We all have to face retirement eventually. But for you as a physician, planning to live out your golden years in the lifestyle you’re accustomed to requires strategic action now.
Retirement planning has changed significantly over the past few decades. Not only is the average life expectancy longer (70.40 years as of 2025, compared to 73.70 in 1980), but the types of investments available in the past have changed to meet the needs of the Digital Age.
Wherever you are in your career right now, it’s a great place to start your financial journey to retirement. To help you get started, we’ve created this simple guide for physicians.
1. Start With a Budget
You’ve probably heard the saying “The more you make, the more you spend.” It’s a common aspect of life that we all tend to slide into without realizing it. The financial term for this is lifestyle creep, which refers to how we tend to increase our material quality of life with our income status. But when you monitor your finances and create a budget, it’s easier to avoid the dangers of lifestyle creep taking over your retirement funds.
If you’re unsure where to start with a budget, consider using the ever-popular 50/30/20 rule.
Start by totaling your monthly net income. Split that number in half, and use that amount to cover your necessities, such as rent/mortgage, utilities, car payments, etc. Then, divide the second half of your income into 30% and 20%. Use 30% of your budget on wants, like leisure travel, entertainment, or dining out. The remaining 20% is allocated to paying off debt and investing in savings.
Since you’re always using a set percentage for your expenses, you’ll continue to have the same proportion of income allocated to savings once your debts are paid, and your lifestyle creep will always be incremental.
2. Pay Off Debt and Start Saving
Early in your savings journey, it can be confusing to decide whether to pay off debt or build a nest egg. While having an emergency fund and starting to harness the power of compound interest in your portfolio are important factors, the reality is that if you’re paying interest on debt, you’re spending more than you’re earning.
Credit card debt is particularly dangerous. Review your terms, and consider paying off any cards with high interest rates as soon as possible. Then, move to other loans or debt with interest rates, and evaluate those agreements. You may see that the faster you pay off your debts, the sooner you can start putting those monthly payments into your savings and investments instead.
Saving for an emergency fund helps reduce the damage caused by unexpected expenses. Your 20% can also go toward long-term goals, such as buying a home, continuing education for your children, and retirement planning.
3. Begin Your Portfolio With Investments and Asset Protection
While you work toward a debt-free life, you’ll likely invest in employer-sponsored programs like a 401(k). However, you can still take advantage of these retirement plans if you’re self-employed and pay in as both employer and employee.
Investments go beyond the basic retirement plans, though. Your health insurance policies are considered an investment, as they protect your wallet from the impact of medical issues, both short- and long-term. Disability insurance is an often inexpensive way to ensure your essentials are paid for if you can’t work for weeks, months, or longer. And life insurance covers your family and your burial expenses when you pass away, creating an estate plan that bypasses probate.
Malpractice insurance is a must-have cushion, as well. As a physician, your personal assets are always at risk from malpractice claims. How are you protecting your savings, real estate, and other valuables from the potential damage of a lawsuit? This article by OJM Group on asset protection dives into a detailed explanation of your options.
Conclusion
This simple guide will help you start budgeting and become debt-free so you can begin investing strategically. Your asset protection needs may change as you build your retirement vessel. When you’re ready to set specific targets for your future goals, talk to an expert in physician retirement planning for the best results.
