The COVID-19 pandemic is affecting virtually everyone in our society, and our hearts go out to all who have suffered first-hand or through friends and family. As a former practicing physician, I cannot help focusing on the plight of our healthcare workers – including nurses, aides, support staff, first responders and physicians. Your dedication and personal sacrifice are truly appreciated.
Plancorp has had the pleasure of serving medical professionals throughout its long history, providing wealth management advice through all stages of their careers. As the landscape of medical practice has changed from small independent practices to employment arrangements and large group practices, we have helped physicians understand the implications of these transitions on their long-term plans. Never during that experience, however, have physicians and other medical professionals faced the challenges they are today, when many are concerned not only for their livelihoods, but for their very health and safety as well.
Once thought to be securely employed and employable, but now faced with “social distancing”, restrictions on patients’ activities, and limitations on the performance of non-emergent visits and procedures, physicians – as are other small business owners – are facing decisions that affect not only themselves and their families, but their employees and their families as well.
As the restrictions seem likely to continue for the immediate future, physicians are having to decide whether to close their offices and furlough their staffs, suspending important benefits such as health insurance and retirement plans. In consideration of their loyal staffs, some have chosen to curtail or suspend their own salaries. Employed physicians are not immune to the distress and are also facing voluntary or mandatory furloughs – paradoxically at a time when the need for medical professionals is at its height.
In our clients’ financial plans and investment strategies, we have attempted to provide for the uncertainty of future events. In these surreal times, here are some of the things we are discussing with our clients:
- Is the cash reserve adequate?
- Is there liquidity to provide for emergency cash without having to sell distressed equities?
- Should deferrals into a retirement plan be temporarily suspended or recharacterized, or can a corporate retirement plan be restructured?
- Are there planning steps that can take advantage of reduced income, depressed stock prices, and low interest rates, e.g., Roth conversions, tax-loss harvesting, loan refinancing?
- Are there newly created government benefits that might be helpful?
There may never have been a time when a sound and up-to-date financial plan was more important than it is today. While the emotional urge to “do something” can lead to poor investment decisions, it is never inappropriate to review all aspects of a financial plan.
There has never been a more important time to have, or develop, a relationship with a trusted advisor who can provide expertise, guidance and discipline. Together we will get through this.
This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.