How Much Should a Resident Doctor Save? A No-BS Answer

The question I get from residents more than any other is this: "How much should I actually be saving right now?"

And I get it. You're making $65,000 a year. You have $200,000 or more in student loans breathing down your neck. You look at your peers who graduated with you and went into tech or consulting, and they're making twice what you are while you're working 80 hours a week.

So here's the honest answer: save what you can. But let me break it down so you know what matters most.

The Bare Minimum You're Leaving on the Table

Here's what I see happening with most residents I talk to. They're not contributing to their 401(k) or 403(b) at all. They're just waiting until attending money kicks in.

That's a mistake. Here's why.

If you're not getting the employer match, you're turning down free money. Let's say your program matches 3% of your salary. On a $65,000 salary, that's $1,950 you get just for participating. You'd have to earn over $3,000 in pre-tax income to keep that same $1,950 after taxes. That's a guaranteed return you're walking away from.

So minimum: contribute enough to get the full employer match. It sounds small, but it compounds.

The Real Number You Should Aim For

Once you have the match locked in, aim for 15% of your gross income going into retirement accounts. For a resident making $65,000, that's about $8,000 to $10,000 a year.

I know what you're thinking. "Where am I supposed to find that kind of money?"

Here's what I tell residents. Look at your student loan interest. If you're on an income-driven repayment plan, your payments are probably barely covering interest, let more principal. You might be in a situation where aggressively paying down loans doesn't make sense mathematically, especially with PSLF or SAVE program options.

So the play becomes: get the employer match first, then look at whether you're better off dumping extra money into loans or into retirement. Usually, if you have any PSLF or forgiveness track, the math favors contributing to retirement.

What About an Emergency Fund?

Before you worry about investing, build three to six months of expenses in a high-yield savings account. This isn't glamorous, but it's your runway. Residency is stressful enough without worrying about what happens if your car breaks down or you have a medical emergency.

If you're single with minimal expenses, three months is fine. If you have a family or a spouse who isn't working, lean toward six months.

The HSA Move Nobody Talks About

If your residency offers a high-deductible health plan, max out the HSA. It's the only triple tax-advantaged account out there. Money goes in tax-free, grows tax-free, and comes out tax-free for medical expenses. After age 65, you can withdraw for any purpose and just pay income tax, similar to a traditional 401(k).

It's also portable. That HSA follows you from residency to fellowship to attending. So use it now, build up those receipts, and let it grow.

The Bottom Line

Don't overcomplicate this. Get the employer match, contribute 15% if you can swing it, build your emergency fund, and don't ignore the HSA if it's available.

The big money comes later. For now, you're building habits and catching the free money. That's how you set up the life you want after training.

It sounds like a lot, but realistically, you don't have to be perfect. You just have to start.

Related Posts:

Why Do Doctors Go Broke — The biggest financial mistakes physicians make after residency
Physician Taxes Guide — What every doctor needs to know about tax planning

Sources:

AAMC (Association of American Medical Colleges) — Physician compensation data
IRS — HSA contribution limits and tax benefits