Q&A on Retirement Planning

February 28, 2012

Today's guest blogger is Mike Hegwood, Assistant Vice President of Brokerage Marketing. Mike joins us to address some common questions about retirement planning, a topic which can be as complex as it is vital to any physician's future.

Chris Burke, Former President, AMA Insurance Agency

Q. What do 401(k) holders need to know about the coming Labor Department regulations regarding 401(k) disclosures?

A. Later this year, the Labor Department is slated to issue new regulations that will require plan providers to disclose the fees being charged to participants. Physician-employees need to understand how fees impact their retirement savings. Most don't think a small change in fees (such as 50 basis points, or 0.5%) has much of an effect, but it really does. According to the United States Department of Labor, "a 1% difference in fees can reduce your account balance at retirement by 28%." Apply that to an account balance of $100,000, for example, and you have only $72,000 for retirement. That's a pretty significant amount of money to leave on the table.

If you're a 401(k) plan participant, these new regulations will benefit you by revealing the actual fees being charged. This knowledge will put more pressure on plan providers to better manage the plans they offer, and to look for lower cost alternatives in the market, such as the Physicians 401(k) Plan available through Millennium Brokerage Group, an AMA Insurance Agency Physician's Financial Partner.

It's equally important that plan providers (employers) understand how these regulations will affect their practices. For an overview, read my article in Modern Medicine.

Q. What should a physician know when considering the Physicians 401(k) plan versus a standard plan?

A. The Physicians 401(k) plan is structured as a Multiple Employer Plan (MEP). This means that the plan can incorporate many different employers, ranging from sole practitioners to large practices with several physicians. The MEP design makes it a good option for many medical professionals. It's important to note that the Physicians 401(k) plan also offers lower costs and fees than many traditional plans, so it's certainly worth exploring.

To learn more about the Physicians 401(k) plan, contact a service professional by phone at 855-377-4015 or via email at

Q. How can I determine how much I should be contributing to my retirement savings?

A. Many factors influence the answer to this question…enough, in fact, that it warrants a separate blog post, soon to come!


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