Physician Cents

Retirement planning doesn't end on your last day of work—it shifts into a new, equally important phase: making your nest egg last. In Part 2 of the Pre-Retirement Playbook, we discuss the essential strategies for physicians and high-income earners to draw down their retirement savings while sidestepping common pitfalls.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [04:37] Strategizing Required Minimum Distributions
• [09:28] Annuities vs. Life Insurance
• [12:39] Discussing Roth conversion ladder and taxable accounts
• [14:53] Building a hybrid investment strategy
• [18:26] Understanding Roth conversion options
• [22:32] Managing unexpected health events
• [24:20] Managing IRMAA and income thresholds
• [29:54] Benefits of large taxable accounts

Understanding Your Drawdown Options

A successful retirement hinges on making strategic decisions about where and how you withdraw income. There are several options:

• Roth Conversion Ladder

A Roth conversion ladder involves systematically converting portions of your pre-tax accounts (like a traditional IRA) to a Roth IRA over several years. This spreads out the tax impact and can significantly increase your portfolio's flexibility and longevity, provided you plan conversions in low-income years or during market downturns for optimal benefit.

• Qualified Charitable Distributions (QCDs)

If philanthropy is close to your heart, QCDs allow you to make tax-advantaged gifts directly from your IRA to a charity—up to $100,000 per year—once you reach age 70½. These distributions count toward your Required Minimum Distributions (RMDs) but are excluded from taxable income, boosting both your legacy and tax efficiency.

• Strategic RMD Account Selection

Many retirees don't realize they have latitude in which traditional IRA they use to satisfy their total RMD each year. For example, if one IRA is loaded with stocks and another with bonds, you could prioritize withdrawals from the bond-heavy account during a poor stock market year.

• The QLAC Option

Qualified Longevity Annuity Contracts (QLACs) allow you to move up to $210,000 from your retirement account into a deferred annuity, potentially lowering your RMDs and guaranteeing income later in life. While niche and rarely used, it's a potential tool for those seeking longevity risk protection and RMD relief.

Avoiding The Most Common Pitfalls

Even the best investment strategy can be undermined by a few overlooked mistakes. Many wait until the eleventh hour to model the impact of RMDs, missing years of tax planning opportunity. The earlier you forecast anticipated distributions, the more tools you'll have to minimize taxes and sequence-of-return risk.

Roth conversions are powerful, but overconverting or picking the "wrong" year—such as just before a recession or adverse tax law change—can generate unnecessary tax burdens. Since it's impossible to time the market, base decisions on current information and stick to a plan, holding back from chasing perfect timing. Widowhood or major health changes can dramatically shift your tax bracket, Social Security, and overall plan. Don't wait until tragedy strikes—factor in survivor planning and account titling well in advance, especially when a "family CFO" is involved.

If you retire before age 65, budget generously for private health insurance and higher early-retirement spending—these are often the "go-go" years for travel and hobbies. A large taxable account can provide flexibility to cover these costs without incurring heavy taxes.

Flexibility and Proactive Planning Are Key

The decumulation phase is filled with variables, from healthcare costs and longevity to tax law and market volatility. The right mix of drawdown strategies, attention to key pitfalls, and a proactive approach gives you peace of mind. Especially for physicians and high-income earners, building up sizable taxable and Roth accounts early pays exponential dividends in flexibility later.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Resources & People Mentioned

• Bogleheads
• Modern Portfolio Theory: What MPT Is and How Investors Use It
• Form 1099

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

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Financial planning is never one-size-fits-all, especially for high-income professionals like physicians. Thinking about minimum distributions (RMDs) or optimizing withdrawal strategies in the years leading up to retirement requires intentionality and foresight. In this episode of the Physician Cents Podcast, we explore the "pre-retirement playbook"—the top five financial moves every individual should consider before leaving full-time work.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• 04:07 Understanding Required Minimum Distributions (RMDs)

• 09:48 Importance of taking professional advice

• 16:08 Discussing DIY financial planning risks

• 19:36 Managing taxes for Roth conversions

• 22:03 Year-end tax planning strategies

• 25:47 Planning your retirement investment strategy

• 27:05 Balancing assets in retirement accounts

• 30:25 Discussing your legacy planning

1. Personalized Projections & RMD Modeling

One of the most critical pre-retirement moves is running detailed, personalized projections. RMDs, or required minimum distributions, are mandatory withdrawals the IRS requires from pre-tax retirement accounts (think traditional IRAs, rollover IRAs, 401(k)s, 403(b)s, and 457s) starting at age 75. The rationale is simple: the IRS wants its cut of deferred taxes.

The size of your RMD is based on two factors: your age and the total value of your pre-tax assets. The higher those numbers, the greater your required distribution—and potential tax bill. If you've spent your career diligently saving in pre-tax vehicles to mitigate high tax brackets, you may find yourself facing a tax bomb in retirement.

2. Strategic Roth Conversions

Roth conversions are a powerful tool to minimize future RMDs and manage your overall tax liability. Essentially, a Roth conversion involves transferring assets from a pre-tax account to a Roth IRA, triggering a taxable event in the year of the conversion. The strategy here is all about timing: converting during lower-income years (such as the early retirement window before RMDs begin) can allow you to "fill up" lower income brackets, paying less in taxes than you might later.

Roth conversions offer flexibility, but they require diligent tax planning. Conversions increase your taxable income for the year and can impact other financial aspects, such as triggering higher Medicare premiums (IRMAA).

3. Building Flexibility Buckets

A robust retirement strategy is all about flexibility. That means building savings across three key "buckets": pre-tax, Roth, and taxable (non-retirement) accounts.

The idea is to avoid tapping your pre-tax or Roth IRAs (thus compounding your tax issues) and instead use the liquidity in your taxable bucket to pay any resulting taxes without disrupting your growth strategies. Tax loss harvesting and careful management of capital gains further enhance this flexibility.

4. Optimizing Withdrawal Sequencing & Account Drawdown

Withdrawal sequencing—the order and timing in which you tap your assets—can significantly affect the sustainability of your nest egg. The strategy typically uses the safest assets (cash or short-term bonds) to fund the first few years of retirement, protecting against market downturns ("sequence of returns risk"). These "buckets" are gradually refilled and re-risked as you progress through retirement.

Selecting which accounts to draw from first—whether taxable, pre-tax, or Roth—depends on your unique situation, tax rates, and estate planning goals. A well-structured drawdown plan navigates both income needs and tax efficiency, protecting your wealth for decades (and your heirs).

5. Updating Legal, Insurance, and Legacy Plans

No pre-retirement checklist is complete without reviewing your legal documents, insurance coverage, healthcare directives, and legacy plans. This includes updating wills, beneficiary designations, powers of attorney, and ensuring your insurance and long-term care strategies align with your retirement horizon and family needs.

The Bottom Line

Retirement planning is about optimizing how and when you use your assets, minimizing taxes, and preserving flexibility. Whether you're in the early, mid, or late stages of your career, using this pre-retirement playbook can mean the difference between anxiety and confidence in your financial future. Consider partnering with a professional to ensure your plan is as strong and dynamic as you are.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Connect With Physician Cents

• WealthKeel LLC

• Olson Consulting LLC

• Tyler Olson on Twitter

• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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In this special mailbag episode, we dig into the concept of "Coast FIRE"—a financial strategy where you save aggressively early, then allow your investments to grow on their own while you step back from intense saving. We explain what it means to buy back time and how to maximize your savings.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• 03:26 Your early retirement planning strategy
• 06:37 A few concerns about retiring early
• 11:25 Navigating your financial independence choices
• 15:48 Accessing funds before retirement age
• 18:31 Outsourcing tasks and enjoying life
• 26:01 Discussing Roth 401(k) and tax planning
• 27:11 How to understand Coast FIRE as a physician

Understanding Coast FIRE

Coast FIRE is a financial strategy where you save and invest substantially during your early working years, accumulating enough assets so that, by a certain point, compounding growth alone is expected to fund your retirement. Once you "hit your number," you can stop making hefty retirement contributions and let your investments do the heavy lifting—coasting into financial independence without additional savings pressure.

With this approach, mid-career physicians are no longer bound to maximize 401(k), 403(b), or Roth IRA contributions if they don't want to. Instead, the focus shifts to maintaining lifestyle and exploring options like reducing income or reallocating time to non-work priorities.

While FIRE (Financial Independence, Retire Early) is a popular acronym, the real value is in the "FI"—making work optional, rather than strictly retiring early. For most physicians, a late career start and a drive to stay productive means traditional retirement at 45 can be unrealistic or undesirable. What matters is obtaining the optionality that financial independence provides.

Buying Back Time: The Soft Side of Money

The most rewarding aspect of Coast FIRE is the ability to "buy back time," shifting away from relentless work toward pursuits that enrich life. This can mean reducing work hours (going to 0.8 or 0.6 FTE), outsourcing tasks at home (like lawn care or cleaning), or investing in meaningful family activities and hobbies.

We recommend cultivating interests outside medicine and prioritizing pastimes now, so the transition to a less work-centric lifestyle feels natural when the time comes. Hobbies, travel, or spending lots of time with family can all become focal points.

Practical Tax Strategy

Overreliance on pre-tax retirement accounts has a potential downside—the substantial future required minimum distributions (RMDs) and tax headaches. Diversifying into taxable accounts provides both flexibility for early withdrawal and potential relief from future tax bombs.

Roth conversions can be powerful, especially if timed well after market downturns, allowing for tax-free growth on a depressed portfolio. But as with all planning, a personalized approach tailored to your specific circumstances beats one-size-fits-all rules. Use frameworks like Coast FIRE as inspiration, not rigid templates. Build a financial plan rooted in your values, personal goals, and family needs. Enjoy today while planning for tomorrow, and don't let oversimplified labels define your path.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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In the latest episode of the Physician Sense Podcast, we take listeners behind the curtain of a physician-teacher household with an annual income of $500,000. At first glance, this kind of income might sound like the ticket to unlimited financial freedom. But even with a hefty paycheck, many feel they're just barely keeping up. Here's what we uncovered—and what professionals in similar positions can learn from it.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• 00:00 Exploring finance Reddit threads

• 03:28 The illusion of endless income

• 08:45 Balancing finances and lifestyle choices

• 09:54 Discussing household budget balance

• 15:01 Fair pay for household services

• 16:45 Sharing high-income budgeting ideas

The Surprising Reality is That $500,000 Doesn't Feel Limitless

Even a household earning $500,000 can still feel like they're living paycheck to paycheck. This is especially relevant for medical professionals and dual-income families who see taxes, debt, and lifestyle costs eat away at what appears—on paper—to be a substantial income.

So, how does a $500,000 budget get allocated?

• Taxes: Roughly $110,000, or a bit over 20%

• Mortgage/Property Taxes: Around 11-12% (outside a high cost-of-living metro)

• Student Loans: 8% of income, or $40,000 per year, likely split between the physician and their spouse

• Car Payments/Expenses: About 6%, or $30,000 annually—even without luxury cars, this can add up with insurance and lease payments.

The Lifestyle Factor

Much of the online Reddit commentary about the household budget focused on spending for food, vacations, and daycare—which together made up 24% of income. Drill down, and you get $20,000 a year for groceries and $30,000 for restaurants. While this is a 50/50 split between eating in and out, for a busy medical family, convenience becomes a critical factor—and that comes with a cost.

Redditors also discuss how much they spend on childcare, which takes up another $36,000 annually, and children's activities or education funds (such as 529s) together add up to about 10% of the overall budget. Vacations then come in at $35,000—a number that surprised us only for how reasonable it seemed given the rest of the budget.

Scarcity Mindset Can Be Healthy

Despite the "paycheck to paycheck" feeling, this Reddit thread demonstrates a well-constructed financial plan. Maintaining a bit of a scarcity mindset can be protective, helping prevent lifestyle creep from undoing long-term savings goals. For physicians or any high-earning professionals, the real lesson is about proactive management, intentional spending, and building systems that automate what matters. Even if the big numbers don't always feel big enough, clarity—and a little moderation—can go a long way.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Resources & People Mentioned

• This is the Reddit story we're referring to: https://www.reddit.com/r/Salary/comments/1lcw4c8/personal_finances_making_500k/

Connect With Physician Cents

• WealthKeel LLC

• Olson Consulting LLC

• Tyler Olson on Twitter

• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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Buying your first home is a momentous occasion, especially for physicians who've spent years on the move during medical training. But beyond the excitement lies a whole host of financial surprises that can turn homeownership from a joyful milestone into a source of stress, unless you know what to expect and plan accordingly. In this episode, we discuss the often-overlooked costs, share some real-life stories, and give you a few practical strategies to help you get ready to become a homeowner.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [04:03] Planning for home buying expenses
• [07:31] Discussing physician mortgages
• [10:33] Concerns about rising HOA fees
• [14:43] Unexpected expenses after home purchase
• [21:45] Budgeting for home maintenance
• [23:14] Advice for first-time home buyers

Closing Costs & Upfront Fees

One of the earliest and most substantial financial shocks for first-time homebuyers is the closing costs and upfront fees. So often people focus solely on the purchase price and down payment, but in reality, acquiring a home involves a variety of other fees—including appraisal, inspections, title insurance, recording fees, attorney fees, and prepaid property taxes.

A rule of thumb is to plan for about 3% of the purchase price for closing costs. For instance, on a $500,000 home, that's $15,000 just to close the deal. And while physician loans are attractive for their low or zero down payment features, you still need to bring a significant amount of cash to the table for these fees—rolling closing costs into your loan only increases your debt and the interest you'll owe.

Post-Closing Immediate Costs: Furniture, Fixes, and Fees

The expenses don't stop once the keys are in your hand. Moving into a new home brings another round of costs—some mandatory, others optional. Typical immediate purchases and outlays include:

• Changing locks for security
• Deep cleaning the property
• Early lease termination fees if you're moving out of a rental before your lease ends
• Major furniture purchases and household goods
• Initial DIY adventures at home improvement stores—paint, window coverings, light fixtures, and small repairs

First-time homeowners often underestimate these "little things," but collectively, they can easily tally into the thousands.

Regular and Irregular Expenses

Owning a home changes your cash flow dynamic. Beyond your monthly mortgage, there are recurring expenses such as property taxes, homeowner's insurance, and HOA fees. These outlays never disappear—even after the mortgage is paid off.

The need for a maintenance savings bucket is vital. Major systems (HVAC, water heaters, roofs) eventually fail and require costly replacements. Even minor aesthetic upgrades—hardware swaps, landscaping, painting—add up over time. Prudent homeowners earmark funds monthly for routine maintenance and unexpected repairs, reducing reliance on high-interest financing or credit cards.

Smart Strategies for New Homeowners

So how can you prepare for these financial surprises?

• Budget for at least 3% of your purchase price to cover upfront and post-closing needs
• Consider multiple inspections for varied expert views on your property
• Prioritize your upgrades/repairs list and spread out non-essentials over 6–12 months
• Avoid draining your savings—leave a cushion for inevitable surprises
• Shop around for service providers to save thousands on repairs and upgrades

Buying a home is exciting, but it's also a layered financial decision. With careful planning and an awareness of the not-so-obvious expenses, you'll hold onto the joy of homeownership without sacrificing your financial health.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Resources & People Mentioned

• This is the Reddit story we're referring to: https://www.reddit.com/r/Mortgages/comments/1tjobzf/first_time_homebuyers_what_was_the_biggest/

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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Buying a home is a major milestone, especially for physicians who've spent years renting and dreaming of settling down. However, jumping into homeownership right after landing your first attending job can carry serious risks—financial, professional, and even personal. On the show this week, we break down the real costs, challenge common assumptions, and equip you with strategies to make the right decision for your lifestyle.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [00:00] Understanding closing costs and commissions
• [04:21] Discussing home buying decisions
• [09:45] Understanding Non-Compete and Home Location
• [11:09] Understanding work-life balance factors
• [16:05] Discussing inflated housing markets
• [17:25] Challenges of settling for physicians

Why Physicians Should Think Twice Before Buying a Home After Training

Many new doctors are shocked to discover just how expensive it can be to exit a home purchase gone wrong. If you think closing costs are painful, wait till you find out what negative equity is—where the proceeds from selling don't cover your remaining mortgage and transaction fees, forcing you to pay out of pocket to leave your home.

Closing costs on both buying and selling can easily reach $100,000 for a $1 million home. On buying, expect 2-3% for administrative fees, and on selling up to 5-6% in realtor commissions plus additional expenses, totaling between 7-10%. This doesn't factor in sudden market downturns that can leave homeowners with negative equity, multiplying financial stress and drastically limiting options.

Knowing When You're Really Ready

We talk a lot on the show about the danger of buying before you truly know your job and location. Many fall into the trap of assuming that once they become an attending, stability is guaranteed. But the reality is often different: about half of doctors leave their first attending job within a few years. As one story highlights, a physician purchased a home immediately after starting a new job, only to discover soon after that the workplace environment was toxic—and due to a non-compete clause, had to sell and absorb huge costs.

What's more, your experience as a trainee in a city or at a hospital is not the same as being an attending. Even returning to a familiar place, the dynamics, expectations, and relationships can shift dramatically, catching many off guard.

Renting Isn't Defeat—It's Strategic Flexibility

It's understandable to crave permanence after years of training and relocation, renting for a year or more can be the single best way to test-drive your new life and protect your finances.

Renting lets you:

• Assess job satisfaction and work-life balance without pressure
• Get to know neighborhoods, school districts, and commuting patterns
• Allow time to clarify actual income, bonuses, and lifestyle expenses
• Be nimble in case you need (or want) to pivot jobs or locations

Don't be swayed by cultural or peer pressure that "successful people own homes." For physicians at this career juncture, flexibility is an underrated asset.

Reviewing Contracts and Watching for Conflicts of Interest

Physicians should never overlook the importance of having their employment contracts, especially non-competes, reviewed by a qualified attorney before making financial commitments. A restrictive non-compete could lock you out of entire regions if the job doesn't pan out, forcing an expensive relocation and home sale.

Equally important is recognizing who stands to benefit from your buying decision. Mortgage brokers and realtors may encourage larger purchases because their commissions increase, but their incentives are not always aligned with your best interests. It's important to seek unbiased advice from professionals who prioritize your goals, not their commission checks.

Any home purchased should fit seamlessly into your long-term financial plan. Compensation structures for physicians are often complex and unpredictable, making it all the more important not to overextend based on projected (but not guaranteed) bonuses. Consider basing affordability on your base salary alone, treating bonuses as welcome extras rather than essentials.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Connect With Physician Cents

• WealthKeel LLC

• Olson Consulting LLC

• Tyler Olson on Twitter

• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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Is it possible to earn extra income without succumbing to burnout as a physician? We discuss business entity and liability implications, all the way through to breaking down tax considerations and retirement benefits. This conversation answers real-world questions doctors face when adding 1099 income streams. Whether you're a medical student contemplating your first side gig or an attending weighing S Corp elections, this episode is packed with practical insights into organizing your extra earnings, maximizing tax advantages, and sidestepping common pitfalls. Join us as we untangle the complexities behind "easy" side income and help you make informed choices for your financial journey.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• 00:00 Exploring side hustle logistics
• 06:13 Discussing employment classification issues
• 09:48 Determining when to organize income
• 10:47 Understanding the QBI Deduction
• 15:18 Questionable tax advice on social media
• 19:19 Bookkeeping as a necessary chore
• 22:49 Comparing W2 and 1099 Expenses
• 25:35 Tax strategies for side hustles

Why Doctors Pursue Side Hustles

Wages in the profession have largely stagnated despite inflation, amplifying feelings of underpayment. For many, quicker student loan repayment is a necessity, especially as public service loan forgiveness (PSLF) opportunities become more limited and private loans play a bigger role. Crucially, over 55% of physicians report burnout, and diversifying income is seen as a buffer against financial strain and a means to pursue greater autonomy.

Side hustles, whether consulting, locums, telemedicine, or unrelated ventures, are attractive because they seem to offer flexibility, financial upside, and professional variety. However, the reality is more complex than simply signing up for extra shifts or gigs.

Understanding 1099 Income

Unlike W2 income, 1099 earnings classify you as an independent contractor, a self-employed business owner, even for side activities. This brings both opportunity and responsibility. While there's high potential for financial gain and tax optimization, it's crucial not to view extra income through rose-colored glasses. Setting up a side business entails paying additional taxes, handling benefits independently, and navigating professional liability risks.

There are also administrative requirements: invoicing, expense tracking, quarterly estimated taxes, and staying compliant with state and federal business regulations. Failing to account for the true time and effort required can erode the benefits. Physicians' high hourly rates further intensify the importance of factoring in opportunity cost when considering whether those extra hours of work pay off.

Business Entity Choices

One of the biggest decisions is whether to remain a sole proprietor, form an LLC, or elect S Corp taxation. The right answer depends not just on income but also on the anticipated longevity and complexity of your side work.

• Sole Proprietor/LLC: For those earning moderate or occasional 1099 income (less than $100k/year), a sole proprietorship or a simple LLC can suffice. LLCs require an Employer Identification Number (EIN) and create more organizational structure, which is especially helpful if you plan to contribute to a Solo 401(k).

• S Corp: Once side hustle income approaches $200k–$250k/year, S Corp status may provide meaningful tax advantages. S Corps allow certain profits to be distributed as dividends, potentially saving on self-employment (FICA) tax. However, the setup and administrative costs (payroll, separate tax filings, bookkeeping) mean that the savings often materialize only at higher income thresholds.

Don't rush into complex structures based on advice you see on social media; one-size-fits-all guidance rarely stands up to IRS scrutiny.

Bookkeeping, Professional Help, and Retirement

Good recordkeeping is non-negotiable. Even for simple 1099 income, tools like QuickBooks and separate business accounts help avoid end-of-year headaches. Once you form an S Corp or have recurring income, a professional bookkeeper may be worth the investment—even at $3–$600/month—freeing up more physician hours for meaningful (and well-paid) work.

Retirement vehicles, such as Solo 401(k)s and, for high earners, cash balance plans, are powerful tax-deferred options. These do require additional setup (often with an EIN/LLC in place), but can drastically improve long-term wealth-building opportunities.

Physician side hustles can be incredibly rewarding—financially and personally—if approached thoughtfully. Remember that the goal isn't just more income, but a more balanced, sustainable, and fulfilling career.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

Apple Podcasts

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On the show this week, we're taking a deep dive into college planning specifically tailored for physicians with children or grandchildren. Whether you're hoping to fully fund your child's undergraduate and graduate education or simply looking to balance saving for college with providing meaningful life experiences, this episode guides you through the real conversations every family should have, explores the most effective savings vehicles like 529 plans, and weighs the pros and cons of alternatives such as UTMAs, UGMAs, and new account types.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [05:28] Setting financial goals for education
• [12:55] Planning for children's education fund
• [14:10] Discussing the impact of savings on families
• [16:51] Handling children's financial responsibility
• [20:06] Possible tax impacts of investment fund
• [23:46] Discussing potential college plan changes

What Does Support Mean for Your Family?

Before crunching numbers or choosing account types, it's important to reflect on the kind of support you hope to provide. This requires real conversations with your spouse or partner about your goals and values for your children's education. Some families want to fully fund undergraduate and even graduate school, while others are comfortable letting their children take out some loans, prioritizing experiences, like family travel, during the formative years.

Most commonly, families aim to cover the full cost of undergraduate education, but as we highlight, there's a broad spectrum, and it's essential to avoid setting expectations too early for how accounts will be used or how children's paths will unfold.

Questions to Consider:

• Would you rather fund experiences now or prioritize saving for future expenses?

• How important is it for your children to have skin in the game when it comes to their education?

• How will you emotionally handle these funds if your children's plans differ from your expectations?

The 529 Plan: The Go-To Vehicle for College Savings

When it comes to funding college, the 529 plan is the favored tool for most physicians. Its advantages include:

• Tax-deferred growth and tax-free withdrawals for qualifying educational expenses

• Potential for state income tax deductions depending on your residence

• Flexibility in using funds, including for K-12 education (up to $20,000/year per beneficiary), and the possibility of transferring beneficiaries within the family

Overcontribution is possible and should be monitored, as contributors should stay within the annual gift tax exclusion limits ($19,000 per person, $38,000 per couple in 2026; more with the five-year front-loading rule).

Brokerage Accounts, UTMAs/Ugmas, and New Accounts

While 529 plans are powerful, some families will want or need additional options:

Joint Brokerage Accounts

A parent-held brokerage account offers maximum flexibility and control. Funds can be invested for growth and allocated for education or other family priorities, with no requirement to turn over assets when a child reaches the age of majority. This avoids the risk of a large sum becoming available to a young adult before they're ready to handle it responsibly.

UTMA/UGMA Accounts

Uniform Transfers to Minors Act (UTMA) and Uniform Gifts to Minors Act (UGMA) accounts can be useful for modest gifts, but we don't recommend them for substantial college savings. Once the beneficiary comes of age, they gain full control of the account—potentially undermining the intended use.

"Trump Accounts" (530A) and Emerging Options

Newer account types, such as the so-called "Trump accounts" (officially 530A accounts), have potential—particularly for long-term retirement savings for children—logistical limitations and a lack of state or federal tax deductions make them best viewed as a complement (not an alternative) to the 529 plan for now.

Preparing for the Unexpected

Keep long-term goals in mind, revisit your plan as your family grows and changes, and avoid setting rigid expectations for how your children will use educational funds. Your best-laid plans should empower your children without constraining their choices or causing resentment if their paths differ.

For physicians, college planning is about more than maximizing a 529 plan. Begin by clarifying your values, then harness the right mix of accounts to support your goals. College savings accounts are tools; used thoughtfully, they can support both your children's futures and your family's financial well-being.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

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When it comes to preparing for your child's education, the 529 plan remains one of the most powerful tools available. But with great power comes great responsibility—and plenty of questions. In this episode of the show, we discuss the fundamentals and nuanced considerations of using 529 plans. Education savings shouldn't be a rigid, anxiety-inducing experience. Start early, revisit often, plan around what you know, and prioritize open family conversations. The 529 plan is just one tool in your financial toolbox.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [04:07] The 529 Plan is flexible, but not foolproof
• [05:48] Overfunding a 529 can create pressure
• [07:02] Planning college savings
• [12:18] Prioritizing financial goals
• [17:13] Discussing teenage financial responsibility
• [20:20] 529 plan and asset protection tips

Smart Strategies for Funding Education

529 plans offer tax-free growth when funds are used for qualified education expenses. However, remember that you're dealing with children and you have no idea who they're going to become and what they're going to want to prioritize.

Parents often feel pressure to guess the right amount to save, even though future interests and educational paths can't be predicted. Overfunding a 529 can create subtle, sometimes unspoken pressure on children to make choices, such as attending a particular type of school, just to use the money. It's important to tailor your contributions so the account serves your goals without dictating your child's life path.

Setting Reasonable Goals: The 75% Rule and Beyond

How much should you save? Aim to fund about 75% of projected college costs, knowing that things may change and that flexibility is critical. Tuition can vary widely depending on the institution, consider the difference between private schools and public options.

It's equally important to realize that education paths are diversifying; not every child will take a traditional four-year university route. Some may pursue trade schools, gap years, military service, or entrepreneurial ventures. Keep your funding strategy nimble and reevaluate your goals as your children grow.

Roth Transfers, K-12, and Changing Beneficiaries

529 plans have become more versatile in recent years. Now, up to $35,000 of unused 529 funds can be rolled over to a Roth IRA for the beneficiary, provided certain requirements are met, including that the account has been open for over 15 years. Additionally, funds can be used for up to $20,000 annually for K–12 education in some states.

If one child doesn't use the funds, you can change the beneficiary to another child, cousin, or even future grandkids. This flexibility reduces the risk of "overfunding," but careful planning is still needed.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Resources & People Mentioned

• Utah 529 Plan

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

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Audio Production and Show Notes by - PODCAST FAST TRACK

On this episode, we're talking summer survival and exploring how physicians can enjoy vacations, family time, and relaxation without sacrificing their financial goals. We break down practical strategies for budgeting summer trips, managing the costs of family and kids' camps, and staying on track with long-term savings plans. Also on the show are tips for balancing lifestyle choices and intentional spending, making the most of your hard-earned days off, and enjoying guilt-free travel.

Looking for help with Disability Insurance, Physician Banking, Student Loan Refinancing, Physician Mortgages, Contract Reviews, and more? Check out our "Best of the Best" sponsors page to find a list of the professionals Chad & Tyler team up with for their clients.

You will want to hear this episode if you are interested in...

• [00:00] Planning for your annual vacation expenses
• [04:20] Monthly contributions and cash flow planning for summer expenses
• [08:04] The philosophy of vacation spending and personal values
• [13:03] How vacation spending is incorporated into long-term plans
• [16:01] Monitoring and adjusting budgets for seasonal spending spikes
• [16:22] Cash flow analysis helps account for ups and downs in spending

Building Vacations Into Your Financial Plan

Instead of treating summer as a one-off expense or scrambling to cover costs on the fly, we recommend making travel a dedicated part of your annual or biannual spending plan. Our clients often split vacations into domestic and international line items in their financial planning, sometimes choosing major trips every few years and annual regional getaways in between. A big summer expense is also summer camps for kids—a not-insignificant line item that often gets grouped with travel for practical planning.

The key is consistency and visibility. Link a savings account to your "vacation bucket" which is automatically funded monthly, which ensures funds are ready for family trips and children's camps. Over time, this system builds a guilt-free, stress-free process for planning—and paying for—summer fun.

The Psychology of Guilt-Free Spending

A recurring theme is the importance of "money mindset." Guilt can often creep in—should you really spend $15,000 on a vacation when there are other priorities? Embrace what matters most to you, whether that's a once-in-a-lifetime trip or simple downtime with loved ones. Guilt-free vacations, planned in advance, let you be fully present and savor every moment.

Staycations or local hotel getaways can offer restoration at a fraction of the price. The key is intentionality: align your spending with your values while ensuring that big-picture goals remain on course.

Staying On Track With Financial Goals

When savvier systems are in place, most physicians can enjoy well-earned time off without derailing retirement, college savings, or investments. We advocate for robust cash flow tracking—from waterfall charts to custom spreadsheets—so clients can see that their regular savings for 403(b), Roth IRA, and 529 accounts continue uninterrupted alongside vacation spending. One-time splurges rarely move the long-term needle if the planning foundation is strong.

Watch Out for Lifestyle Creep

With schools out and days longer, extra spending can sneak in—whether on home projects, eating out, or impromptu outings. We recommend adjusting budgets to reflect seasonal upticks and reviewing cash flows over multiple months to set a realistic (and sustainable) average.

Ultimately, the secret to summer satisfaction is balance. With proactive savings, clear value alignment, and honest self-reflection, physicians can vacation without compromising their financial trajectory. Be present, enjoy your well-earned break, and know you've planned to make every moment (and dollar) count.

The best of the best list is a paid sponsorship, but these are professionals/companies that Tyler and Chad collaborate with within their own practices or have been vetted to earn a spot on this list. By supporting our sponsors, it allows Chad & Tyler to dedicate more time to you and the Physician Cents community. If you ever have a question (or not a great experience, which we don't expect!) about a sponsor, please let us know. We call it the "best of the best" for a reason, and we will maintain that standard for our listeners & viewers.

Resources & People Mentioned

• Mousehacking.com
• Holistiplan

Connect With Physician Cents

• WealthKeel LLC
• Olson Consulting LLC
• Tyler Olson on Twitter
• Chad Chubb, CFP®, CSLP® on Twitter

Subscribe to Physician Cents

Apple Podcasts

Audio Production and Show Notes by - PODCAST FAST TRACK