Money

Physician finances: the five decisions that matter more than picking funds

Doctors start earning late, carry large loans, and are sold more financial products than almost any other profession. The decisions below are the ones that compound, and the order matters.

1. Own-occupation disability insurance, before anything else

Your earning power is the asset. A true own-occupation policy pays if you cannot perform the duties of your specialty, even if you could work in another job. Group coverage through an employer is usually "any occupation" after two years, capped, taxable, and not portable. Buy an individual policy early: premiums lock at your age and health at purchase, and residents and fellows get discounted rates. Look for riders that matter: residual (partial) disability, future purchase option, and cost-of-living adjustment.

2. Student loans: PSLF or pay it down

PSLF route

120 qualifying monthly payments while employed full-time by a 501(c)(3) hospital or academic center, on an income-driven plan. Residency and fellowship years count. For a hospital-employed physician with $250,000+ in federal loans, forgiveness can be worth several hundred thousand dollars tax-free. Certify employment every year.

Private practice route

No PSLF. Refinance to a lower rate once income is stable, keep federal loans federal if you might return to a nonprofit employer, and treat the payoff as a guaranteed return equal to the interest rate.

3. Use every tax-advantaged account your employer offers

Nonprofit hospital employees often have both a 403(b) and a governmental 457(b), which can each be funded to the annual limit, effectively doubling pre-tax retirement space. Private-practice owners can open a solo 401(k) or cash-balance plan with far higher limits. Most physicians earn too much for a direct Roth IRA but can contribute through the backdoor Roth process each year. A health savings account, if you have a high-deductible plan, is the only account that is tax-free going in, growing, and coming out.

4. The advisor question

• Prefer a fee-only fiduciary registered investment advisor. "Fee-based" is not the same thing and usually includes commissions.
• Physician-focused firms exist and are worth considering because they understand contracts, PSLF, and practice buy-ins. Check them on the SEC's IAPD database like anyone else.
• A flat annual fee or hourly engagement often beats a percentage of assets once you have a seven-figure portfolio.
• Be skeptical of whole-life insurance pitched as an investment, and of anything sold at a hospital-sponsored dinner.

5. Contract and practice-ownership decisions

Have every employment contract reviewed by a healthcare attorney: non-compete radius, tail coverage for malpractice, productivity formulas, and termination terms. For a practice buy-in, the questions are valuation method, how the buy-in is financed, and what happens on exit. An ambulatory surgery center share is often the most valuable ownership stake an interventional physician can hold.

Educational content only, not financial, tax or legal advice. Sponsored placements are labeled and do not influence editorial content.