Retirement Plans in Private Practice

Video Description

Retirement Plans in Private Practice Sign up for TherapyNotes and get two months FREE: https://www.therapynotes.com/r/private%20practice%20skills/ FREE Guide: Start a Private Practice in Counseling: https://tinyurl.com/y9ek9en8 401(k) Calculator: https://smartasset.com/retirement/401k-calculator#NbbHf0eiVL Information on the Savers Credit: https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/what-is-the-savers-credit/L3LyopRkK NerdWallet's Retirement Calculator: https://www.nerdwallet.com/investing/retirement-calculator Bankrate's Self-Employed 401(k) Calculator: https://www.bankrate.com/calculators/retirement/self-employed-401-k-calculator.aspx If you’re running your own business as a therapist, it’s easy to completely forget to plan for retirement. But assuming you’d like to retire comfortably someday, it’s important to start planning for your future by setting some money aside. In this video I go over the benefits of investing in a retirement plan. We’ll also go over some of the retirement plans available to therapists working in private practice and I’ll show you how you can start planning for retirement today. This video is geared for therapists of all kinds, including psychologists, MFTs, LPCCs, social workers, and others in the clinical counseling field. Welcome to Private Practice Skills! I’m Dr. Marie Fang, psychologist in private practice. I post videos offering tools I learned the hard way about starting and growing private practice so that you don’t have to. www.privatepracticeskills.com Facebook: www.facebook.com/PrivatePracticeSkills/ Insta: PrivatePracticeSkills Music From Epidemic Sound: https://www.epidemicsound.com/track/ygp7jGVA44 This video is not intended as professional or legal advice. Be sure to seek the services of a professional if you are in need of them. If you’re like me, retirement might be the last thing on your mind when you’re starting out. And who can blame us? Even though at first it seems like our cash rate should leave us rolling in the dough, once you account for overhead costs and taxes, it may feel like there’s not a whole lot left. But trust me, future you will thank you dearly if you plan now for your retirement. It’s definitely never too early to start, and if you feel it’s too late, it’s still better to invest in retirement now rather than not at all! Before diving into the types of retirement plans available for those of us in private practice, here is a list of the benefits of investing in a retirement plan: 1. You’ll need the money when you retire! Retirement can last for 30 years or longer, and most people need around 70% of their current annual income to retire comfortably. Right now, social security dishes out an average of $1200 monthly. I don’t know about you, but where I live that’s not even enough to cover the cost of housing. So it’s important to rely on other investments in order to retire. 2. Your contributions are tax-deductible and your asset growth is tax-deferred. In other words, money you put into a retirement plan doesn’t count toward your taxable income, and you don’t have to pay any taxes on the assets until you withdraw in the future (at which time, in theory, you may be in a lower tax bracket once you’re retired). 3. Compounding interest means small contributions over time grow to significant savings. As an example, let’s say I currently have zero dollars in my 401k today, and in 2020 I start contributing $10,000 per year to my 401k. You can see here that the blue represents money I contributed to the 401k and the yellow represents interest earned in my account. Assuming I were to retire at 66, at that point almost half of my 401k reflects interest earned on the money I contributed over time. https://smartasset.com/retirement/401k-calculator#NbbHf0eiVL 4. Since you can contribute both as the employer and employee, the contribution limits are much higher than you typically find with a traditional employer retirement plan. If you share finances with a partner, you might opt to max out your contributions in your retirement plan while you lean more on your partner’s paycheck for your current expenses. This way you can both maximize the benefit of the amazing retirement options you have access to. A special thank you to TherapyNotes for sponsoring this video. Get two months free! https://www.therapynotes.com/r/private%20practice%20skills/