Financial Planning & Investing for Physicians
You Worked a Long Time to Earn More. Now Make Sure You’re Keeping Enough of It.
Becoming a physician isn’t exactly the traditional path to building wealth.
While friends were earning paychecks, contributing to retirement plans and buying their first homes, you may have been accumulating degrees, student loans and an impressive collection of scrubs.
Then residency arrived.
Long hours. Modest pay. Very little time.
And eventually, seemingly overnight, the attending paycheck showed up.
That’s when an interesting thing happens.
You finally make real money.
And everyone seems to have an idea for how you should spend it.
The bigger house.
The nicer car.
The vacation you’ve been postponing for ten years.
None of those things is inherently bad.
But a high income and financial independence are two very different things.
At Unique Investment Advisors, we help physicians and medical professionals turn the income they’ve worked so hard to earn into something potentially much more valuable:
Choice.
Choice about how much you work.
Choice about when you retire.
Choice about what your life looks like outside medicine.
Because making a lot of money is nice.
Not needing the next paycheck is better.
A High Income Can Hide a Lot of Financial Mistakes
It’s difficult to feel financially vulnerable when you’re earning $300,000, $500,000 or more a year.
There is usually enough money coming in to fix things.
The oversized mortgage payment gets paid.
The car payment gets paid.
The credit card gets paid.
Another expensive vacation somehow fits into the budget.
And there’s still money left over.
Everything looks fine.
Until you ask a different question:
How much of that income is actually becoming wealth?
That’s where the numbers can become uncomfortable.
A physician earning $500,000 who builds a $450,000 lifestyle may have less financial flexibility than someone earning half as much who consistently invests a meaningful portion of what they earn.
Income is what comes through the door.
Wealth is what stays.
And financial independence comes from what you do with the difference.
The Attending Paycheck Changes Everything
Going from residency income to attending income can feel like someone suddenly removed the financial speed limit.
You’ve waited years.
You sacrificed.
You worked nights, weekends and holidays.
Surely you’ve earned the right to enjoy some of it.
You have.
The problem isn’t enjoying your money.
The problem is allowing every raise to quietly become a permanent expense.
The $2,000 mortgage becomes $7,000.
The reliable car becomes two luxury payments.
The occasional nice dinner becomes the normal Tuesday night.
Pretty soon, the lifestyle requires the physician paycheck.
That’s lifestyle inflation.
And it has an interesting side effect:
The more expensive your life becomes, the more money you need before work becomes optional.
So spend money on things you genuinely value.
Take the trip.
Buy the house you love if you can comfortably afford it.
Enjoy what you’ve earned.
Just don’t accidentally build a life that owns you.
How Much Should a Physician Be Investing?
This is one of the most common questions physicians ask.
Unfortunately, there isn’t a magical percentage.
A physician who begins investing seriously at 32 has a different situation than someone starting at 42.
A household spending $120,000 a year has a very different target than one spending $300,000.
Pensions, Social Security, existing assets, debt, retirement age, taxes and the lifestyle you want all matter.
That’s why we prefer working backward.
Instead of starting with:
“What percentage should I save?”
Start with:
“What would I like my life to look like, and what will it take to fund it?”
Then determine how much needs to be invested today to give you a reasonable path toward that future.
The answer might be 15%.
It might be 25%.
It might be considerably more during your peak earning years.
The percentage isn’t the goal.
The life you’re trying to fund is.
Your 401(k) Isn’t the Entire Plan
Maxing out a retirement plan can feel like you’ve checked the investing box.
For many high-income physicians, it’s just the beginning.
Depending on your employment and circumstances, your financial picture might include a 401(k), 403(b), 457 plan, pension, IRA, Roth IRA, taxable brokerage account, health savings account, practice retirement plan or some combination of them.
Then come the questions.
Pre-tax or Roth?
Should I invest beyond my employer plan?
Should I use a backdoor Roth strategy if I’m eligible?
Where should different investments be held?
How much cash should I maintain?
What should I do with an old retirement plan?
There isn’t one account that’s automatically “best.”
The goal is to understand what each account does and how the pieces work together.
Because collecting financial accounts isn’t the same thing as having a financial plan.
Investing Shouldn’t Become Your Second Job
Physicians are trained to solve problems.
That’s useful in medicine.
Markets are different.
There is always another piece of information to analyze.
Another economic forecast.
Another stock someone says you have to own.
Another recession prediction.
Another person on television explaining with remarkable confidence what the market will do next.
And then next week, there’s another one.
We don’t believe successful investing requires predicting the future.
Our investment philosophy emphasizes financial science, diversification, discipline and a long-term perspective rather than speculation and trying to guess the market’s next move.
That’s particularly important for busy professionals.
You already have a career.
Your portfolio shouldn’t require one.
A thoughtfully designed investment strategy should give you more time to live your life, not another screen to stare at between patients.
Being Smart Doesn’t Make You Immune to Being Human
Here’s one of the more interesting things about investing.
Intelligence doesn’t eliminate emotion.
Physicians spend their careers gathering information, analyzing possibilities and making decisions.
So when markets become uncertain, doing nothing can feel unnatural.
Surely there’s something to fix.
Something to sell.
Something safer to buy.
Some warning everyone else is missing.
But investing isn’t medicine.
There isn’t always a test that tells us what’s coming next.
Markets can fall when the news looks good and rise when the news looks terrible.
That’s why investor behavior matters.
Fear can make investors sell after markets have already fallen.
Excitement can make them buy after something has already soared.
Overconfidence can make diversification feel unnecessary.
And hindsight has an amazing ability to make yesterday’s uncertainty look obvious.
Our role isn’t to eliminate emotion.
We’re human too.
It’s to help keep temporary emotions from making permanent financial decisions.
Taxes Matter. But Don’t Let the Tax Tail Wag the Financial Dog.
Higher income makes taxes impossible to ignore.
That’s why physicians often spend a lot of time searching for ways to reduce them.
Sometimes that makes sense.
Sometimes the pursuit of a tax deduction creates a worse financial decision.
Saving $30 in taxes by spending $100 you didn’t need to spend still leaves you $70 poorer.
Tax planning should support the financial plan, not become the financial plan.
Depending on your circumstances, decisions may involve:
• Pre-tax versus Roth retirement contributions
• Taxable investment accounts
• Roth and backdoor Roth strategies
• Charitable giving
• Capital gains
• Tax diversification
• Retirement withdrawal strategies
• Roth conversions during lower-income years
Your highest-earning years and your early retirement years can present very different planning opportunities.
That’s why we think beyond this year’s tax return.
Sometimes the better question isn’t:
“How do I pay the least tax this year?”
It’s:
“How do today’s decisions affect my lifetime financial picture?”
[EXPLORE ROTH CONVERSION PLANNING]
When Does Practicing Medicine Become Optional?
This may be our favorite financial question for physicians.
Not:
“When should I retire?”
But:
“When could I?”
Those are very different questions.
You may love practicing medicine and continue working well beyond the point when you need the income.
Great.
You may want to cut back to three days a week.
Take fewer calls.
Travel more.
Teach.
Volunteer.
Open your own practice.
Start an entirely different career.
Or retire at 55 and never look at another hospital parking garage again.
The objective isn’t to convince you to stop working.
It’s to help you reach the point where the decision belongs to you.
Financial independence doesn’t mean you have to leave medicine.
It means you no longer have to stay.
Retirement Creates a New Set of Problems
Building wealth and using wealth require different skills.
During your career, the basic rhythm is fairly simple.
Money comes in.
You spend some.
You invest some.
Repeat for several decades.
Then one day the paycheck stops.
Now the questions change.
Which account should fund your lifestyle first?
When should you claim Social Security?
How much can you withdraw?
Should you convert some traditional retirement money to Roth?
How could those conversions affect Medicare premiums?
What happens when required minimum distributions begin?
How much investment risk do you still need?
How do you prepare for a retirement that could last 30 years?
Physicians who have accumulated substantial pre-tax retirement assets can face particularly important decisions during the years between their final paycheck and required minimum distributions.
Those years may create opportunities that weren’t available while you were earning at your peak.
Retirement planning shouldn’t begin the day you retire.
Ideally, it begins while you still have choices.
What Are You Actually Building All This For?
It’s easy to spend decades chasing numbers.
First $100,000.
Then $500,000.
Then $1 million.
Then $2 million.
And somehow the finish line keeps moving.
But money without a purpose is just a number on a screen.
So eventually, we think the conversation needs to change.
What do you want your money to do?
Buy back your time?
Allow one spouse to stop working?
Pay for your children’s education?
Travel?
Help your parents?
Support causes you care about?
Leave something meaningful behind?
Give you permission to say “no” to another shift?
There’s no universally correct answer.
That’s precisely the point.
It’s your answer that matters.
We believe financial planning should help connect the money you’ve accumulated with the life you actually want to live.
Financial Planning for Physicians Should Look at the Whole Picture
A portfolio doesn’t exist by itself.
Neither does a retirement plan.
Neither does a tax strategy.
Your investments, spending, taxes, retirement accounts, insurance, estate plan, business interests and family goals can all affect one another.
At Unique Investment Advisors, our approach combines financial planning, evidence-based investing, investor education and behavioral coaching to help physicians make more informed decisions about the wealth they’re building.
We work with physicians and medical professionals from our office in Ahwatukee, Phoenix, as well as clients beyond Arizona.
Our goal isn’t to make your financial life more complicated.
It’s to help make the complicated parts easier to understand.
Questions Physicians Frequently Ask
How much should a physician save for retirement?
There isn’t one percentage that’s appropriate for every physician. Your current age, desired retirement age, lifestyle, existing investments, income sources and expected retirement spending all influence how much you may need to save.
Rather than relying solely on a generic percentage, we believe it makes more sense to identify the future you’re trying to fund and work backward.
How much does a physician need to retire?
The number depends heavily on spending.
Two physicians with identical $4 million portfolios could be in completely different financial positions if one household spends $120,000 annually and the other spends $300,000.
Your assets matter.
The lifestyle those assets need to support matters just as much.
Should physicians invest outside a 401(k) or 403(b)?
For many high-income physicians, employer retirement plans may be only one component of their overall investment strategy. Depending on individual circumstances and available plans, additional investment vehicles may play a role in building wealth, creating tax diversification and funding goals before traditional retirement age.
Should physicians choose Roth or pre-tax retirement contributions?
It depends. Your current marginal tax rate, expected future income, available plan options, retirement strategy and future tax situation can all matter.
The highest deduction today isn’t automatically the best lifetime strategy.
What is a backdoor Roth IRA?
A backdoor Roth IRA is a strategy some higher-income taxpayers use to fund a Roth IRA indirectly when their income prevents them from making a direct Roth IRA contribution. The tax consequences can become more complicated when an individual owns other pre-tax IRA assets, so the strategy should be evaluated in the context of the individual’s overall tax situation.
Do physicians need a financial advisor?
Not necessarily.
Some physicians have the knowledge, time, discipline and desire to manage their financial lives themselves.
Others would rather spend that time practicing medicine, being with their families or doing almost anything other than reading retirement-plan documents on a Saturday night.
A financial advisor may provide value by helping coordinate decisions, build an investment philosophy, evaluate tradeoffs and provide perspective when emotions and markets become difficult.
What should a physician look for in a financial advisor?
Ask how the advisor is compensated, whether and when they act as a fiduciary, how they approach investing, what services they provide, who they typically work with and how financial planning extends beyond the investment portfolio.
Most importantly, make sure you understand the answers.
Complexity shouldn’t be used to make financial advice sound impressive.
You Built the Career. What Do You Want It to Buy You?
You already did the hard part.
The medical school applications.
The exams.
The residency.
The long nights.
The missed weekends.
The years of delayed gratification.
Now the question isn’t simply how much you can earn.
It’s what all those years of work can ultimately make possible.
Maybe that’s retiring early.
Maybe it’s practicing on your terms.
Maybe it’s more time with the people you love.
Maybe it’s knowing you could walk away tomorrow even though you have absolutely no intention of doing it.
That’s financial independence.
Not a number for the sake of having a bigger number.
Choice.
And we think that’s something worth planning for.
Unique Investment Advisors, LLC
9633 S. 48th Street, Suite 130
Phoenix, AZ 85044
