The Economic “Loss Test” is a diagnostic tool to assess your current financial structure. Each question addresses items of economic loss to doctors and highlights opportunities to increase the efficiency, control and safety of the conversion of your earnings to savings or conversion of savings to spending and gifting. The questions are derived from 37-years of research on doctors’ personal economics and experience in planning for health care professionals. Some of the questions are as follows:
Are you currently practicing as an employee of your own “C” Corporation?
Are you currently contributing surplus pre-tax earnings to a corporate cash balance plan or defined benefit pension plan?
Are you currently allocating surplus pre-tax earnings to other deductible benefit programs?
Are you currently funding a Guaranteed Retirement Income Program using Code Section 101(a) gains to increase spendable retirement dollars?
Do you have $500,000 or more of personal assets in addition to your personal residence and qualified retirement plan assets and, if so, have you implemented asset protection planning?
Have you established a Captive Insurance Company with Section 831(b) tax treatment to manage risks which are not available or not affordable through traditional commercial insurance?
Do you have $1 million or more of total pension accumulations in your IRA, SEP IRA, Roth IRA and/or qualified retirement plans?
Do you have non-cancelable and guaranteed renewable, premium refund, individually underwritten, disability income insurance covering 60% of your annual earnings of premiums paid on a pretax basis from your “C” Corporation?
Are you funding potential long term care expenses using pre-tax dollars with benefits paid on a tax favored basis?
Is the Nobel Prize winning Modern Portfolio Theory method of diversification being used to structure and manage your pension and personal securities portfolios to maximize return for risk assumed?
Are you within 5 years of retirement and, if so, have you initiated a plan to convert illiquid equity (business equity, investment real estate equity, etc.) in to liquid, spendable assets?
Are you multiplying non-taxed funds to endow economic safety nets for your children or to perpetuate institutions that support your value systems?
5 or more questions answered “NO” suggest that you are currently in a structure which will cause you to lose $1,000,000 or more of your career earnings and savings to unnecessary losses.
Licensed Insurance Professional. We are an independent financial services firm helping individuals create retirement strategies using a variety of structures to custom suit their needs and objectives. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.