Net worth
Started by Iamnew2
Not sure where I found this but a reasonably simple equation:
MD Net Worth = (Salary x Years in Practice x 0.3) - 200,000
Perhaps more complicated but more controllable way via financial calculator (* Finance Calculator) to estimate at career end:
PMT = 15% average annual take home salary (or your current saving rate), insert as negative number
PER = # years left of your career
INT = 6% (or current annualized investment return)
PV = current retirement account(s) value, insert as negative value
FV = variable the calculator will solve
Add your FV to whatever other assets you might have, and want to include, such as home(s), share value in ASC, etc.
MD Net Worth = (Salary x Years in Practice x 0.3) - 200,000
Perhaps more complicated but more controllable way via financial calculator (* Finance Calculator) to estimate at career end:
PMT = 15% average annual take home salary (or your current saving rate), insert as negative number
PER = # years left of your career
INT = 6% (or current annualized investment return)
PV = current retirement account(s) value, insert as negative value
FV = variable the calculator will solve
Add your FV to whatever other assets you might have, and want to include, such as home(s), share value in ASC, etc.
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3-4 million in investable assets
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Net worth is what? Assets - Liabilities. So you want to know how much cash + assets to have to retire? I agree it is probably greater than 3 million, but extremely variable person to person. Definitely would want your assets paid off.
I mainly look at what my retirement income will be. How much I will have each month vs how much I will need. Net worth doesn't necessarily reflect that.
On a side note, (and I may be the only one) but I have been in various retirement plans since 2007 and don't have a 6% return rate on my investments. Thats regardless if I do the investments myself or hire someone to do it. I pretty much see myself as an investment looser, based on everything that was promised with compounded interest. However, currently satisfied with a defined benefits pension plan if I stay with my current job.
I mainly look at what my retirement income will be. How much I will have each month vs how much I will need. Net worth doesn't necessarily reflect that.
On a side note, (and I may be the only one) but I have been in various retirement plans since 2007 and don't have a 6% return rate on my investments. Thats regardless if I do the investments myself or hire someone to do it. I pretty much see myself as an investment looser, based on everything that was promised with compounded interest. However, currently satisfied with a defined benefits pension plan if I stay with my current job.
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I won't be making that kind of money in upcoming position, but still a reasonable wage. I don't have a pension, I do have investments, a reasonable saved amount, paid off house, car, and no med student loan/masters/undergrad loan. Can I ask how you get the pension? I wasn't aware that groups gave pensions outside of the VA or Kaiser.
Pensions are a dying breed rare to see outside of government/VA jobs. Being a high earner as a physician you have tremendous potential to create whatever net worth you desire within the confines with the time value of money.
FV = PV(1+r)^t
FV = PV(1+r)^t
Some state employers and public universities still offer DB pension plans. The accounting and admin costs are very high so people don’t offer much anymore. But, a 3 million pension at retirement would technically be a net worth of zero until you use it.
If net worth for PMR was 3M in 2018 then likely would want more like 3.5-3.6M now.
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Mayo
haha PGY-30! I am not sure how many PM&R docs only make $250k these days.
