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Physicians

What Should a New Attending Physician Do With Their First Real Paycheck?

by Malik Amine

The first real paycheck hits and something shifts.

You've spent a decade in medical school and residency making $60,000 a year, sometimes less. Now you're looking at a direct deposit for $25,000 or $30,000. In one month. And the first instinct for most new attendings is the same: I've earned this. Time to live.

I get that. After everything you've been through, you have.

But the decisions you make in that first year of financial planning as a new attending physician — what you do with that income right now — will compound for the next 30 years in either direction.

That's not a lecture. It's just math.

Why Do Many Doctors Go Broke?

It sounds like an oxymoron. A physician going broke. But it happens, and the pattern is almost always the same.

The income arrives. The lifestyle catches up to it almost immediately. The house, the car, the private school, the vacations that feel overdue after years of sacrifice. None of those things are wrong on their own. The problem is when they happen before the foundation is built.

You've spent 10 to 15 years in negative or zero wealth territory. Student debt, low resident salary, delayed savings. Now you're suddenly in the top few percent of earners in the country. You have ground to make up. And if you spend the first three to five years of attending income buying the lifestyle first, that window closes.

The physicians I work with who are in trouble in their 50s almost all have the same thing in common: they celebrated year one. And year two. And never got around to the plan.

The Real Problem With Lifestyle Creep

Lifestyle creep isn't about being irresponsible. It's about being human.

Your brain has been told for years that the financial pressure will lift when you're done with training. And it does lift. So spending feels earned, justified, and honestly — it is. The danger is that spending tends to be permanent and saving tends to be optional. Once the mortgage is at $5,000 a month and the car payment is $1,200, that money is gone before you ever decide where to put it.

The fix isn't to live like a resident forever. Nobody is asking for that.

The fix is to build the foundation in year one, before the lifestyle catches up. Once the automatic transfers are set, once the retirement accounts are funded, once the insurance is locked in — then you spend what's left without guilt. Because the work is already done.

How Do Physicians Build Wealth Differently?

Realistically, they have to be more aggressive.

Most physicians don't start saving seriously until their mid-30s. That's 10 to 15 years behind someone who started at 22. You can't fix the timeline, but you can compress the work.

That means the first year as an attending isn't the time to figure it out later. It's the time to build the habits and the structures that will run in the background for the next 20 years.

According to the AAMC, the median physician income in 2024 was approximately $352,000 across all specialties, with primary care physicians averaging around $260,000 and specialists well above that. Most attendings have the income to build real wealth fast. What they lack is a system.

What to Actually Do in Year One

There's no complicated formula here. You got to be smart about it, but it doesn't have to be overwhelming.

First: lock in your disability insurance before anything else. Residency stress takes a real toll on your health. The longer you wait after training, the harder it can be to qualify for favorable rates. This one move protects everything else you build.

Second: understand what retirement accounts are available to you. If your employer offers a 403(b) or 401(k), you should be contributing the maximum in year one, not year three. The 2026 limit is $23,000 — that's $23,000 that doesn't get taxed at the 35% or 37% federal rate you're likely paying.

Third: do the backdoor Roth IRA. Most attendings earn too much for a direct Roth IRA contribution, but the backdoor strategy is legal and works. That's $7,000 per year of after-tax money growing without any future tax drag. Small number now, significant number in 25 years.

Fourth: build an emergency fund before you invest aggressively. Three to six months of real expenses, liquid. Not invested. Cash. This prevents you from making panicked financial decisions when something goes wrong, and something always goes wrong.

That's it for year one. Not complicated. Just four things, in that order.

What Taxes Affect Doctors Most?

At attending income levels, the federal marginal rate hits 37% fast.

Add state income tax — anywhere from 0% in Texas or Florida to over 13% in California — and you're looking at a combined marginal rate of 40% to 50% on every dollar you earn above a certain threshold.

Every dollar that goes into a pre-tax retirement account reduces that tax bill dollar for dollar. If you're in a 40% combined bracket and you contribute $23,000 to your 403(b), that's $9,200 in taxes you don't pay this year. Every year.

That math gets more powerful as your income grows. Physicians with self-employment income — locum tenens work, a side practice, consulting — have access to plans that can shelter $50,000, $100,000, even $200,000 or more annually. The defined benefit plan guide for physicians has the details on that if you're in that situation.

When Should Physicians Invest in Real Estate?

After the foundation is solid, not before.

Real estate is a legitimate wealth-building tool. For physicians specifically, it can serve as both an investment and a tax shelter, particularly in syndications or rental properties that generate paper losses through depreciation.

But real estate is illiquid, management-intensive, and requires capital. If you're in year one as an attending with $400,000 in student debt, no emergency fund, and no retirement savings, real estate is not the priority. Get the foundation in place first.

A good rule of thumb: when your retirement accounts are fully funded, your emergency fund is built, and you have a handle on cash flow, then real estate starts making sense to explore. That's year two or three for most attendings, not year one.

How Much Should a Resident Doctor Save?

If you're still in residency reading this, the short answer is: something.

Even $100 a month into a Roth IRA during residency matters. Not because of the dollar amount, but because you build the habit before the income arrives. Physicians who start saving in residency, even a small amount, are far more likely to build the structures quickly when the attending paycheck hits.

The more important move in residency is to lock in disability and life insurance while you're healthy and young. Your premiums will never be lower. Your health will never be more certain. Do it now. You can read more about why in the insurance during residency guide.

The Real Point

You did the hard part. The decade of training, the debt, the delayed gratification. The financial piece is actually simple by comparison.

Have a plan before the money arrives. Not a perfect plan. Just a plan. Set the retirement contributions. Lock in the insurance. Build the cash cushion. Then spend what's left.

The attendings who do those four things in year one are in a completely different position at 50 than the ones who figured they'd get to it eventually.

Eventually shows up faster than you think.

Frequently Asked Questions

What should a new attending physician do with their first paycheck? Before anything else, set up automatic contributions to your employer retirement plan and open a backdoor Roth IRA. Lock in disability insurance if you don't have it. Build an emergency fund of three to six months of expenses. The lifestyle upgrades can come after the foundation is in place.

How long does it take a physician to build real wealth? For most physicians, the serious wealth-building window is roughly ages 35 to 60. That's 25 years of high income. If you start the right habits in year one of practice, that's more than enough time to build significant wealth. Physicians who wait until year five or ten to get serious have a harder time catching up.

What is lifestyle creep and why does it hurt physicians? Lifestyle creep is when your spending increases automatically as your income increases, without a deliberate decision. For physicians, it often happens in the first few years of attending income. Because physician spending is often fixed (mortgage, car payments, private school), once the lifestyle inflates it's hard to reverse. Building the savings habits before the spending habits form is the key.

Do new attendings need a financial advisor? Not necessarily in year one, but it depends on your situation. If you have student loans over $300,000, self-employment income, or a complex compensation structure (partnership track, RVU bonuses), a financial advisor who specializes in physician finances can help you avoid expensive mistakes. At minimum, it's worth a consultation.

Is a Roth IRA or a 403(b) better for new attending physicians? They serve different purposes. The 403(b) reduces your taxable income today, which matters a lot when you're in the 35-37% bracket. The backdoor Roth grows tax-free, which matters in retirement. Most physicians should do both if they can.

The window when all of this is easiest is right now, in that first year. Before the mortgage, before the car lease, before the private school tuition.

It doesn't have to be complicated. It just has to happen.

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