Pay Yourself First - It’s Pretty Straightforward

Save early. Save often. Save enough. 

Save early is the easiest. Start now. A quick reminder about the power of compound interest here: 

So many physicians look for timing the market or for the perfect investment choice to build wealth. But time in the market is far more powerful than timing the market. We want you to get savings into investments every month, starting this month. 

Save often is really easy. Use retirement plans, and the saving happens for you automatically. 

Save enough. Oof. 

Twenty-five percent of physicians have less than $1 million saved according to recent research. This is the same research as last year and the year before. It doesn’t take advanced math to know that’s not enough. 

You want to be able to retire on your own terms one day and don’t want to be in that statistic of docs who can’t retire. And no doubt you are saving right now, but have you ever calculated if how much you are saving is the right amount? Heck, you could be saving too much! (Yes, that’s a thing.) 

We have a great diagnostic for you to use to see if you are roughly on track.  

Simply add up how much money you have in all your savings buckets (work retirement plans, brokerage accounts, etc.) then divide that by your gross annual income (your income before taxes and benefits come out). 

You should have a multiple. Find the column closest to your savings multiple and then slide down to the age closest to your current age. You will get a percentage. 

Multiply that percentage by your gross pay, and you have your targeted savings rate. 

For example, let’s say you are 45 years old, make $300,000 per year and have $900,000 saved. That means you have 3x your current income in savings. Your ideal savings rate would be 25%. 

Take 25% and multiply that by $300,000, and you need to save $75,000 per year to be able to retire by the time you are 65. 

If you are hoping to retire earlier, then you can use this savings table. 

Yes, it’s so much more, but imagine the options and flexibility that opens up with that savings. 

Pay Yourself First. That’s the most powerful tool available to you as a high earning employee. Book an appointment with us to calculate just how much to pay your future self.