The Financial Vitals Checklist is a blueprint to construct your financial life.  There are five stages and ten total steps to follow in order.  This article is a reference guide, a deep dive into each step of the checklist, explaining what to do with your next dollar.  You can click on any step of the list to take you directly to that section.  For an introduction to the Financial Vitals, an overview of your minimum savings rate, and an example of how to follow the checklist to build wealth, click here.  

Financial Vital's Checklist
Step 1 To Build Wealth
Step 1

Protect Yourself

1. Buy Disability & Life Insurance

Disability Insurance

     As you start your career, your most valuable asset is your earning potential.  You have trained long and hard to obtain a professional license and the high salary that comes with it.  Your potential is literally worth millions of dollars over the course of your career.  Nothing is more important, which is why the first step of the Financial Vitals Checklist is to protect yourself with disability insurance.

     Health care professionals are as vulnerable to injury and disability as anyone else.  As an emergency room physician, I have seen it all:  car wrecks, bicycle accidents, falls, and assaults.  We are all potentially one second away from an aneurysm rupturing in our brains or a clot finding its way to our coronary, cerebral, or pulmonary arteries.  This sounds morbid even as I’m writing it, but as medical professionals, we help these people every day!  We all know deep inside that we could be next.

     Every medical professional should obtain own-occupation disability insurance immediately.  This insurance protects against any catastrophe that leaves you temporarily or permanently unable to work in your chosen field.  Ask yourself what would happen to your financial future if you could not work.  Your student loans don’t go away because you are injured.  Your mortgage doesn’t disappear because you are sick.  Being adequately insured allows you to continue to receive a monthly income should you end up being my patient in the ER.  

     Ideally, you should purchase disability insurance during training, but if you have already graduated, buy it today.  You should purchase the maximum amount possible and pay for it through your personal accounts, even if you practice through a legal entity.  You can cancel the disability policy once you are financially stable enough to withstand a prolonged work disruption.  If you want to read more about the importance of disability insurance, click here.  

Life Insurance

     While every medical professional should buy disability insurance, not everyone needs life insurance.  Yes, we’re all going to die at some point, but that doesn’t mean we all need to insure against it.  Life insurance has little to do with you but everything to do with those who depend on you.  If you die, who is impacted financially?  The answer to this question will instruct you on if, how much, and for how long you need life insurance.  You don’t need life insurance if you are single, without children, have no extended family depending on you, and no one co-signed your student loans.  If you have any of the obligations mentioned, you need term life insurance until you are financially secure enough to cover them out of pocket.  

     There are two general categories of life insurance: term and whole life.  Whole life policies cover the insured for their “whole life.”  These policies are expensive and generally unnecessary.  They are also very profitable for the insurance companies, so beware of insurance salesmen disguised as financial planners, brokers, or advisors.  The list of exceptions is so small that it’s easier to make a hard rule: never purchase it under any circumstances.  Term life insurance is insurance for a set term, which could be 10 years, 20 years, or 30 years.  These policies are much cheaper than whole life and do exactly what you need them to do:  protect your loved ones in the case of your untimely death.  Once you have enough financial resources that your death would not financially impact your family in a significant way, you don’t need it anymore.  

     Talking about our own morbidity and mortality is difficult, even for medical professionals who are around it all the time.  However, that is precisely why you must insure yourself and your family against the unthinkable.  Do it now to protect your future, then return to happier thoughts. 

2. Emergency Fund

    Appropriately protecting yourself also entails having an emergency fund.  Once you have purchased the necessary insurance, you should save enough money to live for a few months if you lose your job or temporarily leave work.  Your emergency fund should be enough for 3 – 6 months of your monthly expenses.  The money should be kept in an interest-bearing savings account that you can easily access in an emergency.  You do not want to invest the money in your emergency fund.  The purpose of an emergency fund is twofold.  First, you can stop using your credit card to cover emergencies.  If your car tire blows or the air conditioner goes out at your house, you can cover that without resorting to high-interest debt.  Next, it will cover your expenses should you lose your job or become temporarily disabled.  

     Whether you should aim for 3 or 6 months is a function of how easily it would be to replace your job.  I always felt comfortable with a three-month cushion as Emergency Medicine jobs are plentiful.  I get at least five unsolicited phone calls, texts, or emails a week concerning ER jobs in Texas, and sometimes five per day.  If I lost my job, I’m pretty sure I could have another one by the time I got to the hospital parking lot.  I can also travel for work, should it be necessary.

  It isn’t enough to be able to get another job; you must find one that you can actually take.  Since I am married and my wife stays at home with our children, I am able to work outside of our city.  Therefore, I’m comfortable with a smaller emergency fund.  If you can’t travel for work, or if it will take you longer to find a job, you will need a larger fund.  Two notes: first, an emergency fund is for emergencies.  You should not tap into this money unless it is absolutely necessary.  Next, the lower your monthly expenses, the less your emergency fund needs to be.  This is another reason that keeping costs down will supercharge your wealth accumulation.  The lower your expenses, the lower your emergency fund, and the sooner you can move on to the next step.

Step 2 Financial Checklist
Step 2

Maximize Returns

3. Obtain Employer Match

     On your financial journey, it is essential to take the easy wins when they’re available, and someone giving you free money is about as easy as it gets.  That’s why obtaining the employer match for your retirement plan is your next most important step.  Not every medical professional is an employee, but if you are and have access to an employer match, take advantage of it.  The specifics of employer match programs vary, but the gist is the same.  If you contribute money to your retirement plan, your employer will match a part of it.  For example, your employer might have a 100% match up to the first 3% of your salary.  If you make $200,000 and contribute $6,000, your employer will also contribute $6,000. This is like getting $6,000 for free!  You can also think of it as getting an immediate 100% return on your investment. 

Other programs might match 50% up to 4%.  If you make $200,000, you would have to contribute $8,000 to get the employer to match $4,000.  This is a 50% immediate return on your investment.  Anytime you can get a guaranteed 25%, 50%, or 100% return on your investment, you should take it!  This is an easy win.  Additionally, this money will continue to grow in your account over time, so that initial return will be several times higher by the time you retire.  To complete this step, you must contribute only as much money as needed to get your full employer match.

4. Pay Off High-Interest Debt

    The next easy win that will help you maximize your returns is paying off high-interest debt.  What constitutes high interest is debatable and changes over time with the prevailing rates; however, it is always safe to say that credit card debt is high interest.  Credit card debt is a “hair on fire” type problem. When your hair is on fire, nothing is more important than putting out the flames!  Similarly, if you have credit card debt, you must pay it off quickly.  Interest rates on most credit cards are between 16 – 24%, so, paying down a credit card’s balance is the same as investing that money and earning a 16 – 24% return!   If you can receive a guaranteed return of 16% or more, you should take it every time. 

This is another easy win that will supercharge your financial life.  The first step is to stop using your credit cards until you have paid them off and can pay the balance monthly.  The next step is to list all your credit cards from highest to lowest interest rates.  Pay off the highest rate card first, regardless of the balance. Once the first card has been paid off, work your way down the list until they are all gone.  If you need to work more to make extra money until your debt is paid off, do it.  Remember that your hair is on fire.

    If you have any other high-interest debt, you should pay it off next.  I define high interest as anything beyond what I can comfortably expect to earn over the long term in the stock market, which is 9 – 10%.  Therefore, anything above 8% is considered high.  I define low-interest debt as anything below 5%.  Debt financed between 5 – 8% is a gray zone.  The decision on what to do with that debt is more complicated and will depend on your age, income, amount of debt, and individual circumstances.  

Above 8%High-Interest
5-8%Indeterminate
Less than 5%Low-Interest

5. Fund HSA (if available)

    Once you have taken any available employer match and paid off your high-interest debt, one final easy win may be available.  Your next step is to fund a Health Savings Account if you are eligible.   As always, if this step does not apply to you, move on to the next one, but if you qualify, the HSA can be the most powerful investing tool available today.  The purpose of the HSA is to be an adjunct to high-deductible health insurance; for this reason, you are not eligible unless you have this type of health insurance plan.  You can contribute money pretax to the account and then use it for qualified medical expenses, either in the year of contribution or later.  This allows you to cover some of your medical bills tax-free.

     The HSA makes this checklist at #5 because it can be “hacked” as a powerful wealth-building account.  As stated, the HSA allows you to contribute money pre-tax, meaning that you get a tax deduction for your contribution amount.  Contributions can be invested, grow tax-free, and be removed tax-free for qualified expenses at any time, which makes the HSA the only “triple tax-advantaged” account.  

     You have two options with an HSA.  You can use it to pay qualified health expenses as they arise, allowing you to pay for these expenses tax-free.   If you are young and healthy, the more financially savvy option is to max out your HSA yearly, pay cash for any qualified health expenses incurred, save the receipts, and invest your HSA contributions.  Your account will grow through your contributions and compound interest, which turns your HSA into a de facto retirement account. 

Since you will save any receipts along the way, you can pull money out at any time to cover these expenses.  Your healthcare expenses will increase as you age, and this account is a tax-free way to pay for those expenses.  Once you reach age 65, you can pull the money out of the HSA for any reason penalty-free, although you will have to pay income tax, which makes it like any other pretax retirement account.  

     The government understands this is a great deal and caps the contribution limit in 2023 at $3,850 for an individual and $7,750 per family.  At age 55, an individual can contribute an additional $1,000.  These limits will rise to $4,150/$8,300 in 2024.  A high deductible health plan in 2023 is defined as “. . . a health plan with an annual deductible that is not less than $1,500 for self-only coverage or $3,000 for family coverage, and for which the annual out-of-pocket expenses (deductibles, co-payments, and other amounts, but not premiums) do not exceed $7,500 for self-only coverage or $15,000 for family coverage.  You can find details of HSA eligibility requirements at https://www.irs.gov/pub/irs-drop/rp-22-24.pdf.

     A word of caution here:  If you are eligible for an HSA, take advantage of it.  However, high-deductible health insurance plans are not ideal.  If you are not eligible for the HSA because your insurance is “too good” to qualify, take this as a win and move on.  

Step 3
Step 3

Secure your retirement

     Sometimes in life, we are so caught up in the moment, the day-to-day functions of living, that we forget to plan for our future.  This is why the average American has so little saved for retirement.  Now that you have protected yourself and your family and have taken all the easy wins by maximizing your returns, it is time to secure your retirement.  This step will be individualized, depending on your income level, your employment status, and what types of retirement accounts you have available to you. 

6. Max Out Retirement Plan

     As you complete steps 1-5 of the Financial Vitals Checklist, you might be unable to max out your retirement plan immediately.  As long as you are saving at least 25% of your gross income, you are on track!  Eventually, your emergency savings will be fully funded, and your high-interest debt will be paid off.  Just keep working on the steps in order.  

    Roth IRA

      Most physicians and dentists will make too much money to invest in a Roth IRA once they have completed training.  In 2023, eligibility begins to phase out at $138,000 for individuals and is completely phased out by $153,000 (married filing jointly $218,000 – $228,000).  Medical residents can typically contribute to a Roth and may be able to contribute the year they transition from a resident to an attending, depending on how much they earn.  Other medical professionals, such as veterinarians, APPs, and chiropractors, will vary.

    If eligible, your next step should be to fund a Roth IRA.  In 2023, the Roth IRA allows an individual to contribute up to $6,500 ($7,500 if age 50 or older), and a spouse can contribute the same.  Contributions are post-tax, meaning with money that has already been taxed.  While this does not save you anything on taxes up-front, the benefit of the Roth IRA is that contributions grow tax-free and can be withdrawn at retirement age tax-free.  Someone with $1 million in their 401(k) or other pretax retirement account is not actually a millionaire.  If they try to remove that money, they will pay income tax.  Whereas if someone has $1 million in their Roth IRA, they genuinely have $1 million.  The government knows how valuable this tax-free growth is, which is why there are eligibility requirements and contribution limits.  

     If you are over the income limits and still wish to participate in a Roth IRA, you can do a “backdoor” Roth IRA.  This article from the Physician on Fire blog does a nice job of explaining the process.  https://www.physicianonfire.com/backdoor/.  

Pretax Retirement Accounts

    Depending on your employer and employment status, several pretax retirement accounts are available.  These include the 401(k), 403B, 457, SEP-IRA, and the Solo 401(k).  All pretax retirement plans are similar, so while I will discuss the more common 401(k), you can extrapolate it to your account type.  The government created these accounts to allow individuals to take control of their retirement savings.  The government allows you to contribute a defined amount each year without taxing it. 

You can then invest the money, which grows tax-free until retirement age, when the government will tax any distributions at your ordinary income rate.  This allows you to save money equal to your marginal tax rate times your contribution in the year you make it.  If you are in the 37% bracket and contribute $66,000 to your SEP-IRA, you will save $24,420 in taxes for the year.  Therefore, pretax accounts are more valuable for high-income earners with a higher marginal tax rate.  

     You’ve already received your company match in step two, so now you can go back and resume contributions.  At this point, you want to dive deeper into the investments inside your 401(k).  Remember that a 401(k) is an investment account, not an actual investment.  You will have to choose your investment strategy within the account.  Since you are not receiving a match on this money, you want to know exactly what type of investments are available inside your employer’s plan and what fees they charge you.  All 401(k) plans are not created equal.  You want to invest in a diversified portfolio while paying the lowest fees possible, which usually means investing in low-fee, broad-based index funds or a low-fee target-date fund.  Keeping your fees low has been shown to increase your returns over time.  

     401(k) contribution limits for 2023 are $22,500 for the employee and $66,000 total (employee + employer). Your goal is to max out the employee contribution every year, particularly if you are in a higher tax bracket (>24%).  How much more you need to invest in this strep to max out your plan will depend on how much you already contributed to obtain your employer match.  To max out your 401k, subtract your previous contribution from $22,500 to find the amount you need to contribute.  

     Not everyone is an employee or has an employer that provides a 401(k).  You still have options if you are self-employed, an independent contractor, or your employer doesn’t provide a retirement plan. For the self-employed, including ICs, there is the SEP IRA and the Solo 401(k).  These accounts have some advantages over an employer-sponsored 401(k). 

First, the contribution limits are much higher than the 401(k) because you contribute as both the employer and employee.  Next, you have complete control over the investments within the plan, allowing you to choose low-cost, diversified investments.  Finally, you can contribute through April 15th for the prior tax year.  This feature is particularly beneficial for new graduates, as they may have delayed payments or have a lot of expenses as they start their careers, leading to an inability to max out their retirement plan the first year.  This is a great way to catch up for the prior year.  The SEP is easier to set up but has the drawback that you cannot perform a backdoor Roth if you have an IRA.  Solo 401(k) plans are slightly more challenging to set up and maintain but allow for the backdoor Roth option.

    You aim to get money into your retirement account as early as possible, letting compounding interest take effect.  As a medical professional, you will likely be in a high marginal tax bracket, meaning the money you save from a pretax contribution is significant.  Money in a pretax retirement account grows tax-free.  You must pay taxes when you withdraw the money during retirement, but if you start early, the money will have grown tax-free for 30+ years.  Additionally, you may be in a lower tax bracket upon retirement than you are now.  

     If you are a medical professional making on the lower end of the income scale, this step is where you may start to feel the pinch in your budget.  You may hit the 25% savings rate before you have maxed out your retirement account.  Resist the urge to postpone your retirement account contributions at the beginning of your career.  If needed, cut back on your lifestyle, but ensure you hit the 25% savings mark.  The money you invest now has the most time to grow and is thus the most valuable money you will ever save/invest. Only move on to the next steps once you have completed step 6.  If you are struggling, review your budget again to see if there is any waste you can eliminate.  The lower your monthly budget, the easier it is to plan for retirement, and the sooner you can accumulate wealth.  

Step 4 Build Wealth
Step 4

Get Wealthy

7. Accumulate Assets

  Once you reach step 7, you have already laid a solid foundation for your financial future.  In fact, if you stop here, you will eventually have a solid retirement.  However, if you have reached this point and are either still below a 25% savings rate or have decided to save more than 25% of your gross income, it’s time to get wealthy!

    In this step, you have some freedom to make choices.  The path forward is only partially prescribed because you’ve already done so much groundwork.  You can now use your money to continue investing in the stock market, start a business, invest in real estate, or participate in other activities that increase wealth.

Invest in Securities

    Another way to invest in securities (stocks & bonds) is through a brokerage account.  This is a personal investment account that you set up and control.  No contribution limits or income caps exist as this is not a retirement account.  You make contributions with money on which you have already paid income tax.  For this reason, a brokerage account is sometimes called a post-tax account.  This makes the contributions to your brokerage account just like money put in your checking or savings account. 

However, in this case, you can use the money to invest in stocks, bonds, mutual funds, index funds, or ETFs.  Any growth in this account will be taxed.  If you keep the investment for less than one year, it will be taxed as ordinary income – if longer than one year, as long-term capital gains.  As the capital gains tax rate is less than the marginal tax rate, you can still increase your wealth in a tax-advantaged manner.

    There are several benefits of having a brokerage account as an adjunct to your retirement savings.  First, as a high-income professional, 25% of your gross income usually maxes out your retirement savings limit.  A brokerage account allows you to continue investing, creating wealth for you over the long term.  Additionally, the money in your brokerage account is liquid, or easily accessible, should a better investment opportunity arise.  You will pay capital gains tax on any gains you withdraw, but the money is still accessible without a penalty. 

A brokerage account gives you flexibility should you plan to retire early.  Since you can’t access your retirement accounts until traditional retirement age without penalty, you can draw on your brokerage account to bridge the gap should you retire early.  Perhaps the most significant benefit of a brokerage account is its simplicity.  As a busy professional with a career to manage, investing in a brokerage account is often the best option in Step 7 for building wealth.  Running a business is hard work.  Real estate investing is also not passive, regardless of what you see or hear.  However, a brokerage account can be passive if you automate your saving and investing strategy.  

    Rental Real Estate

    As a medical professional, you can invest in real estate in Step 7, but not before.  Because you have a high income, you can build wealth automatically through your retirement accounts easier than the average American.  Not everyone can take this path and must choose other avenues to build wealth.  All real estate investing comes with risk and takes work.  However, if you are interested in real estate, this is the time to do it, as your financial bases are covered. 

Note that I am talking about income-producing rental real estate, not your primary residence.  Real estate can grow your wealth in myriad ways: cash flow, appreciation, leverage, mortgage paid down, depreciation, and tax advantages can all work together to grow your wealth using Real Estate.  A thorough discussion of real estate investing is beyond the scope of this discussion.  However, there will be plenty of articles about real estate in future articles.  If you want, check out www.biggerpockets.com for further information.

    Start a Business

    Starting a successful business is the most active way to grow your wealth, but it can also be the most lucrative.  While not for everyone, this is an option for the budding entrepreneur.  You have earned the ability to take some chances, including risking your time and money in a business that ignites your passion.  Your new venture may be a medical practice, a medicine-adjacent business, or something completely unrelated.  Freedom, optionality, and creativity are the hallmarks of small business.  You get to decide!  While every investment type involves risk, starting a business is generally a high-risk, high-reward endeavor and is not for the faint of heart.  

Step 5
Step 5

Fine Tune Your Finances & Give Back

         Steps 8-10 do not have to be followed in this exact order and can be modified based on your circumstances and preferences.  You have protected yourself, scored some easy points, secured your retirement, and are on the path to becoming wealthy.  You’ve earned the ability to make some decisions!  

8. Prepay Future Expenses

College Savings

      Perhaps the most common prepaid expense is college tuition for your children.  No matter how much you want to, you can’t worry about this before step 8.  We learn in emergency medicine that when dealing with a critically ill or injured pregnant woman, the mother’s health must take priority – If the mother dies, the baby dies, too.  Once you have stabilized the mother, you can move on to assess the fetus. 

There is also an order that must be followed when dealing with your finances.  You can only worry about college savings for your children once you have taken care of yourself.  Your children can always get scholarships, financial aid, or loans, but there is no loan for your retirement.  You transfer that responsibility to your offspring if you don’t secure your retirement.  As someone who supported my mother when she was elderly and who currently helps support my mother-in-law, this is not a burden you want to leave to your children.    

     There are several options when it comes to saving for your children’s higher education.  You can create a separate account to save money for college, investing the money in a target date retirement fund.  You can save and invest using a 529 Plan (college savings plan or prepaid tuition plan).  Some purchase a rental property on a 15-year mortgage, timing it to be paid off when your child reaches college age.  You can spend time and effort preparing your child to receive merit scholarships or other financial aid.  You can consider junior college, which saves a tremendous amount of money and allows you two additional years to save/invest.  A good resource for examining some of these options is www.savingforcollege.com.  

529 Plan

     A 529 plan is a federally recognized state-sponsored college savings plan.  A family member can set up a 529 for a minor child to save and invest money for future higher education expenses.  These are custodial accounts where the control remains with the account owner (parent, grandparent).  Contributions made to the plan are tax-free at the state level only, but any investment returns in the plan grow tax-free and can be distributed tax-free as long as they are used for qualified expenses. 

Plan specifics vary by state, including contribution limits, investment options, and fees.  You do not have to use your home state’s plan, nor must your child attend college in the state that sponsors your chosen plan.  However, you only receive a tax deduction using a plan in your home state.  529 plans are especially advantageous for those who live in a high-tax state or have young children when they reach step 8.  Because there is such variability from state to state, I suggest further researching 529 plans before opening one.  

9. Pay Off Low-Interest Debt

     At this stage, you should pay off any intermediate-interest debt (5-8%) you have not previously retired.  You then have the option to work your way down to the low-interest debt (<5%).  Examples include personal mortgages, rental real estate mortgages, student loans, personal loans, or consumer debt.  The decision to pay off low-interest debt comes down to your personal feelings on optimization, security, and convenience.  

     Traditionally, the stock market has returned 9-10% over time.  Many real estate investments will have returns in this range or higher.  Even savings accounts and money market funds currently pay around 5% interest.  Mathematically, keeping low-interest debt and investing your money is optimal, as your return should be higher over time.  Note that the previous sentence included investing your money, should, and over time

First, you actually have to invest your money.  You need to automate your finances so that you are investing regularly.    Even if you are okay with a 5% interest rate, most banks aren’t paying that.  You must actively seek out the ones that do.  Also, spending money sitting around in a savings account is tempting, and once you spend it, it can no longer be invested.  Next, just because the market has had a historically high return does not mean that it will continue in the future.  These average returns are usually calculated over 30-year periods, and any shorter time-frame may have different results.  As you age and approach retirement, your time horizon may no longer match with “over time,” and your risk tolerance may no longer handle “should.”  

     We have discussed that paying off a debt is akin to securing a guaranteed rate of return equal to the interest rate.  As you approach retirement, this guaranteed return may become more appealing to you.  There is security in not having a mortgage payment.  There is freedom in being student loan-free.  These concepts can’t easily be measured, but they are real, and you must decide how valuable they are to you.     

Personal Mortgage 

     Any decision regarding your personal residence can be emotionally charged as many people have a deep connection with their home.  I understand the feeling, but since a primary home is the largest asset most people own, I encourage rationality.  When you are in the fine-tuning stage of your financial journey, it is perfectly acceptable to pay off your personal mortgage, whether it is mathematically optimal or not.  A deep sense of security can be obtained when you are mortgage-free.  Plus, your monthly expenses decrease dramatically when you no longer pay a monthly mortgage.  Remember that you will still be responsible for insurance, taxes, and repairs, even if the mortgage is paid off.  

     My only recommendation is to pay off your house by the time you retire.  If you have been following the Financial Vitals Checklist, you will be financially secure by retirement, so you can manage a mortgage payment even if you are no longer working.  But why deal with the additional stress, risk, and hassle of debt when it isn’t necessary?  I am financially independent, yet I still have a mortgage.  This is because I have a 2.99% mortgage rate and enough cash in the bank to pay it off at any time.  I am collecting an average of just over 5% on my savings, and that 2% spread is why I have yet to pay off my house.  I will pay off the mortgage if and when I decide to retire.  

10. Be Charitable 

     We have reached the last and most personal step in the Financial Vitals Checklist – Be charitable.  I am not suggesting you wait until you reach step 10 to be charitable.  I encourage being generous with your time, money, and attention throughout your life.  Before step 10, if you are tithing or regularly donating money, it should be in your budget as an expense, and it does not count towards your 25% savings rate. 

You should feel it, as charitable gifts take away from the money you spend each month, not the money you save/invest.  This forced austerity is kind of the point of tithing anyway.  Once you have reached this phase of your life, we are discussing legacy giving.  As a high-income earner, if you follow this checklist throughout your career, you will become wealthy – it is simply a matter of time.  One of the things you may choose to do with that wealth is give it away.  

     Unfortunately, philanthropy can be more complicated than it would seem.  Charitable gifts are tax-deductible, but like personal mortgage interest, the deduction goes away if you take the standard deduction.  Even if you itemize, there is a limit on how much you can deduct per year.  You can currently deduct donations to public charities, including DAFs, up to 50% of your adjusted gross income (AGI). 

If you are donating appreciated non-cash assets, the limit is 30% of AGI.  You can carry it over for up to five subsequent tax years if you exceed these limits.  While this may not sound like a problem now, if you have amassed a large amount of wealth in non-income-producing assets, your AGI will be quite low when you retire, especially if you retire early and are not drawing from pretax retirement accounts.  These tax-planning concerns are why you should plan your future charitable giving while fine-tuning your finances.      

Conclusion

     You can download a copy of the Financial Vitals Checklist here.  I hope this reference guide has helped you understand each step of the pathway you are to follow.  Look for further articles with even more details on each step here at Business Is The Best Medicine.  If you have questions, please leave a comment below, or you can email me at info@BusinessIsTheBestMedicine.com.