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For doctors-in-training, retirement often feels like a far-off concept, overshadowed by exams, 80-hour workweeks, and hefty student loan balances. But residency presents an opportunity to set the tone for your financial future. Even small retirement contributions during this phase of your career can yield long-term benefits.
So how much should you contribute to retirement during residency? The short answer: as much as you reasonably can, even if it’s just a little. The long answer? It depends on your financial goals, debt burden, and lifestyle. Let’s break down what you need to consider.
Why Retirement Contributions During Residency Matter
The most compelling reason to contribute to retirement while in residency is time. Even small contributions have decades to grow. If you contribute $200/month starting at age 28 and earn a 7% annual return, you’ll have over $500,000 by age 65. Wait until 35 to start, and that same monthly contribution grows to just $300,000. That’s a $200,000 difference, just because of a seven-year delay.
For residents earning between $55,000 and $75,000 per year, budgeting is tight—but carving out even a small portion for retirement savings is both possible and worthwhile. You’re investing in future freedom: financial independence, flexibility to change jobs, or the ability to cut back later in life.
It’s not about how much you save. It’s about starting the habit. Saving now sets the tone for your financial life as an attending, where your income will increase dramatically but so will lifestyle inflation and financial complexity.
The “Right” Amount to Contribute: Guidelines to Consider
There’s no one-size-fits-all answer, but here are a few guidelines tailored for residents:
1. Aim for 10% of income if possible
The gold standard for long-term retirement savings is 15% of gross income, but that’s often unrealistic during residency. If you can save 10%—roughly $5,500–$7,500 annually—you’re ahead of most peers and setting a strong foundation.
2. Start with a smaller percentage, and build up
If 10% feels like a stretch, start with 3% to 5%. Many residents use this strategy and increase their savings rate gradually. Even if you’re only putting $100–$200 a month into a retirement account, that’s a big win. Consistency is more important than perfection.
3. Max out a Roth IRA if you can
In 2025, the Roth IRA contribution limit is $7,000 for individuals under 50. Residents are typically in the lowest tax bracket they’ll ever be in, making a Roth IRA an ideal choice: you pay taxes now on contributions, but your withdrawals in retirement are tax-free.
If you can’t contribute the full $7,000, contribute what you can.
4. Use “windfalls” to catch up
Signing bonuses, moonlighting income, or tax refunds can be great opportunities to contribute a lump sum to retirement. If monthly savings feel tight, these larger one-off contributions can help bridge the gap toward your annual goal.
Best Retirement Accounts for Doctors: Roth IRA vs. 403(b)/401(k)
Roth IRA
A Roth IRA is often the best retirement savings vehicle for residents because:
- Your income is relatively low, so you’re in a lower tax bracket now than you will be in the future.
- Contributions are made post-tax, and withdrawals in retirement are tax-free.
- You have control over your investment choices (compared to an employer plan).
- You can withdraw your contributions (not earnings) penalty-free in case of an emergency.
In 2025, you can contribute up to $7,000 per year to a Roth IRA if your income is below $146,000 (single filer). Most residents qualify.
403(b) or 401(k)
If your hospital offers a 403(b) or 401(k) and matches contributions, take full advantage of the match—it’s free money. Even if you can’t max out the account, contributing just enough to get the full match is worth it.
That said, many hospital systems do not match during residency. If there’s no match, you’re often better off prioritizing a Roth IRA.
Health Savings Account (HSA)
If you’re enrolled in a high-deductible health plan, consider contributing to an HSA. It’s the only account that offers triple tax benefits—contributions are pre-tax, grow tax-free, and can be used tax-free for qualified medical expenses. It can also serve as a secondary retirement account.
Balancing Retirement Contributions with Other Financial Goals
Many doctors-in-training feel stuck choosing between retirement savings, loan repayment, and living expenses. The truth is, you don’t have to pick just one, but you do need a plan.
Student loans
With many residents enrolled in Income-Driven Repayment (IDR) plans, your required payments are manageable, often around 10% of discretionary income. This creates space to save.
If you’re pursuing Public Service Loan Forgiveness (PSLF), contributing to retirement can actually lower your adjusted gross income (AGI), which in turn reduces your monthly loan payment.
Stay up-to-date with the latest student loan changes and learn what they mean for you »
Emergency fund
Before maxing out retirement accounts, ensure you have at least $1,000–$2,000 in an emergency fund. Ideally, build toward 3-6 months of expenses. This buffer prevents you from raiding your retirement savings for unexpected costs.
Avoid lifestyle creep
Lifestyle creep is one of the biggest financial pitfalls for doctors. If you begin your career living modestly and prioritize savings early, you’ll have more control over your finances later. “Live like a resident” is popular advice for a reason—it’s a strategic choice, not a punishment.
How to Make Room in Your Budget
Even on a tight resident salary, there are ways to carve out retirement contributions:
- Automate it – Set up automatic contributions right after payday. You won’t miss the money you never see.
- Live like a student (just a little longer) – Keeping your lifestyle modest for a few more years creates more room to save.
- Use windfalls wisely – Tax refunds, moonlighting income, or gifts can be a great way to make a lump-sum retirement contribution.
- Track your spending – You might find small areas to cut back (subscriptions, takeout, etc.) to free up even $50–$100/month.
Bottom Line
So, how much should you contribute to retirement during residency?
- Ideal: 10–15% of income (if possible)
- Realistic goal: 3–5% of income or $100–$200/month
- Where: Roth IRA first, then 403(b)/401(k) if there’s a match
- Why: Compounding growth, habit building, and tax advantages
- Bonus: Strategic savings can reduce student loan payments under PSLF
Ultimately, the best contribution is the one you can stick to consistently. Even small steps today can lead to big rewards tomorrow. By prioritizing retirement, even during residency, you’re laying the groundwork for long-term financial security.
Other Resources
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