6 Simple Ways Independent Contractor Physicians Can Secure Retirement Funds Early
As an Independent Contractor Physician, when you are at work, you are in complete control. In order to obtain that same complete control for the rest of your life, you need to first take a hard and detailed look at your finances. This means understanding how you’re making your income, how it’s being paid to you and what you’re really spending it on. There are several ways to increase the amount of money you keep from your income, which can result in you actually working less to earn the same amount of money. These six tips to better understand and get a handle of your finances as an Independent Contractor Physician can and will work for any level of the profession, no matter the length of time you’ve been practicing.
Be Responsible About Your “Play Money”
With some young doctors, it seems that purchasing expensive homes, cars, boats and other toys takes precedence over saving for a rainy day. For a young physician starting out in a specialty with an early burnout rate, this is especially dangerous. Imagine if you actually kept an extra 15% of your income from each check? Sure, it could make paying for these fun assets easier, but it will also help you build up those savings for your secured retirement fund.
Become Your Own Employer
Whether you’re the owner and/or partner of a practice, an Independent Contractor Physician or an employee, the first step of taking control of your taxes is changing your compensation structure. Becoming your own employer can be as easy a forming a physician corporation or an LLC. This allows you to lower your taxes, pay some expenses directly from the business and collect dividends on the profits.
Pay Yourself First
As the owner of your Physician Corporation, you get to determine how you compensate yourself. By paying yourself first, you can control the funds that will go into your retirement accounts. These funds are not taxed until you actually withdraw the money to spend it, so by putting as much as possible into tax-advantaged retirement accounts, you are effectively reducing the amount of income taxes you will pay annually, in addition to reducing your payroll tax expenses overall.
Everyone must pay social security and Medicare taxes. What everyone does not know is how easy is it to overpay for them. By reducing your physician salary to one that is more reasonable, you can reduce the Medicare taxes you pay and eliminate the additional matching portion that your Physician Corporation would pay as well. For years, citizens have been asking for the ability to invest their own social security funds, because very few believe those funds will be available when it’s time to collect. The professionals of My Pro CFO can show you how to make that reality happen today.
The Physician Pension is not only the tool that will single-handedly reduce your income taxes by nearly $50,000 a year, but it will also dictate how many years you work, how many hours you work each week and even give you the flexibility to retire after just 15 to 20 years of work, rather than the typical 30 years. Your Physician Pension allows you to pay a business expense which can allow you to take a salary of up to $195,000 each year in retirement. As an added incentive to take advantage of a Pension Plan, retirement plans are exempt from a civil judgment in most states in the U.S. This means that not only would you be adding to your net worth, but your Physician Pension protects your assets as well. We help you build the right plan of action so you can take advantage of this highly cost-effective asset protection strategy.
Hire Your CFO Pro
You have gone to school for several years, completed internships, residencies and perhaps even several fellowships to obtain the level of expertise you possess. When it comes to establishing your Physician Corporation and setting up your Physician Pension, you will want to make sure that you are working with a Physician Business Manager who has the expertise you require. What you want is someone thorough and detailed, not a document filing service and/or a broker who is looking to sell you a product or service. You want to work with someone who will actually manage your assets for your well–being and future financial goals.
Keep in mind that the ideas discussed above are just a sample of the various tax savings that are available to physicians like yourself. You work hard for your money so to take make sure you’re minimizing your tax burden and making the most beneficial choices for your future, you should work with a highly skilled and well-trained professional. We take care of the areas of business you hate to do, so you can do what you love to do.
My Pro CFO, LLC, is a business management firm providing the highest level of service in three key areas of importance to Independent Contractors Physicians, attorneys, and small business owners. We specialize in corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. We will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make sure all bills are paid and necessary tax forms and withholding payments are made in a timely manner. In addition to these services, we also set up and manage your retirement accounts so you have one less thing to worry about. To get set-up with your Pro CFO, or to simply learn more about our services, visit our website at www.mypro-cfo.com.