What we have seen with Healthcare Workers

We have discussed the financial picture of resident physicians, attending physicians, travel nurses, physician assistants, and others. With early career physicians, it is common that we help manage and approach considerations about student loans, PSLF (Public Service Loan Forgiveness), and Income Driven Repayment (IDR). We can help you decide whether to allocate more of your paycheck as a young attending towards debt payoff or to save for future needs such as a down payment for a house. Physicians at this transition point have a unique financial profile, a sudden income jump from ~$60-70K to often $250K - 500K+, a large student loan balance, a late start on saving, and a high tax burden.

Frequently Asked Questions:

Student Loans

• I am a doctor with $300K+ in student loans — should I aggressively pay them down or invest instead now that I'm earning more?

  It depends on the interest rate on the loans and if this rate is fixed or floating. We currently recommend that people pay off loans above 6% interest and look to consolidate or refinance large balances with services such as SoFi if they will not be working for a company or hospital which qualifies for PSLF when they become an attending. Paying down a loan is a guaranteed, after-tax return equal to the interest rate. Lastly, many physicians want loans gone for peace of mind, and that's a legitimate input even when the math is close.

• Should I refinance my federal loans with a private lender for a lower rate, and what do I give up if I do?

  The answer is likely yes if you will are working for a healthcare system that does not qualify you for PSLF. Never refinance federal loans while PSLF is still on the table. We are happy to advise because every situation is unique.

• I've been on an income-driven repayment plan during residency — does pursuing PSLF (Public Service Loan Forgiveness) still make sense now that I'm an attending?

  PSLF forgives the remaining federal Direct Loan balance tax-free after 120 qualifying monthly payments made while employed full-time by a 501(c)(3) nonprofit or government employer. Many hospitals, academic medical centers, and VA positions qualify; private-practice groups usually don't. Residency and fellowship at an academic hospital counts toward the total of 120. A physician who did a long residency at a nonprofit may be much closer to forgiveness than they realize.

• Is it worth paying for a loan consultant, or can you help me model forgiveness vs. payoff scenarios?

  There is no need to pay for a separate loan consultant. We will help you end-to-end with planning and executing on debt paydown, consolidation, or whatever course of action seems most helpful.

The Income Jump & Taxes

• My income is about to quadruple. How much of this should I actually be saving versus enjoying after years of deferral?

  You should live a little as a reward for making it to the next phase of your career. If you are starting a family and have childcare expenses all of a sudden, do not feel unjustified in taking up your spending to match your partners contribution at the family level. Buying a Ferrari 488 is a different matter perhaps. The goal is intentional spending, not deprivation. I will build a budget with you from the ground up, and we will make sure there is room for shopping, vacations, or your hobby now that you have reached the attending stage. I also encourage my clients to set up automated transfers into their IRAs and after tax brokerage accounts on the first of the month, very much like paying rent with autopay. Money that does not spend time in the checking account is not there to tempt you.

  For people who are prepared, living like a resident for 2–3 more years is powerful: maintaining a near-resident lifestyle briefly while earning an attending income can knock out loans and front-load retirement savings, buying lots of flexibility later.

• What can I do to manage my tax bill now that I'm in the top federal and state brackets?

• Should I be doing a backdoor Roth IRA, and what does that involve?

• If I do some locum or moonlighting work, how should I handle taxes and should I set up an entity for it?