INDUSTRY
October 26, 2020

7 Key Financial Planning and Investing Tips For CRNAs in 2020

Doctor with stethoscope writing and using calculator

This is a guest article by Shannon Klug, ChFC, CDFA, CLU, RHU, REBC, CASL, RICP, CTS, Founder and President, Blumark Advisors

It may be years before we understand the true scope of the long-term societal impact that the coronavirus pandemic has had on our nation and the world. But one of the immediate challenges is keeping up with the myriad ways in which COVID-19 has changed the way we think about our health, safety and financial security. With historic recessionary pressures and a job market that has been hit hard by the pandemic, assumptions go out the window and new variables are introduced into the critical financial decisions we make to protect ourselves and our families both in the near term, and in the long run.

Those pressures—and those difficult choices—are keenly felt by medical professionals, who are often simultaneously navigating both enormous professional challenges and personal stresses. Certified Registered Nurse Anesthetists (CRNAs) are no strangers to workplace pressures or the importance of making thoughtful and strategic decisions under enormous pressure. But the current set of circumstances is unlike anything anyone has faced before. 

Which is why it is important that CRNAs, who are such a critical piece of the patient care puzzle for healthcare institutions across the country, have all the information and insights they need to successfully manage and leverage their evolving financial situations in a post COVID-19 environment. 

The following tips, tactics, priorities and best practices are designed to help them do just that.

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1. Audit your spending and saving 

Very few of us are spending and saving the way we were before COVID-19 changed everything. And the impact of the pandemic has been variable, with some families and individuals struggling, and others actually left with more discretionary income, as spending on travel, gas, and entertainment plummets. Given how much has changed, it’s important for CRNAs to reevaluate their spending and saving habits in light of these changes. 

As you go through the process, consider what the impact might be on your longer-term financial planning strategies.

  • More cash on hand might make this the perfect time to expand your investing and savings. 
  • A cash flow reduction will likely mean some belt-tightening and modified spending habits. 
  • For the vast majority of investors, bad habits are far more harmful than bad investments. 

2. Contribute to a Roth IRA

Because they are generally well-compensated, most CRNAs are ineligible to contribute directly to a Roth IRA. But one of the silver linings of any pandemic-related income reduction is that some CRNAs may qualify to contribute. Additionally, they may be able to convert old retirement plans to a Roth IRA with less significant income tax ramifications. A Roth Conversion will likely result in some short-term increased tax obligations, but the potential long-term benefits more than outweigh the near-term hit.

3. CARES Act early IRA withdrawal 

Any CRNA who has experienced poor health or seen their financial situation change for the worse as a result of the pandemic may have some new financial flexibility as a result of provisions of the CARES Act designed to allow additional access to assets. As part of the legislation, the 10% early withdrawal penalty for funds withdrawn from traditional and employer-based IRA accounts has been waived. In addition, taxes on those early withdrawals can now be paid out in installments over three years instead of immediately. 

4. Plan ahead for tax-bracket busting

Experienced financial professionals understand the value of tax planning—specifically, strategically moving between tax brackets to take full advantage of different financial opportunities. With many CRNAs experiencing a higher-than-usual degree of income variability, there may be even more opportunity to optimize your tax planning. One important note: to take full advantage of the most valuable opportunities, start early. Many tax strategies require beginning now to make plans for next year’s filing.

5. Turn market volatility to opportunity 

With the unusually steep swings in the marketplace, and the volatile nature of a market that continues to ebb and flow in response to new developments, CRNAs and their advisors should be alert to the possibility of turning market volatility into opportunity. Any dramatic market movement is likely to be followed by an equally strong recovery or correction. 

Consequently, those who are attuned to the market likely find themselves with a higher than usual number of opportunities to harvest their losses, and to subsequently take advantage of alternative strategies designed to not just mitigate those losses, but ultimately yield significant gains.

6. Research financial opportunities for healthcare workers 

Tumultuous times can change perspectives in a hurry. Even committed caregivers may find themselves reevaluating long-held assumptions or revisiting long-settled career plans and retirement timelines. The good news is that when it comes to changing those plans, CRNAs may have more flexibility today than at any time in recent memory. 

Many insurers and financial institutions have responded to the extraordinary work that healthcare professionals and other frontline pandemic workers are doing by offering newly flexible options for underwriting new policies, opening new accounts, or changing the terms and conditions around pre existing conditions. So don’t make any assumptions about what you can and cannot do: conduct your due diligence and don’t be afraid to ask for new options and new protections. Because you just might get it.

7. Get help from a financial adviser 

It’s important to understand that financial planning is an ongoing endeavor—not a one-off; a process instead of an event. And with big structural changes taking place with increasing regularity amidst the uncertainty of a pandemic economy and job market, keeping up with that process typically requires the help of a trusted financial advisor. 

Look for financial advisers who, 

  • Has proven experience working with CRNAs and who can demonstrate a deep understanding of opportunities and obligations facing healthcare professionals.
  • Understands the impact of education and testing timelines, the challenges of the credentialing process, and the importance of managing what are often substantial student loan obligations. 
  • The best professionals in this space can help CRNAs understand and address rapidly evolving financial-planning complexities and help them do what they do best: serve as critical caregivers and pillars of the healthcare community.

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Shannon Klug, ChFC, CDFA, CLU, RHU, REBC, CASL, RICP, CTS

is the Founder and President of Blumark Advisors

Learn more at www.blumarkadvisors.com 

6915 Rochester Road, 

Suite 400, Troy, MI 48085 

(248) 289.1647 

Securities and investment advisory services offered through Royal Alliance Associates, Inc. (RAA), member FINRA/SIPC. RAA is separately owned and other entities and/or marketing names, products or services referenced here are independent of RAA.

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