Retirement Planning

Most people tend to think that the medical profession is highly lucrative and doctors don’t have to worry about things that drive other people crazy like budgeting, loan repayments, and planning for retirement. However, despite earning very well, many doctors find themselves financially stressed and unable to save adequately for a carefree future.

Common Issues Faced by Doctors Regarding Saving For Retirement

Student loans

Medical education can be quite expensive and it normally takes a long time to get qualifications that permit decent earnings. Doctors, typically, carry some of the heaviest student loan burdens that can easily take many years to be paid off even when they are earning well.

Heavy cost of establishing a practice

Doctors with their own practice tend to earn far better than those who are employed, however, setting up the practice and making it successful can be expensive. Doctors need a lot of money to pay the rent, afford staff salaries, advertisement expenses, membership to professional bodies, subscription to publications, attending seminars, etc. In this scenario, retirement planning for physicians can take a back seat.

Extravagant lifestyles

After spending many years in relative hardship, when doctors start earning handsomely in employment or in practice, they tend to go overboard and start living beyond their means with fancy homes, luxury cars, modern gadgets, exotic holidays, etc., leaving little, if anything, for retirement savings.

Inadequate financial planning

Like most individuals, most doctors also lack sufficient knowledge about financial and retirement planning. Consequently, they tend to save less than required or make investments that are unsuitable based on inexpert advice from a variety of sources.

How Can Doctors Boost Their Savings for Retirement?

Review the expenses of your practice

If you have been too engrossed in attending to patients, it is time that you took a hard look at the finances and see whether you are actually making the sort of money that is commensurate with the effort. Find out where you are leaking cash and plug them and see how you can economize.

Investigate opportunities for partnership

If you find that your practice is sub-optimal and you could benefit by associating with other doctors then try to strike up partnerships that could see a merger of two or more practices, allowing all partners to benefit by the sharing of costs.

Plan your finances

As a busy doctor, you are unlikely to have enough time to personally do investment planning. It is better to engage a professional advisor who will examine your finances, suggest methods of cutting costs, advise you on the best avenues of investment as well as the optimum ways of saving tax. Eliminate high-risk investments from your portfolio and focus on retirement accounts with an eye on the long term.


You should appreciate that without proper money management, you will be unable to save enough money for a secure retirement. If saving does not come easy, instruct your bank to sweep aside a certain amount of money every month into a special savings account that you can use to fund your retirement accounts.

Elena Mitchell is an investment advisor and private equity manager for high net worth individuals. A popular blogger on personal finance and wealth management, she interacts with users via a Q&A column.