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    How physicians can prepare for retirement at different career stages

    As he began to think about retirement several years ago, John Przybylinski, MD, an internist in Marshfield, Wisconsin, knew that letting his mind and body idle would cost him plenty after he stopped working. Avoiding boredom—and high medical costs—by staying mentally and physically fit was a must.

    So before retiring in February, Przybylinski, 67, and his wife, Lennet Radke, mapped out a strategy. They met with a financial adviser, projected future living costs, and stepped up their hiking and biking trips.


    Related: 5 ways physicians can avoid retirement failure


    Earlier on the preparation-for-retirement spectrum, 41-year-old Lynn Stewart, MD, is focused on building a nest egg. She’s putting away about 30% of her gross pay in retirement accounts and owns a rental condo in addition to her home.  

    As a county government-employed primary care physician in Austin, Texas, Stewart contributes to a pension plan that is expected to more than replace her current income if she retires at 57, though the exact amount she’ll receive  will depend on the financial health of the county. She also contributes to a deferred compensation savings plan. 

    She avoided the common, substantial school debt many physicians incur because her parents covered that bill, and she’s part of a dual-income, no children household, but she has also steered clear of many of the costly trappings of being an attending physician, she says. 

    “I probably earn a little less than the average [primary care] doctor, but that’s a tradeoff for excellent benefits and a [strong] retirement plan,” she says

    Wherever they are on the path to retirement, many physicians face daunting challenges because of their later career starts and significant investments in training, not to mention the spending explosion that tends to occur after graduation.

    “The number one thing at any stage is not to go hog wild on spending, which I did myself when I was a physician,” says Carolyn McClanahan, MD, CFP, a former physician who now is director of financial planning for Life Planning Partners in Jacksonville, Florida.

    There are some steps physicians can take to improve their chances of success at each career stage, experts say.


    Starting out: Save and tackle debt 

    Most physicians launch their careers with substantial debt or very little savings, or both. Because many are also debt-averse, they tend to focus too heavily on debt repayment to the exclusion of retirement savings, experts say.

    So crafting a debt management plan from the start that blends loan repayment with building retirement savings is a must, according to financial advisers.


    Further reading: 10 steps to increase financial security for physicians


    “One of the greatest points of obsession when we have a new resident or someone coming out of training is that the debt is all they can think about,” says Cathy Pareto, CFP, MBA, a financial planner in Coral Gables, Florida, whose clients include physicians and dentists. “I remind them this is an investment in themselves, their biggest asset, and it’s not a short-game strategy.”

    Once one loan is paid off, rather than automatically starting on the next loan, young physicians should consider whether it makes more sense to start a tax-advantaged retirement account instead—particularly if it means receiving employer matching funds, she says. 

    In a 2016 study, HelloWallet, a provider of personal finance management software and a unit of data firm Morningstar, found that while student debt reduces retirement savings—with each $1 of debt corresponding to 35 cents less at retirement—paying off debt early actually makes the problem worse.

    The data firm modeled various payoff scenarios, accounting for different market returns and other factors. In most cases, savers were better off building their savings accounts instead of using extra cash to pay down loans early. 

    Next: How much of my income should I save?


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