Putting money aside for retirement is almost impossible as a physician with strict caps on qualified plans and very high tax rates. In fact, there are four stages of taxes that hurt physicians’ ability to plan for retirement.
Income Taxes as they are paid
Capital gain Taxes with business success
Taxes on withdrawn amounts (income)
Taxes on inheritance, estate, and transfer at death
The Physician’s Institutional Life Legacy (PILL) plan sets up a Life Insurance policy for any employee of the administrator’s choosing, in which additions to the plan are not under restriction. The employer can “gross-up” the amount provided as a bonus to balance out tax liability. The high level physicians using the PILL plan can also build on this compensation benefit and, depending on the situation, Guaranteed issue could be an option. The employee uses the PILL benefits to defer taxes and when they choose to surrender, they can take out their money without being taxed.