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What do residents do for retirement savings?

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  • Avatar octopus85 
    Participant
    Status: Resident
    Posts: 170
    Joined: 08/13/2017
    Splash Refinancing Bonus

    While I don’t get a match as a resident, I do have access to a 401(a) and a governmental 457, so I live off my spouse’s non-medical income and sock $38k/yr away.

    #198088 Reply
    Avatar Docbeans 
    Participant
    Status: Physician
    Posts: 172
    Joined: 01/11/2016

    i don’t think there are many programs that have 401k or any such pretax savings for residents. So what do you guys do, if anything, to start a retirement account?

    Click to expand…

    Not true. I wrote about it here on this site.

    Your daughter is already in a golden situation, thanks to your wife and you- not just for the gift money, but the awareness and focus on personal finances you’re attuning her to. If she inculcates those good money habits, she will be wealthy enough to enjoy all the freedoms it can afford her. Good luck!

    #198106 Reply
    Liked by Wiscoblue
    Avatar Brains428 
    Participant
    Status: Physician
    Posts: 215
    Joined: 11/09/2017

    Some of the match has to do with actual length of residency. Given that I was at the same institution for 5 years, I was able to get a match. Still only came out with 40K or so after 5 years…

    I was dumb and had 401k withdrawn from my PGY1 paycheck during private hospital internship.

    Somehow I don’t think that obtaining an inheritance will make a physician child go broke. Maybe they’ll have some bad habits and not retire early, but they’re unlikely to squander it away as they managed to make it to med school. They’re fortunate to have some extra money and a cushion should financial times get bad.

    I also think that if you, the parent, have been saving and talk about it around the house that some of it may have been picked up by your children, even if its as little as “I should care about my retirement and what to do with money.”

     

    #198114 Reply
    Craigy Craigy 
    Participant
    Status: Spouse
    Posts: 1863
    Joined: 09/16/2016

    Pay down student debt.

    Roth.

    LEVEL 1 WCI FORUM MEMBER.

    #198166 Reply
    Avatar Wiscoblue 
    Participant
    Status: Physician
    Posts: 149
    Joined: 05/17/2017

    Well, this is quite a revelation. Thanks for all the replies. I was not aware that many residency programs have retirement plans. When I was a trainee at Michigan, many many years ago, there was no 401k for residents. I don’t know if they have one currently. My daughter is doing her residency in the PNW, and they don’t have any retirement plans for house officers or fellows either.

    She’s a good kid and works hard. Loves her family. Respects her grandparents and elders. She’s honest and truthful. Growing up in America, she had a different childhood than I did. She never went to bed hungry or had to wear hand me downs. My wife and I want to give her everything that we never had. For those who think that we might be spoiling her, I think she’s got a good sense of the value of money. I just need to guide her for a few years regarding retirement and savings.

    #198320 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3019
    Joined: 01/14/2017

    Yeah I’d turn off the helicopter cash.

    #198323 Reply
    Liked by wa2106, Zaphod, jz
    kimschultz kimschultz 
    Participant
    Status: Financial Advisor, Accountant
    Posts: 1
    Joined: 03/14/2019

    Kudos to you for retirement savings in residency! Many clients wait until they’re out of residency or farther down a debt payoff scenario. But, the savings compounded is significant. For example, assuming you’re a 26 year old resident and saves $19,000/year in a tax deferred account (assuming no match), earning a reasonably historic 8%. You would have $4.9 million after 39 years. By delaying your savings only 4 years, you lose $1.4 million in invested assets at age 65!

    The question on after vs. pre-tax savings at your age is – will you be investing the tax-savings generated by saving pre-tax?? If not, it’s very likely after tax savings is your best option, if offered. Don’t discount the HSA either. This is a hidden gem with triple tax benefits! 1) Pre-tax contributions, 2) Tax-free interest and investment earnings and 3) Tax-free payments for qualified medical expenses.

    Good luck!

    Kim Schultz, CPA, CRPC | Wealth Advisor | Hilliard Lyons
    http://www.KSchultz.hilliard.com | 812.428.5106

    #198491 Reply
    Hank Hank 
    Moderator
    Status: Attorney
    Posts: 1190
    Joined: 03/27/2017

    The original poster was, of course, asking on behalf of the poster’s daughter (a resident).

    As a gentle reminder to forum readers, be sure to research an advisor’s background on FINRA’s BrokerCheck.  Look up fees and disclosures on the firm’s ADV-2 on the SEC’s Investment Adviser Public Disclosure website.  You’ll want to look out for things like 12b-1 fees, wrap fees, technical analysis, high asset under management fees, etc.  Johanna published a good article on WCI on what to look out for in an ADV-2.

    Form ADV – Ignore it at Your Peril

    #198532 Reply

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