5 Money Mistakes Early-Career Attending Physicians Make
by Malik Amine
Key Takeaways
- Lifestyle inflation after residency is the #1 wealth killer for physicians (live like a resident for 2-3 more years to build a financial foundation)
- Not maxing out tax-advantaged accounts (401k, backdoor Roth IRA, HSA) costs you hundreds of thousands in missed growth
- Delaying disability and life insurance until you're "older" can lock you out of coverage if your health changes
- Ignoring student loan strategy (PSLF vs aggressive payoff) can cost you $50K-100K+
- Buying too much house too soon is a trap (the bank will approve you for way more than you should borrow)
You just finished residency. Your attending salary hits your bank account for the first time. $250,000 per year. After making $60K as a resident, this feels like winning the lottery.
I've worked with dozens of early-career attending physicians, and I see the same five mistakes over and over. These mistakes don't feel like mistakes in the moment (they feel like "finally living"), but they cost you millions over a 30-year career.
Let me save you from yourself.
Mistake #1: Lifestyle Inflation (The Biggest Wealth Killer)
What it looks like:
You've been driving a 2010 Honda Civic for 7 years. You just got your first attending paycheck. You deserve a new car, right? So you buy a $70,000 BMW. Then you move into a bigger apartment ($4,000/month instead of $1,500). Then you start eating out 5 nights a week because you're "too busy to cook."
Within 6 months, you're spending $15,000/month. You're saving almost nothing. You still have $200K in student loans.
Why it's a trap:
Your residency lifestyle kept your expenses low ($3,000-4,000/month). When your income jumps from $60K to $250K, the smart move is to keep living like a resident for 2-3 more years. Save the difference ($15K+/month). Pay off loans, max out retirement accounts, build an emergency fund.
The math:
Resident lifestyle: $4,000/month expenses. Attending salary (after tax): ~$14,000/month take-home. If you keep expenses at $4,000, you have $10,000/month to deploy.
- $6,000/month toward student loans = loans gone in 3 years
- $2,000/month to 401(k) = $24K/year (almost maxed out)
- $1,000/month to emergency fund = $36K saved in 3 years
- $1,000/month to invest = $36K in a brokerage account
After 3 years, you have:
- Zero student loans
- $72K in your 401(k) (plus growth)
- $36K emergency fund
- $36K in investments
Total net worth: $150K+ (from zero). THEN you can upgrade your lifestyle.
What I tell early attendings:
Live like a resident for 2-3 more years. Your future self will thank you.
Mistake #2: Not Maxing Out Tax-Advantaged Accounts
What it looks like:
You contribute 5% to your 401(k) because that's what gets the employer match. You've never heard of a backdoor Roth IRA or an HSA. You're leaving $50K+/year in tax-advantaged space empty.
Why it's a trap:
Physicians are high earners (top tax bracket). Every dollar you save in a tax-advantaged account saves you 35-40% in taxes (federal + state). If you max out a 401(k), that's $23,000/year (2026 limit) that reduces your taxable income.
At a 35% marginal rate, that saves you $8,050 in taxes every year. Over 30 years, that's $241,500 in tax savings (not counting investment growth).
What you should be doing:
Max out these accounts EVERY YEAR (in this order):
- 401(k) or 403(b): $23,000/year (2026 limit). Pre-tax contributions reduce your taxable income.
- Backdoor Roth IRA: $7,000/year (2026 limit). You can't contribute directly to a Roth IRA if you make over $165K (single) or $246K (married), but you can do a backdoor conversion (contribute to traditional IRA, immediately convert to Roth). Tax-free growth forever.
- Health Savings Account (HSA): $4,300/year (individual) or $8,550/year (family) if you have a high-deductible health plan. Triple tax advantage (deduct contributions, tax-free growth, tax-free withdrawals for medical expenses). This is the best retirement account most people don't use.
- Mega backdoor Roth (if your plan allows): Some 401(k) plans let you contribute after-tax money (up to $69,000/year total including employer contributions) and convert it to a Roth. Not all plans offer this, but if yours does, USE IT.
Real example:
Attending physician, age 32, salary $250K. Maxes out 401(k), backdoor Roth, and HSA every year for 30 years (until age 62). Assumes 7% annual growth.
- 401(k) balance at 62: $2.3 million
- Roth IRA balance at 62: $700K (tax-free)
- HSA balance at 62: $850K (tax-free for medical expenses)
Total: $3.85 million just from maxing out accounts.
If she only contributed 5% to her 401(k) and skipped the rest? She'd have $800K. That's a $3 million difference from not using tax-advantaged space.
What I tell early attendings:
Automate this. Set up payroll deductions for your 401(k). Set up automatic transfers for your Roth and HSA. Make it so you never see the money.
Mistake #3: Delaying Disability and Life Insurance
What it looks like:
You're 30, healthy, just finished residency. You figure you'll get disability insurance "in a few years when you're older." Or you get a cheap policy with bad terms because you didn't shop around.
Why it's a trap:
Disability insurance is the most important insurance for physicians. Your ability to earn income is your biggest asset (a $250K salary over 30 years is worth $7.5 million). If you become disabled and can't work, you lose that.
The problem: Disability insurance is based on your health AT THE TIME YOU APPLY. If you wait 5 years and develop a health issue (diabetes, back problems, mental health diagnosis), you might not qualify for coverage. Or you'll get coverage with exclusions (they won't cover disabilities related to your pre-existing condition).
Key terms to look for:
- Own-occupation coverage: Pays out if you can't work in YOUR specialty (not just "any job"). If you're a surgeon and you can't operate anymore, you get paid, even if you could still work as a consultant.
- Non-cancelable: The insurance company can't cancel your policy or raise your rates as long as you pay premiums.
- Guaranteed renewable: The policy renews automatically each year.
Cost: A good disability policy for a $250K-earning physician costs around $3,000-6,000/year. That's 1.2-2.4% of your salary. Worth it.
Life insurance: If you have dependents (spouse, kids), you need term life insurance. How much? A common rule is 10x your annual income. So if you make $250K, get a $2.5 million policy.
Cost: A healthy 30-year-old can get a $2.5M, 30-year term life policy for around $1,500/year.
What I tell early attendings:
Lock in disability and life insurance DURING RESIDENCY (or as soon as you start attending). Your health is best now, and rates are lowest. Don't wait.
Mistake #4: Ignoring Student Loan Strategy
What it looks like:
You have $200K in student loans. You put them on autopay for the minimum payment and forget about them. Or you aggressively pay them down without considering PSLF. Or you pursue PSLF without understanding the rules.
Why it's a trap:
There are two main strategies for physician student loans:
- PSLF (Public Service Loan Forgiveness): Work at a nonprofit for 10 years, make income-driven payments, get the remaining balance forgiven tax-free.
- Aggressive payoff: Pay off loans as fast as possible (2-5 years), then have total freedom.
Which is better? It depends.
PSLF makes sense if:
- You plan to work at a nonprofit hospital long-term
- Your debt-to-income ratio is high ($300K loans, $200K salary)
- You want lower monthly payments early in your career
Aggressive payoff makes sense if:
- You want to work in private practice or at a for-profit hospital
- Your debt-to-income ratio is moderate ($150K loans, $250K salary)
- You hate debt and want it gone
The mistake: Not choosing a strategy. If you pursue PSLF, you should be making the MINIMUM payment (no point paying extra if it's getting forgiven). If you're paying off aggressively, you should throw every extra dollar at the loans.
Most early attendings do neither. They make random extra payments without a plan. That's the worst of both worlds.
What I tell early attendings:
Run the numbers for both strategies. If you pursue PSLF, certify your employment every year and make sure you're on an income-driven plan. If you're paying off aggressively, refinance to a lower rate (but only if you're NOT doing PSLF, because refinancing kills PSLF eligibility).
Mistake #5: Buying Too Much House Too Soon
What it looks like:
You get pre-approved for a $1.2 million mortgage (because banks will lend physicians insane amounts). You buy a $1 million house with 5% down. Your monthly payment is $7,000 (mortgage + property tax + insurance + HOA).
You're now house-poor. You can't save for retirement, you can't pay down loans, and you're stressed about money despite making $250K.
Why it's a trap:
Banks approve you based on debt-to-income ratio (usually up to 43% of gross income). For a $250K salary, that's $107K/year in debt payments, or $8,900/month.
But just because you CAN borrow that much doesn't mean you SHOULD.
Better rule: Keep your mortgage payment under 25% of your TAKE-HOME pay (not gross). If you take home $14K/month, your mortgage should be under $3,500/month. That keeps housing affordable and leaves room to save.
Real example:
Physician making $250K. Buys a $1M house with 5% down.
- Mortgage: $950,000 at 7% = $6,300/month
- Property tax: $1,000/month
- Insurance: $300/month
- HOA: $400/month
Total: $8,000/month. On a $14K take-home, that's 57% of income. No room to save, pay off loans, or invest.
Alternative: Rent for 2-3 years, save a 20% down payment, pay off student loans, THEN buy a house. Or buy a smaller house ($500K instead of $1M).
What I tell early attendings:
Renting is not "throwing money away." It's buying flexibility. Don't rush into a house just because you "should." Wait until you have 20% down, an emergency fund, and your student loans under control.
Summary
Your attending salary is life-changing, but only if you don't sabotage yourself in the first 5 years. The five biggest mistakes I see:
- Lifestyle inflation (live like a resident for 2-3 more years)
- Not maxing out tax-advantaged accounts ($3M+ difference over a career)
- Delaying disability and life insurance (lock it in while you're healthy)
- No student loan strategy (PSLF or aggressive payoff, pick one)
- Buying too much house too soon (keep mortgage under 25% of take-home pay)
If you avoid these mistakes, you'll build wealth faster than 90% of physicians. If you make all five, you'll be making $300K at age 50 with $50K in retirement savings, wondering where it all went.
Your call.
Sources:
- Case studies from early-career attending physicians (names changed)
- IRS Publication 590-A (Roth IRA contribution limits)
- 2026 401(k) contribution limits