5 Strategies for Physicians to Protect Their Income
As a doctor with a steady and high-paying income, protecting your wages is vital. You may not ever worry about not being able to pay your bills. After all, you don't see anything happening to you or your job. But unfortunately, you never know.
You could get injured, lose your job, or decide to switch careers. These are only a few reasons why you must protect your income. If you're wondering which steps to take to do that, read on:
1. Malpractice Insurance
As a doctor, having malpractice insurance is imperative. You can get malpractice insurance through a private company, your employer, or an organization. There are two kinds of liability insurances: occurrence policies and claims-made policies.
With a claims-made policy, you're covered only if your policy is active when the accident takes place. And, it must also be in effect when filing the lawsuit.
With occurrence policies, you get covered regardless of whether the policy lapses. So, if an incident were to happen after your policy lapses, you'd still be covered.
It's scary thinking there's a chance you can get sued, but malpractice insurance offers protection. Besides malpractice insurance, you can add extra layers of protection. Your 401(k) and owning a home are two examples, which I briefly cover in this article.
2. Disability Insurance
If you're unable to work at any point in your life, disability insurance will keep you (and your family if you have one) afloat. For example, if you were to have a heart attack, it would cover your income during your recovery.
If you're a young and healthy doctor, now is the perfect time to apply for a policy. You're more likely to get lower rates now as opposed to when you're older. It's best not to wait until you're older because if you experience serious health issues, you may not be able to afford one. Or, another problem could be you’re unable to get a policy period.
Shop around and find a company that offers the best policy that suits your needs. If you go with long-term disability insurance, some will pay out up to 10 years or until you retire. Whereas individual disability claims typically last around three years.
No matter how old you are right now, disability insurance is the way to go. It'll make you feel better, knowing if you got seriously ill, you'd have something to fall back on.
3. Equity in a House
Mortgaging a home is another way to protect your income. Safeguarding your assets by getting a house is smart. It's one of the best ways to invest your money.
If you are living in an apartment, consider taking out a mortgage and buying a home instead.
Spending your money without a return on investment isn’t prudent. On the other hand, earning money on a house is the ideal investment. Your assets will be secure, and one day, if you sell your home, you should make money!
4. 401(k) or 403(b)
Most healthcare organizations set you up with a 401(k) or 401(b). The majority of hospitals are non-profit businesses, which is why doctors have a 403(b).
With a 401(k) or 403(b), part of your income automatically comes out of your paycheck each month. Many hospitals offer a "match" to plan, which means when you put money in, so does your employer.
Consult with your human resources department on the details. They'll let you know if you're contributing enough money to get the whole match. If you’re not, you won't get your total retirement value.
5. Savings Account
Putting money aside for a rainy day is another way to protect your income. If you can, invest most of your money. Investments, whether through a 401(k), stocks and bonds, and more, will set you up for the future.
But besides investments, there are also high yield savings accounts. This type of savings account earns you more money than your standard savings account.
Keep in mind that you'll need to deposit a large amount of money with this type of account. And you won't be able to pull money out as frequently.
Regardless, high yield savings accounts are worth looking into. The more ways you can make wise financial decisions and save money, the better!
Ensuring your income is safe and sound by investing and saving it will undoubtedly put your mind at ease. You'll make the best decisions knowing that you're doing all that you can to invest. And you'll feel good knowing you're setting yourself up for a profitable future.
By taking care of your finances, you're taking care of your loved ones as well. Be pertinent with how you spend your income. One day when it’s time to retire, you’ll be thankful you took the time to protect your assets!
Did you find this article helpful? Share your thoughts with friends...