Is Your Retirement Plan Up to Date? 2024 Tax & Savings Strategies for Physicians
Dear RPPA community,
As 2024 wraps up, we’ve navigated plenty of challenges in healthcare. While Congress didn’t stop the 2.8% Medicare physician pay cut (which feels like 6.3% with inflation), it’s clear we need to keep pushing.
There’s hope—look at the recent reversal of Anthem Blue Cross Blue Shield’s anesthesia policy after widespread online outrage, including many physicians speaking up. Our voices can make a difference.
When Congress is back in January, let’s demand change. Write to your representatives and raise awareness on social media. ➡️ LINK to GET INVOLVED
Looking Ahead to 2025
When was the last time you reviewed your company's retirement plan? Our retirement plan experts from the 2024 RPPA Growth Summit recommended at least once every 3 years!
As business owners, we're not always taught about how to build the best retirement plans and how frequently to review them. Well, how do you even review something that you're not necessarily that familiar with?
Are there new tax-saving strategies in these retirement plans that you may not aware of?
So, I'm excited to kick off the new year with an impactful webinar on January 6th at 4:30 PM PST to help you better understand retirement plan options for your practice 🥳🥳
Join experts Matt Pisera, Bryce Evans, and Scott Kennedy as they cover:
Optimizing your 401(k).
Exploring Cash Balance plans for immediate and long-term benefits.
Get 2025 off to a strong start and find ways to make the most of your 2024 taxes.
📅 Register for this free event below! 👇
Finding the Right Retirement Options For Your Practice
From Left to Right: Matthew Pisera, Bryce Evans, Scott Kennedy
Below is a summary of panel discussion “Finding the Right Retirement Options for Your Practice” from our 2024 RPPA Growth Summit
Q: What’s the most common oversight for physicians managing their retirement plans?
Scott Kennedy: One of the biggest oversights we see is not keeping retirement plan documents current. Many practices set up their plans years ago but haven’t updated them, which can make them non-compliant with IRS and Department of Labor regulations. Another frequent issue is late contributions—employers must submit withheld contributions from employee paychecks within seven days. Delays can result in penalties. Conducting regular reviews and ensuring everything is up to date can help avoid these pitfalls.
Q: How can physicians contribute more to their retirement plans beyond the 401(k) limit?
Scott Kennedy: A cash balance plan, which is a type of defined benefit plan, is a great solution. It allows physicians to contribute substantially more than the typical 401(k) limit. For example, combining a 401(k) with a cash balance plan can enable contributions of up to $250,000 annually for physicians aged 55 or older. This is particularly useful for doctors closer to retirement who want to accelerate their savings.
Q: What should employers do if employees don’t value long-term benefits like profit sharing?
Bryce Evans: It comes down to education. Many younger employees prioritize immediate compensation, like hourly pay, over long-term benefits. Employers can bring in financial advisors for quarterly meetings or include benefit education during the onboarding process. This helps employees see the financial impact of benefits like profit sharing over time. Adding a vesting schedule is another way to incentivize employees to stay longer and fully appreciate the value of these benefits.
Q: How often should practices review their retirement plans and fees?
Bryce Evans: At least every three years, but ideally annually. Fees often go unnoticed as a plan grows, leading to misalignment with industry benchmarks. I frequently encounter plans that haven’t been reviewed in five to seven years, and their fees are significantly higher than they should be—sometimes six times the industry average. Regularly benchmarking fees ensures you’re meeting your fiduciary responsibility and getting the best value for your plan.
Q: What retirement plan options are best for practice owners just starting out?
Matthew Pisera: For newer practice owners, simpler options like a SEP IRA or Solo 401(k) are great starting points. They require less administration than traditional 401(k) plans and allow for significant contributions relative to income. As your practice grows and you hire employees, transitioning to a traditional or Safe Harbor 401(k) can help with employee retention and provide higher contribution limits. The key is balancing cost and flexibility based on your practice’s structure and goals.
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Scroll through to relive the best moments or catch up on what you missed during the 2024 RPPA Growth Summit! 📸 💃🏻
