikely that makes sense for you.
• Quit looking at things every day! We all know things have been messy this year.  Looking at your accounts every day will not change that, but will increase your stress level.  You should be reviewing your accounts every few months, but for long-term investors it is generally not necessary to do that daily.

 

There are a just a couple more proactive things you can consider as well:

• You may want to consider rebalancing back to your original target allocation. When the market is volatile, your allocation can become very skewed to any areas of the market that have outperformed relative to others.  Not the same as selling out of your investments entirely.
• Think about investing “extra” money you have on the sidelines. If you are sitting on money you do not need in savings (NOT your emergency fund) put that money to work for you.  This is always true, but especially so when the market is down.  Treat this like a sale on investments.
• If you have money in a taxable brokerage account, you can also consider doing some tax-loss harvesting. More on this topic was recorded in Episode 29 on Tax Loss Harvesting.

 

If the market is making you nervous, do your best to avoid the constant doom and gloom financial reporting.  And keep in mind your time horizon.  If you are not retiring for 20 or 30 years, it doesn’t make sense to stress out a bunch about the stock market right now.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

 

Blog: The Power of Compound Interest

In this week's blog, we discuss the power of compound interest, how it can benefit you if you get it working in your favor, and how it can potentially hurt you if you get on the wrong side of it.  

Our weekly blog posts that can be found at www.theFinityGroup.com/blog, where you can also sign up for our newsletter to have our weekly blog post delivered directly to your inbox.

Blog: How to Start an IRA

In this week's blog, we discuss what an IRA is, benefits of using one for retirement savings, and how to set one up.  

Our weekly blog posts that can be found at www.theFinityGroup.com/blog, where you can also sign up for our newsletter to have our weekly blog post delivered directly to your inbox.

Adjusting to Rising Interest Rates

If you watch the news or have tried to borrow money any time recently, you know interest rates have increased A LOT this year.  New mortgages 30-year fixed mortgages are averaging more than 7%.  Drastically different from the 2.5-3.5% you could get during covid.  In this episode, Corey and Rachelle ask, “what should we do differently?”

It’s not all bad news!

• High-interest savings accounts have variable interest rates.
  • If you don’t have one yet, you can set one up and likely get a 3% annual yield or more.
• Bond yields have also increased dramatically. More conservative investments now have more to offer.
• If you have an existing fixed-rate-mortgage, your home payment is much more affordable than it would be if you had to take out a similar-sized loan today.

 

New and variable-rate debts are the challenge.

• If you are in the market for a new home, you may need to adjust your budget or save a larger down payment.
  • Run the numbers to see what fits in your budget and try not to stretch yourself too thin.
• Review your existing debts to see if any other items have a variable interest rate, and try to pay them off if the rates are getting too high.
  • This can include home equity lines of credit and even private student loans.
• Prepare yourself if you have an Adjustable-Rate Mortgage. Educate yourself on when your rate can increase and how much it is allowed to increase.
• When thinking about new purchases, find out what your financing options before deciding to buy.
  • It will be much harder to come across low interest financing.
  • It may make sense to purchase more things in cash or even delay large purchases.

 

When things change, sometimes we need to adjust our plans and expectations.  Review your own finances and goals to see if you can adjust anything to make your situation better.  If you have questions, email us at podcast@thefinitygroup.com.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

 

Blog: Should I Get Disability Insurance as a Resident?

In this week's blog, we discuss the pros and cons of securing disability insurance as a resident or fellow.  

Our weekly blog posts that can be found at www.theFinityGroup.com/blog, where you can also sign up for our newsletter to have our weekly blog post delivered directly to your inbox.

Long-Term Care: What It Is and Do You Need It

Once in a while, we have to “eat our vegetables” and talk about insurances.  In this episode, Corey and Rachelle tackle long-term care insurance in recognition of long-term care insurance awareness month.  Insurance conversations almost always revolve around things we would rather not think about, and this is no different.  But most of us will have to deal with aging, and a lot of us will have to deal with the increased costs that can come along with that.  Ignoring it won’t help!

So, what is long-term care?

• Medical and non-medical assistance to help a person unable to perform some or all activities of daily living. This could be at home or in a facility.
• It can be VERY expensive.
  • Can live for a long time after needing care.
  • A private nursing room costs an average of almost $8,000 per month.
• Seventy percent of people aged 65 or older, will need long-term care during their lifetime.

How does insurance for long-term care work?

• Usually, cannot get unless you are fairly healthy.
• Generally, set up with a maximum monthly benefit and/or lifetime coverage amount.
• Sometimes includes inflation protection, but not always.
• Can be an add-on feature to life insurance, can be a shared policy with a partner or an individual policy.
• Cost can potentially change after time, even after you have a policy.

Should you get long-term care insurance?

• Age is one consideration. Most policies only offered to those who are 40 or older.  If you get too early, you may pay a lot for the policy over time.
• Wealth is another.
  • For those who have saved a great deal and expect to have more money than they need to retire, you likely don’t need coverage, but may want it to protect that wealth for your heirs.
  • If you have very little resources in retirement, you may qualify for need-based-aid (Medicaid), but you basically have to be destitute to qualify.
  • For those that are in between, you may need some support to be able to afford long-term care without completely depleting your resources.

This is a complex topic and a complicated insurance product.  Do lots of research when looking into this, and as always, let us know if any questions come up.  You can always email us at podcast@thefinitygroup.com.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

Blog: How to Invest in a Bear Market

In this week's blog, we discuss strategies for investing when the market is down in value. 

Our weekly blog posts that can be found at www.theFinityGroup.com/blog, where you can also sign up for our newsletter to have our weekly blog post delivered directly to your inbox.