Evolving Employment: Retiring as a Medical Professional

Trent Bradshaw CFP®, AIF® & Brandon Rogers CFP®, AIF® |

Plan for Retirement Early On In Your Career

We cannot stress enough how important it is to start planning for retirement early on in your career. It’s something that all young doctors should consider. There are aspects of retirement planning for doctors that you can even begin while you’re still in residency or medical school. As a young physician, retirement often seems like a lifetime away. But like with paying off your student loans, planning for financial stability and future wealth when you’re young should be at the top of your to-do list.


A sound financial plan begins with:

  • Creating a budget
  • Earmarking a certain amount of funds for savings and investments
  • Contributing to retirement plans as soon as you’re eligible

Additionally, both disability insurance and life insurance cost less for young, healthy people than for older adults with health conditions. By getting these policies when you’re young, you’ll save money in the short term and set up a safety net for the long term.


Maximize Contributions to Retirement Plans

For most employees in most industries, pension plans are a thing of the past. And as a physician earning a high income, you simply cannot rely on Social Security as a primary income source to get you through retirement. Establish retirement accounts and make sound investments throughout your career to retire comfortably. As soon as you become eligible to contribute to a retirement savings plan, do so.

Types of Plans to Consider:

  • 401k
  • 457b Deferred Compensation Plan
  • Traditional IRA
  • SEP IRA: Simplified Employee Pension
  • Roth IRA


Put Money Into Varied Investments

Saving money in a retirement account is key to planning for the future, but you’ll need to make other investments as well - we recommend talking to your financial advisor and tax professional about how to optimize your investments. Investment Opportunities to Consider:

  • Stocks, Bonds, Mutual Funds, ETFs, and Index Funds
  • Real Estate

As you move through different stages of your career, revisit your retirement plan to ensure that you’re still on track to reach your goals.


Maximize Your Retirement Plan Mid-Career

Mid-career is the time to make more aggressive investments, buy more real estate, and put as much money as possible into various retirement accounts. As you near retirement age, you can shift your money into safer investments to ensure that your money will be there when you need it.


How to Know When It’s Time to Retire

The more years you work, the more likely you may experience burnout. And if you’re feeling burned out after the age of 60, it may be time to start thinking about retiring. You simply have to consider your own well-being and settle on a retirement age that will afford you enough years to enjoy your life after medicine. It may be time to consider working part-time, cutting back on hours and responsibilities, or bringing another physician into your practice to shoulder some of the workload. As long as you maintain your medical license, you can practice as little or as much as you prefer. Your appropriate retirement age can only be determined by you and your circumstances. Talk to a financial professional if you need guidance.

Things to Remember:

  • Life Expectancy Is Increasing
  • You Can Retire and Still Work


How to Retire When You Don’t Think You’ve Saved Enough

Experts recommend saving 10-15% of your pre-tax income every year that you work to have enough money to sustain your lifestyle in retirement. But let’s be clear: this is the bare minimum you should put aside. Financial experts say that if you want to live a comfortable life in retirement, you should aim to live on 70% to 80% of your pre-retirement salary.


As You Approach Retirement Age, Save More

Depending upon how much money you’ve put aside, the years leading up to retirement may require you to save more aggressively. You can do this by cutting back on your spending habits a bit, ceasing to give your adult children money, or shifting risky stock investments into safer funds.

Older physicians approaching retirement age often think that they should continue working. And for some, that’s the right choice. But if you want to retire in your early sixties, you can – it just requires the proper financial planning. If you’re ready to start planning for retirement or need to ensure that your current plan is sound, contact us now to talk it over at (704) 216-2260.


Adapted from Physicians Thrive