WCI #365: Disability Insurance with a Friend of WCI
May 2, 2024
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Dr. Tyler Scott, a licensed dentist turned financial planner, discusses the importance of disability insurance for all doctors. Topics include HSAs, saving for future home expenses, capital gains taxes, and cleaning up investment accounts.
Maximize HSA contributions for family members, even if not on same plan.
Consider separate employer plans in two-doctor families for HSA optimization.
Utilize 'squirrel funds' to save for future expenses and ensure financial stability.
Deep dives
HSA Contribution Clarification
As per the rules, the individual can make an HSA contribution of $4,150 even if only covered by a high deductible health plan. A full family contribution can be made if a separate child is included in the plan.
HSAs for Two-Doctor Families
For two doctor families with different employer plans, it can be beneficial for each spouse to be on a separate high deductible health plan to maximize employer contributions and individual catch-up contributions at age 55. However, having multiple plans can lead to multiple deductibles and out-of-pocket maximums if significant medical expenses arise.
Using HSA Funds for Family Member's Medical Expenses
HSA funds can be used for family member's medical expenses regardless of whether they are currently covered by a high deductible health plan. Once the money is in the HSA, it can be used for eligible healthcare expenses at any time.
Complexities of HSA Contributions in Two-Doctor Families
There are various factors to consider when managing HSA contributions in two-doctor families with different employer plans, including optimizing employer contributions, individual catch-up contributions, and the potential drawbacks of multiple deductibles and out-of-pocket maximums.
Simplifying Investments and Legacy Holdings
A radiologist making $450,000 seeks advice on simplifying investments after firing their financial advisor. They plan to transition their 37 individual stocks, 29 ETFs, and 18 equity mutual funds to a three-fund portfolio with an 80/20 asset allocation. The discussion includes considerations on capital gains taxes, selling legacy investments, and the balance between simplicity and tax efficiency.
Building Squirrel Funds and Emergency Funds
The podcast emphasizes the importance of setting up 'squirrel funds' as a strategy to save for inevitable future expenses like home repairs and car purchases. Differentiating from emergency funds, squirrel funds help in planning for significant expenses, providing a safety net for financial stability. With automated monthly transfers, individuals can build funds for various categories, ensuring financial readiness for unexpected costs.
Today our friend Dr. Tyler Scott is joining Dr. Dahle to talk about disability insurance as well as to help answer your questions. Dr. Scott is a licensed dentist turned financial planner as well as a columnist here at WCI. Dr. Scott is here to preach the message that all docs need disability insurance and shares his story of going on disability. Later they talk about HSAs, saving for future home expenses, capital gains taxes, and how to clean up a disaster of an investment account and more.
Today’s episode is brought to you by SoFi, helping medical professionals like us bank, borrow, and invest to achieve financial wellness. SoFi offers up to 4.6% APY on their savings accounts, as well as an investment platform, financial planning, and student loan refinancing…featuring an exclusive rate discount for med professionals and $100/month payments for residents. Check out all that SoFi offers at https://www.whitecoatinvestor.com/Sofi *Loans originated by SoFi Bank, N.A., NMLS 696891. Advisory services by SoFi Wealth LLC. The brokerage product is offered by SoFi Securities LLC, Member FINRA/SIPC. Investing comes with risk including risk of loss. Additional terms and conditions may apply.
The White Coat Investor has been helping doctors with their money since 2011. Our free financial planning resource covers a variety of topics from doctor mortgage loans and refinancing medical school loans to physician disability insurance and malpractice insurance. Learn about loan refinancing or consolidation, explore new investment strategies, and discover loan programs specifically aimed at helping doctors. If you're a high-income professional and ready to get a "fair shake" on Wall Street, The White Coat Investor is for you!