Financial Planning for Doctors and the ‘5 Mizes”
In this video, financial advisor Ben Yin talks about the “5 Mizes” for being a successful Independent Contractor Physician, and it's not about how much money you earn, it's about how much money you keep.
Optimize: Independent contractors (ICs) can optimize their contributions into a Solo 401k or a SEP IRA. For further tax reduction, consider adding a Defined Benefit Plan or including your spouse on the payroll.
Maximize: Proactive strategies for independent contractor physicians include employing family members, such as children, and maximizing deductions—and don't forget to consider business retreats!
Customize/Fleximize: Tailor your financial plans including health, disability, life insurance, and retirement investments to suit your personal and family needs. Enjoy the autonomy of no non-compete clauses, offering flexibility unmatched in traditional employment settings.
Minimize: Minimize taxable income beyond retirement contributions and business expenses. Utilize the Qualified Business Income deduction, reduce federal taxes through PTE Level Tax (if your state is eligible), and potentially lower self-employment taxes by strategically paying yourself a W-2 salary from an LLC.
