As business owners in the health and medical profession, you have to wear different hats throughout the day. This includes caring for your patients, managing employees, approving purchases, and dealing with anything that comes up on a daily basis. You also have to carve out time for family and friends. With all the competing interests in your life, it’s easy to neglect wealth management.
However, it’s crucial to build and protect your assets and lay a solid foundation for your future professional goals and personal dreams. So, what should you do? Let me outline how you, as a dentist or health professional, can build your wealth and minimize risks on the way to a prosperous retirement.
Start Early, Start Small
If you are a young dentist or doctor, focus on incorporating your business, which can help you realize significant tax savings.
As you grow your practice, it’s important to consider what types of insurance can protect your business, beyond those mandated by your professional association. You should really think about subscribing to disability and overhead insurance to cover your monthly business expenses in case an injury or illness impacts your ability to work.
On the personal side, setting up a budget can help you allocate funds to pay down any remaining student debt and start an investment strategy for a home or accomplish other financial goals. Once you get married and start a family, you might want to turn your mind toward expanding your insurance to include life coverage that will provide for your loved ones in case of the unthinkable. (I know… not something we really want to think about at a young age).
Balance Your Medical or Dental Practice and Savings Goals
In addition to continuing to build on the goals above, there are other things dentists and health professionals approaching mid-life should consider. In addition to saving within your corporation, your retirement planning might include maximizing investments in tax saving strategies such as Registered Education Savings Plan (RESP) and a Tax-Free Savings Account (TFSA). An Individual Pension Plan (IPP) or a Personal Pension plan (PPP) could also be an eye-opening strategy to consider.
Insurance-wise, this is also a great time to shop for critical illness insurance and convert your current term life insurance into a permanent life one, which offers better coverage for your family plus can offer significant investment and tax savings opportunities. When choosing your life insurance, always keep in mind your family’s health history and the risks it represents for you. This might help you make a better choice of product and coverage when the time comes.
Preparing for Early Retirement
As you prepare to retire early and enjoy more leisure time, you first need a business succession plan that prepares the way for a smooth exit strategy. It would be a good time to review existing estate planning strategies, which may prompt an update to your wills and protective mandates (power of attorney).
There are many creative ways to reduce the tax impact upon death, thus ensuring you maximize the wealth transfer to your next generation(s) or leave that one last big donation to your favourite philanthropic organization.
It is also a great time to look at your retirement savings plan and make any adjustments that reduce your risks and help you save money on taxes.
If there’s anything that these uncertain times have shown us, it is that it’s never too early to get started on growing and preserving your wealth. As a senior advisor of The St-Georges Group with Assante Wealth Management, I can help you build a solid strategy for whatever stage in life you are at.
As your business grows and your life evolves, my team and I will work with you to adapt your wealth management strategies and products to your new reality to continue growing your wealth and your business.