This week James M. Dahle, MD, The White Coat Investor, published an article in his blog that I penned about my experience of saving for retirement during my residency. It is possible to do so and I was able to save enough before I left my five years of general surgery residency that the account will exceed $1,000,000 in value by the time I reach my 70th birthday. That is money I wouldn’t have had if I waited to start saving until after I became an attending. Here is a small excerpt from that blog post.
As The White Coat Investor has stressed many times, saving for retirement needs to start early to take the greatest advantage of compound interest. Many residents don’t believe they can save anything until after they start their practice. I encountered that roadblock during my residency when I tried, without success, to convince my fellow residents to contribute to the retirement plan offered by our hospital. Only one other resident joined me. All the rest of them felt they needed to spend their entire paycheck each month on current needs.
One resident told me he would begin to contribute to his retirement plan after he was an attending and making big bucks. He felt his contribution as a resident would be so small compared to the massive amount of money he would save as an attending that it would not be worth the sacrifice. The problem with that type of thinking, the I’ll start tomorrow mentality, is that tomorrow never seems to come. As an attending the story changes to “I’ll start saving as soon as I get settled.” Then it’s “as soon as my student loans are paid off.” Then, “when I get this car/motorhome/boat paid off.” It seems there is never a good time to begin diverting money from the present to the future.
You can read the full article at the site listed below to catch all the details.
Savings is a tool best used early and often. The longer you have compound interest working for you, the greater the effect.
What did you do as far as retirement savings during your residency? Comment below.