As a young physician, it’s natural to be excited that you’re finally getting to do the work you trained so hard for and finally earning the salary that goes along with it. But the hard work is just beginning.
Now that you have the career you’ve always wanted it’s time to put some plans in place to protect the future of your medical career and your physician salary.
From your finances to your personal health, here are five things that young physicians should do to plan for the future.
Pay Off Student Loans as Soon as Possible
According to a recent report by the AAMC, 73% of all medical school graduates have a median average medical school student loan debt of $200,000. If you’re one of those physicians, try to pay off that debt as soon as possible.
It’s tempting to want to buy your first home or splurge on a new car now that you’re a physician. Yet it’s better to live a more modest lifestyle and pay off your student loan debt before taking on more debt in the form of a mortgage or a hefty car loan.
If you can live on the salary you earned as a resident for a year or two, you can eliminate a significant chunk of your loan debt within your first few years of employment. In the process, you can save tens of thousands of dollars in interest alone.
You’re Never Too Young to Start Planning for Retirement
The more money you start saving today the more money you’ll have when you retire. If your employer offers a 401k or a similar retirement savings plan, start participating in that plan now.
Making the maximum contributions allowed helps you build your safety net for retirement and reduce your tax obligations at the end of the year.
If your employer does not offer a retirement savings plan or if you are self-employed, set up a SEP IRA (a simplified employee pension plan) for yourself and put as much money into it per year as the IRS allows.
Hire a Financial Advisor
For young physicians, free time is often a luxury. Rather than spending your limited downtime figuring out how to save, where to invest, and how to spend your money, hire a financial advisor to do it for you.
Financial advisors can help you:
- Create a strategy to pay down existing debt
- Minimize financial risk
- Make diversified investments
- Create tax-advantaged savings plans
- Build long-term wealth
Physicians have certain expenses, such as malpractice insurance, that other professionals don’t have. They also have higher than average incomes, which often means a higher than average mortgage.
Financial advisors can help you navigate these complicated financial waters so that you can stay on track and meet your long-term goals.
Prioritize Your Own Health
As a physician you instruct your patients to live a healthy lifestyle, undergo routine tests and examinations, and be proactive about their own health.
Now it’s time to practice what you preach.
Working in the medical field can be exhausting and draining, both physically and mentally. Young physicians must prioritize their own physical and mental health needs in order to remain active and healthy throughout their careers.
From eating healthy and exercising to taking vacations and making time for self-care, your own health should be a top priority.
Protect Yourself With Disability Insurance
No matter how young or healthy you may be, an illness or injury can strike anyone at any time. With disability insurance protection, you can continue to earn a portion of your paycheck, even if an illness or injury renders you unable to work.
Disability insurance is income insurance, a way to protect the future income you haven’t earned yet. For young physicians who stand to earn millions of dollars over the course of their career, it’s essential.
Disability insurance policies vary greatly in regards to their eligibility terms, the benefits they offer, and how much they cost. Much of this depends on the “definition of disability.”
Every policy has a definition of disability, and physicians should select a policy with the “true own-occupation” definition. Under this definition, you’ll be eligible to collect benefits if you suffer any injury that prevents you from doing your current job.
Check out this article from Physicians Thrive to learn more about disability insurance and the top disability insurance companies.
In Conclusion
Now that your education and training are in your rearview mirror, it’s time to start planning for a long and successful career as a physician.
To do so, be proactive about your own health. Get disability insurance to protect your income. Pay down your debt, start a retirement savings account, and rely on a financial advisor for sound investment advice.
By doing these five things in the early stages of your career, practicing medicine can be more rewarding than you ever thought possible.
