Education
Professionals
The information provided here is for general educational purposes only and is based on common financial assumptions and estimates. It should not be considered personalized financial advice. Before making decisions about investments, retirement planning, taxes, insurance, or business strategies, consult with a qualified financial advisor, tax professional, or other licensed expert who can review your specific situation.
Income & Taxes
What are strategies professionals use to help reduce their tax liability?
High-income professionals often use 401(k) contributions, backdoor Roth IRAs, health savings accounts (HSA), deferred compensation plans, and charitable giving through donor-advised funds to help reduce taxable income. Working with a CPA better ensures strategies stay IRS-compliant. Each strategy has its risks and limitations though. Seeking guidance from an experienced financial advisor may help you better align those strategies with your risk tolerance.
Should I use a 1099 contractor setup or W-2 salary?
Many physicians, attorneys, and consultants earn both W-2 income and 1099 income. Using an LLC or S-Corp for 1099 work may reduce self-employment taxes and provide access to business deductions.
What tax strategies may help with student loans?
Physicians and lawyers with large student loan debt often explore income-driven repayment (IDR), Public Service Loan Forgiveness (PSLF), or refinancing. Coordinating loan repayment with retirement contributions balances long-term financial goals.
Investments & Wealth Building
What are some commonly used investment strategies for high-income professionals?
Though everyone’s situation is unique, diversifying across stocks, bonds, REITs, private equity, and annuities can help build long-term wealth. Many high earners also invest in taxable brokerage accounts once 401(k) and IRA contributions are maxed out. A dedicated financial advisor can design a plan tailored to your specific retirement needs.
Should I use a financial advisor if I’m a high earner?
A fiduciary financial advisor can help with tax planning, retirement accounts, investment strategies, estate planning, and insurance coverage. Advisors often coordinate with CPAs and attorneys for a complete wealth plan.
How much should I be saving for retirement as a professional?
Some investors look to guidelines that suggest saving a significant portion of income across accounts such as 401(k)s, cash balance pension plans, backdoor Roth IRAs, and brokerage accounts. High earners may also consider defined benefit plans as a way to increase tax-deferred contributions, depending on their circumstances.
Insurance & Asset Protection
What insurance do doctors and lawyers need?
High-income professionals often need disability insurance, malpractice insurance, umbrella liability coverage, and life insurance. Asset protection is critical for protecting income and wealth.
How can I help protect my assets from lawsuits?
Professionals often use LLCs, trusts, umbrella insurance, and retirement accounts (which may be creditor-protected). Attorneys and doctors especially benefit from asset protection planning as part of their estate strategy.
Should I buy into a partnership or private practice?
Joining a law firm partnership or medical practice buy-in can grow wealth but carries risks. Review partnership agreements, buy-sell agreements, and malpractice liability insurance before committing.
Student Loans & Debt
Should I refinance my medical school or law school loans?
Refinancing student loans can help lower your interest rate, but it may eliminate benefits like Public Service Loan Forgiveness (PSLF) or income-driven repayment plans. Many physicians and attorneys refinance once they have stable income and don’t qualify for forgiveness.
Is Public Service Loan Forgiveness worth it for doctors or lawyers?
PSLF is valuable for professionals working at nonprofits, hospitals, universities, or government agencies. After 120 qualifying payments under IDR (income-driven repayment), remaining student loan debt is forgiven tax-free.
Should I prioritize paying off student loans or saving for retirement?
High-income professionals often balance both- making aggressive student loan payments while contributing to 401(k), backdoor Roth IRA, or a cash balance pension plan. Retirement savings grow with compounding, so don’t wait too long.
Can I deduct student loan interest if I’m a high earner?
Student loan interest deductions phase out at higher income levels, so many doctors and lawyers don’t qualify. Instead, using refinancing, loan repayment programs, and maximizing retirement contributions may help reduce your overall tax bill.
