A lot of dentists have a retirement plan involving selling their practice when they are ready to step away from the chair. Some that I’ve talked to even plan on selling, then offering to work part time for the new owner.
I imagine a med school thread is full of optimism, but the best place to visit to get a handle on reality is the threads among experienced physicians. But if a physician can set aside $100,000 per year for 20 years, then that certainly can add up to a couple million dollars, and that’s just if it goes under a mattress. In an interest bearing account, or an investment tool with compounding interest, all the better. And if they invest in things like rentable real estate, then one can have even more assets waiting for them upon retirement. The key is resisting the Porsche for the wife (or the $40,000 minivan), the brand new full size pickup, the large house that you bought to make up for all the sacrifice of undergrad, med school, and residency, or the myriad of other purchases you make where you pay full price because it’s more convenient. Then there is school to pay back with interest. It sounds easy to put away $100,000 when you are making $300,000, but taxes..... after federal taxes you are sitting on $180,000 if you are lucky, and then state and municipal taxes take their bite. There are ways to protect your income using different methods, but it’s not exactly easy, and most avenues really tie you down.
Physicians face the same problems the rest of us do when they come upon a decent wage, and maybe even a bit more. 12 years of sacrifice to get where they are just entering the workforce with a significant wage helps folks appreciate the value of living in the now. They’ve been living college student poor, and more than that, they’ve sacrificed/invested more free time into their dream than most folks do, and that’s time you don’t get back. Do you sacrifice even more and wait 20-30 years before you have a bit of luxury (keep in mind they gave up their 20’s and into their 30’s already), or do you sample the good life right now while you still have a slice of your youth?
You’ve come to the PA, NP, RN page to ask your questions, and it’s a good place to ask, but most of us aren’t burdoned with med school or dental school amounts of debt, although most PAs I know have come out of school with over $100,000 of debt. As an RN who is working full time through NP school, the only debt I carry besides the home mortgage that I pay extra payments on a 30 year loan to make it a 12 year loan, is my NP school debt of just over $40,000. The only reason I’m not paying that down is because if I do, I won’t be able to be reimbursed by the government if I win an HRSA scholarship after I get out of school (and that’s almost a given because I’ll be a psyche NP in a region where there is a giant need for psyche providers). My spouse is in the medical field as well, and makes as much as my nursing wage, and we have always banked and invested all of that income without exception, and lived off of one of our earnings. We’ve both been maxing out our matching 401k amounts from our facility, and using other investment tools for a little bit beyond that, but not really a ton more from my end given that we are living off of one income while the rest is put away from my spouse’s. With that one income paying for the house and the bills, it honestly would be stretching to put away much on one income alone. Once I’m an NP, I hope to make at least $140k within the first few years, which would be a boost over my current income of 1.64 times my current wage. That would be nice if we planned on having my spouse keep earning as much as in the past, but I think we will cut back those hours, so things might end up a wash if we do that. But the pace of saving will scale back at that point and we will live a bit, so I don’t expect to be someone burning the oil so that I can live it up when I retire. To me that seems like a bit of a waste as well, especially since you never know what life will throw at you along the way. I’d hate to have neglected enjoying a bit of life to save for retirement, only to have life bite back and hand you an illness that you didn’t foresee, or an accident, or lose a loved one that you wanted to spend time with but didn’t because you were working hard to save for retirement. But what living on one wage when we could be living in two has shown us is that the security of having that savings as backup feels almost as good to us as spending it. We also have an appreciation for living within our means, and how we feel very happy with the Japanese import that is paid off instead of the Porsche that wouldn’t be; and we prefer the smaller house with nicer things, and the fact that we go on decent vacations and stay in nice places instead of buying the pickup truck for the nice trailer you bought that sits in storage most of the year.
I don’t really know what arrangements physicians make, and their wages and arrangements with facilities is all over the spectrum. If they are part of a larger health system, then I can’t help but think there is some kind of 401k set up with generous matching in place. The few that are captain of their own ship probably are the ones that have to put in place a self started system, but I hear that’s done easily enough.
One of the reasons I picked psyche has to do with the ability to practice into my later years, and I have plans for that.
So anyway, most NPs can work through school. I decided against pursuing PA because overall it would cost me over $280,000 in tuition, lost income, relocation, and other expenses, and it would also mess up the groove me and my spouse had settled in to with our system. But PAs seem to have much less debt than the dentists and the physicians of the world (but obviously less income potential as well). I really put a lot of emphaisis upon living within ones means, and exceeding that level of savings whenever you can. I still have nice stuff, and tend to invest in things that last, but I’m very careful about what stuff I accumulate. I eat well, but I eat at home. I invest in tools, and when I do farm out home projects, it’s fornthings that require manual labor in my part. I work overtime instead of risk my body on a project.
