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Planning for Retirement? But I Just Started!

By Champ L. Baker III, MD, Matthew S. Fury, MD

    • Early Career Engagement

Trainees and early career surgeons face a multitude of immediate pressures regarding clinical and operative skill refinement, practice management and work-life balance.

After years of intense training and delayed gratification, it is often an afterthought to devote time and energy to an event 30 years in the future. However, ensuring a successful retirement requires the same fundamentals that are used in a physician’s daily clinical practice: setting appropriate expectations, comprehensive pre-planning, assessment of new information or circumstances and frequent outcomes analysis.

The first step in developing a retirement plan is to envision your future self and gain clarity of your desires during this important period in your life. An understanding of your current income and expenses relative to your future plans, with adjustments for rising inflation, will illuminate how much money you will need yearly in order to sustain your retired lifestyle. A physician planning to retire to Manhattan’s Upper East Side and pursue his/her passion of private aviation will likely have different requirements than one hoping to settle down in Augusta, Georgia with a freelance writing hobby. This expected retirement income, along with your desired retirement age, will help create the ultimate financial goal at the culmination of your medical career. There are numerous retirement calculators available online, but a financial planner—preferably a fiduciary—may also be helpful in developing these goals.

Once you have a retirement goal in mind, then a savings plan can be generated. We’ve worked hard to achieve this high-stress but rewarding career, and with appropriate planning, you can and should be able to enjoy your current financial success while still saving for the future. With the power of compounding interest, the idealistic recommendation is to save as much as you can as soon as you can. It is recommended to save 15-25% of your gross income for retirement, but your current income, family circumstances and timelines should be accounted for when planning your savings rate.

There are multiple investment options to consider including IRAs, 401(k), 529 education funds, health savings accounts (HSAs) and others. Working with a fiduciary can help develop an organized investment strategy suited to your goals and situation. However, it is important to devote time to self-education on personal finance and retirement planning. A recent Emerging Leaders Nightcap on investing was quite popular, so look out for our future educational events from AOSSM!

It is important to regularly review your retirement goals, track your savings progress, and assess the performance of your investment portfolio. Uncontrollable events, like a global pandemic, may affect your income temporarily, or maybe your previous retirement plan isn’t appealing to you anymore. By keeping the goal in sight, you can adjust your savings rate or your investment mix to ensure success.

In The White Coat Investor, James Dahle, MD, distills the formula for an adequate retirement fund into four variables—your income, your savings rate, your rate of return on your saved money and the amount of time that you allow the money to compound1. By increasing your income, titrating your savings rate to your goals and current investment performance, and working with a fiduciary to assist in optimizing your portfolio, you can ensure that your future is secure when you are no longer working. Although you cannot travel back in time to start putting away money in your 20s and early 30s, you can start on your path to a comfortable retirement today.

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