Career and Life Planning Guidebook for Medical Residents

In This Chapter O U T L I N E G O A L S R E A D : Financial Priority List for Attending Physicians Once you have developed a housing plan and a plan for your student loans, meld it into the following financial priority list for attending physicians. 1. Get the match. Employer-provided retirement plan matching funds are really part of your salary. Don’t leave the match on the table by not contributing. 2. Pay off any high-interest debt (>8%), such as credit cards, car loans, expensive private student loans, etc. This is a fantastic guaranteed investment return. 3. Maximize your tax-deferred retirement plan contributions, including 401(k)s, profit-sharing plans, 403(b)s, 457s, and defined benefit/cash balance plans. 4. Fund a Health Savings Account (HSA) if eligible (more on these “Stealth IRAs” in chapter 8). The following four items can be reordered, according to your financial priorities. 5. Fund a personal and spousal Backdoor Roth IRA 6. Fund a college savings plan (529) for each child up to the amount that your state subsidizes with tax breaks. 7. Pay off moderate-interest debt (4%–8%) such as student loans (unless you anticipate forgiveness). 8. Save for a house down payment (if not using a physician loan). The next four items can be reordered, according to your financial priorities and comfort level with debt. 9. If you used a physician mortgage, pay it down to enable refinancing into a lower rate conventional mortgage. 10. Add additional funding if desired to college savings (529) accounts. 11. Invest in a taxable account in risky investments (stock index funds, real estate, etc.). 12. Pay off low-interest (1%–3%) student loan debt (unless you anticipate forgiveness). The final three items can also be reordered according to your priorities. 13. Make extra payments on your mortgage. 14. Invest in a taxable account in low-risk investments (municipal bond funds, etc.). 15. Spend your money on what makes you happy. Financial Life Planning 359 WWW.PHYSICIANCAREERPLANNING.COM