Personal Investments • Recently Disabled doctor -things I should change?

-Still earning around 100K per year doing nonclinical work. Maxing current contributions to 401k as ROTH. Not sure how much longer I will work.
- collecting on group disability policy that will pay $125,000 TAXABLE income per year until I am 67 or death. Indexed to inflation up to 3% per year
-Collecting on private disability policy that provides $175,000 TAX FREE income per year until 67 or death and indexed to inflation up to 3% per year.

Your $5 million in investments will also be generating at least 2% a year in interest and dividends which would be another $100K in investment income but some of that will be in your retirement accounts.

Combined that is $500K a year. A lot of that will go to taxes but even though your situation has changed you should have no money worries.

As your kids launch your expenses will likely go down.

You and your spouse will also get Social Security somewhere around the time your disability insurance ends at 67.

Your disability payments may not be adjusted for inflation so keep that in mind in your long term planning.

- Assets
5 million total net worth excluding house.
-1.4 million in traditional IRA.
-200k ROTH IRAs
-400K 529s
-3 Million in liquid savings/investments 90% stocks/ 10% bonds.

It was not clear what your overall asset allocation is including your retirement accounts but even before your accident an asset allocation of 90/10 was very agressive for a 45 year old. There are endless threads about what the "right" asset allocation is but if I was in your situation I would likely not more than 70 or 80 percent stocks but that is just me.

Any thing else to do differently?

1) If you have not already it would be good to talk to a an estate planning lawyer to start working on an estate tax plan. The estate tax exemptions are set to be reduced in 2026 and your investments could grow to be well beyond the exemption limit and there is no telling what they will be decades from now.

2) I would make sure that your investments in your taxable account are set to not automatically reinvest interest, dividends, and capital gains distributions. That way you can manually reinvest these to make sure that your asset allocation is what you want.

Statistics: Posted by Watty — Thu Sep 26, 2024 8:09 pm — Replies 6 — Views 1050

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