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Medical students saving for retirement/investing

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  •  cmh1994 
    Participant
    Status: Student
    Posts: 2
    Joined: 01/10/2019

    I’m a 25 y/o MS2. My wife and I have paid for 2 years of medical school and still have the ability to pay for a 3rd year while still maintaining at least 11 months of savings in our emergency fund. We have no debt or loans, cars are completely paid off. Also, due to circumstance, we do not pay rent (we just pay utilities, insurance, and taxes). My wife is a teacher in TX so makes around 50k. Her retirement through the ISD is automatically taken out, but in 2 years when we move for residency, it will need to be rolled over into a rollover IRA of some sort. I recently began putting away money in a high rate savings acct (2.3%) to bring our “retirement savings” to 20% of our income per month. We also regularly put 12% back into savings each month.

    I’m wondering if I should keep saving for retirement in this savings acct (so the money is not tied down and is accessible), if I should open a Roth IRA (knowing that I’ll probably have some sort of 401k in a couple years during residency), or if I should think about investing this money elsewhere? If so, where? (This would be something completely new and would probably need a professional’s help).

    Thanks for your help.

    #180159 Reply
    Liked by SLC OB
     JWeb 
    Participant
    Status: Physician
    Posts: 96
    Joined: 02/21/2017

    Yes, you should do a Roth IRA for each of you. Yes, I was incorrect previously about him needing to earn his own money.  Edited to show that.

    You are waaaaaaaaaaaaaaaay ahead of the game financially.

    Do well in med school/residency and become a great physician. And enjoy life and live a little.

    #180162 Reply
     G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1177
    Joined: 01/08/2016

    Can he spousal IRA and then backdoor?

    You guys are like a 10 on the Richter scale…orders of orders above your colleagues (and likely your residents and some attendings).

    #180165 Reply
    Liked by SLC OB
     Peds 
    Participant
    Status: Physician
    Posts: 2409
    Joined: 01/08/2016
    Splash Refinancing Bonus

    JWeb is incorrect. Spouses can fund IRAs .
    I would focus on getting out of med school with minimal loans

    #180169 Reply
     Kamban 
    Participant
    Status: Physician
    Posts: 1808
    Joined: 08/01/2016

    still have the ability to pay for a 3rd year

    Click to expand…

    My take is that you do the full match and make the maximum retirement contribution in tax deferred plans (for your wife) and do Roth for your wife. Then save as much as you can in high yield accounts and see if you can abolish the med school tuition and expenses before or soon after graduation. By having no medical school loans you can really accelerate your retirement savings in residency.  You are going to be saddled with expenses like house and childcare in the future, so might as well learn early on to carry minimal or no debt.

    #180173 Reply
    Dreamgiver Dreamgiver 
    Participant
    Status: Physician
    Posts: 526
    Joined: 03/09/2017

    Your priorities in my opinion:
    #1 focus on becoming the best doctor you can, no compromises here
    #2 don’t be so frugal that your spouse will dump you (yes, it happens to the best of us out of the blue)
    #3 pay for med school as much as you can
    #4 since you already have an EF, everything that you guys manage to save for retirement should be in Roth accounts
    #5 term life insurance if you have kids

    #180176 Reply
    Liked by JWeb
     cmh1994 
    Participant
    Status: Student
    Posts: 2
    Joined: 01/10/2019

    Great, thanks for the advice! Do you have any suggestions for Roth IRA accounts?

    #180332 Reply
     Peds 
    Participant
    Status: Physician
    Posts: 2409
    Joined: 01/08/2016

    Do you have any suggestions for Roth IRA accounts?

    Click to expand…

    Vanguard.

    TDF.

    #180378 Reply

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