Career and Life Planning Guidebook for Medical Residents

Recommended Tool Medical School Loan Calculator-Pay Off Debt or Invest Use this tool to help gauge the feasibility of your student loan repayment with your anticipated future income. http://md.careers/C-05 R E A D : Order Your Priorities I am often asked by physicians about what they should “do first.” These physicians are usually choosing between many good options, such as paying down debt, contributing to retirement accounts, or saving for a down payment on a home. If you will live like a resident for your first few years in practice, you will find that you do not have to choose; you can actually do all of them at once through careful planning and budgeting. Consider a graduating resident with a salary of $250,000 and $200,000 in student loans. The physician may pay $50,000 in taxes, leaving a net income of $200,000. If you can live on $75,000 per year (a 50% raise from your residency pay), you will still feel quite wealthy. You will then have $125,000 per year with which to build wealth. You may be able to contribute $17,500 to a 401(k), $5,500 to a Roth IRA, $5,500 to a spousal IRA, and another $6,550 to a Health Savings Account, for a total of $35,050 toward retirement. You can also put $50,000 toward your student loans and nearly $40,000 more toward the down payment on a house. By living like a resident, you can truly do it all. That said, I feel obligated to provide some guidelines to new attendings for allocating their income. An admirable goal for a new physician is that within five years of residency graduation, the student loans will be paid off, the retirement nest egg will have caught up to those of your nonmedical peers, you will be living in your dream house, and you will be debt free except for a low interest rate, 15-year fixed mortgage. SECTION III: T MINUS ONE YEAR CAREER AND LIFE PLANNING GUIDEBOOK FOR MEDICAL RESIDENTS 356