As a physician, you’ve worked hard to build your career and secure a higher income, but are you focusing on the right financial priorities? While many doctors fixate on investment performance, the truth is that your savings rate is far more important, especially early in your career. At Pattern, we understand the unique challenges physicians face. We're here to help you protect your income and stay on track toward your financial goals.
Your savings rate is the percentage of your income you set aside for retirement and other long-term goals. While investment returns are important, they’re largely outside your control and often take years to make a significant impact. Physicians, in particular, face unique challenges when it comes to saving:
Delayed earnings: You start earning a full salary years later than most professionals.
Higher debt loads: With student loans averaging $200,000 or more, many doctors feel pressured to delay saving.
Compressed timeline for retirement saving: Fewer earning years mean you must save aggressively to catch up.
Here’s the good news: You can control your savings rate. In fact, increasing your savings rate has a far bigger impact in the early stages of your career than chasing investment returns. For example:
A new attending earning $250,000 with $50,000 in savings who increases their savings rate by just 2% (an additional $5,000/year) gives their portfolio an immediate boost.
By contrast, earning an additional 10% on investments would require consistently outperforming the market—a much harder goal to achieve.
It’s simple: You can’t predict market performance, but you can decide how much of your income to save.
The right savings rate depends on your career stage. While general advice suggests saving 15-20% of your gross income, physicians often need to aim higher due to their unique financial timelines. Here's a breakdown for physicians:
Residents: 5-10% (focus on building an emergency fund and paying off high-interest debt)
Early Attendings (first 7 years): 20-25%
Mid-Career Physicians: 25-30%
Late-Career Physicians: 30%+ to allow for an earlier exit option or more flexibility in retirement.
Missed your target savings rate early on? Don’t worry. You can still catch up by steadily increasing your contributions over time.
Boosting your savings rate doesn’t have to mean cutting out everything you enjoy. With a few smart adjustments, you can save more while maintaining your quality of life.
Pay Yourself First
Treat your savings like a non-negotiable expense. Set up an automatic transfer to your savings or retirement account as soon as your paycheck hits your bank. By prioritizing savings before spending, you’ll build wealth without relying on willpower.
Redirect Extra Income
Whenever you receive additional income, whether it’s a bonus, tax refund, or side gig earnings, allocate a portion of it directly to savings. For example, you could save 60% of any windfall and use the rest for discretionary spending. This way, you’re growing your savings without feeling deprived.
Be Strategic with Big Purchases
Large expenses like housing and vehicles can have a long-term impact on your finances. Aim to keep housing costs manageable (e.g., under 25% of your gross income) and avoid frequent upgrades to cars or other high-cost items. By keeping these fixed expenses low, you’ll free up more money to save and invest.
Your ability to save depends entirely on your ability to earn. What happens if illness or injury prevents you from practicing medicine? That’s why disability insurance is crucial for physicians. It protects your income, and your savings plan, if something unexpected happens. At Pattern, we specialize in helping physicians secure true own-occupation disability insurance, ensuring you’re covered if you can’t practice in your specialty. This is a key safeguard for your financial future.
Every month you delay saving at the right rate could cost you thousands in future retirement funds. Here’s how to get started:
Calculate your current savings rate (total annual savings ÷ gross income).
Set your target rate based on your career stage.
Automate one savings strategy to make saving effortless.
Review your income protection with disability insurance.
At Pattern, we understand the unique financial challenges physicians face. While you focus on building your career, we’ll help you protect your income with the right disability insurance. 👉 Get Your Free Disability Insurance Quote – In just 5 minutes, you can start the process to secure the coverage you need to safeguard your financial future. Your financial future depends on the decisions you make today. Let Pattern help you protect what matters most!
Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as financial advice or a substitute for professional guidance. Please consult a licensed financial advisor or other qualified professional for personalized advice tailored to your specific financial situation.
American Medical Association’s Financial Planning Resources for Physicians
American Medical Association’s Guide to Disability Insurance