The First 5 Financial Moves to Make After Finishing Residency (In Order)

Your ability to earn $340,000 or more per year for the next 30 years is your single most valuable financial asset. A physician earning $350,000 from age 33 to 65 will generate over $11 million in career earnings — before raises. That asset needs to be insured before you invest a single dollar.

Own-occupation disability insurance is the first purchase you make as a new attending. Own-occupation means you receive benefits if you can't practice your specific specialty — a hand surgeon with a tremor who could theoretically teach still gets paid. "Any-occupation" policies (which most employer group plans use) would deny that same claim. Purchase an individual policy within your first 90 days of attending practice, before any health change — a back injury, a mental health diagnosis, a high lab value — can affect your insurability. Pay the premiums with after-tax dollars so that benefits are tax-free if you ever need them. If you locked in a training discount during residency (10-20% depending on carrier), that discount stays with you for life.

Typical cost: $300–$600/month for a $10,000–$15,000 monthly benefit, depending on specialty and state. California premiums are 25-40% higher than the national average.

Term life insurance is the second purchase. If anyone depends on your income — spouse, child, aging parent — you need coverage. A 20-year or 30-year level term policy at 10x to 15x your income is the standard framework. At 33 and healthy, a $3.5 million 30-year term policy costs roughly $100 to $200 per month. This is not the time for whole life, variable life, or any cash-value product — those conversations can happen later, if at all, once the foundation is built.

We covered the broader asset protection framework — including umbrella liability and malpractice considerations — in our guide on how physicians can protect their assets from malpractice lawsuits.

Before you start throwing money at loans or investments, you need three to six months of living expenses in a high-yield savings account. That's it. Not a year. Not a "comfort fund." Just enough that an unexpected expense — a broken furnace, a car repair, a gap between jobs — doesn't force you onto a credit card or into liquidating an investment at the wrong time.

For most new attendings living on $8,000 to $12,000 per month in expenses, that's $24,000 to $72,000. If you're coming out of residency with almost no savings, don't let this number paralyze you. Fund it over your first three to six months of attending paychecks. Even $15,000 in a high-yield savings account earning 4-5% gives you a meaningful cushion while you build toward the full target.

Why this comes before investing and loans: because without it, every financial decision you make is fragile. One emergency without a buffer, and you're taking on high-interest debt (credit cards average 21% APR) to cover it — which wipes out any math you've done on loan payoff vs. investing.

Notice this says "lock in your strategy," not "start paying aggressively." The strategy comes first because making the wrong choice here — refinancing when you should be on PSLF, or staying on IDR when you should be paying off — can cost you six figures over the life of the loans.

The AAMC reports that the Class of 2025 graduated with a median of $215,000 in education debt, with 70% of graduates carrying loans. Federal loan rates for 2025-2026 are 7.94% (Direct Unsubsidized) and 8.94% (Direct PLUS). That's expensive debt by any standard.

If you work for a qualifying nonprofit employer (most hospitals, academic centers, VA systems): evaluate PSLF seriously. Payments made during residency and fellowship count toward the 120-payment requirement. If you have three years of training payments already, you may be only seven years from tax-free forgiveness. Under the IBR plan (10% of discretionary income for loans from 2014-2026), your payments during low-income residency years are where the biggest savings accumulate. The new Repayment Assistance Plan (RAP), launching July 2026 under the One Big Beautiful Bill Act, offers forgiveness at 30 years but it's taxable — PSLF at 10 years remains tax-free.

If you work for a private practice or for-profit employer: refinancing into a lower-rate private loan may make sense once your attending income is established. Several lenders offer physician-specific refinancing with rates as low as 4-5% for strong credit profiles. But refinancing federal loans means permanently losing access to IDR, PSLF, and federal forbearance protections — make sure you're not going to change your mind.

The one thing to never do: ignore the loans while you "figure it out." Interest is accruing every day. Every month you spend on forbearance or the wrong repayment plan is money lost. Make a decision, even if it's imperfect, and course-correct later.

At $340,000 in income, you're in the 32% federal bracket and (in California) paying an additional 9.3-11.3% to the state. Your combined marginal rate on the next dollar is roughly 43%. That makes every dollar you can shelter from taxes enormously valuable — and it means the opportunity cost of not maxing these accounts is higher for you than for almost anyone else.

Here's the order, based on the 2026 contribution limits:

If you can max A through E, you're sheltering roughly $64,550 per year from taxes — saving approximately $28,000 in federal and state taxes annually. Over a 30-year career, the tax savings alone compound into hundreds of thousands of dollars. For the full playbook, see our post on tax strategies every physician should know and our broader guide to 20 tax reduction strategies for high earners.

Moves 1 through 4 protect your income, build a buffer, set your loan strategy, and maximize tax-advantaged savings. Move 5 is the long-term infrastructure that most new attendings skip because it doesn't feel urgent. It is.

Estate planning. If you have a spouse, a child, or significant assets (which you will very soon), you need at minimum a revocable living trust, durable powers of attorney, and healthcare directives. In California, probate is slow and expensive — statutory fees can exceed $20,000 on a $1 million estate. A basic trust-based estate plan costs $2,500 to $5,000 and prevents your family from navigating the probate system during the worst moment of their lives. We covered the full framework in our guide on estate planning essentials for physicians.

A financial plan — not just a portfolio. A financial plan is different from "investing." It's a model that coordinates your investment strategy, tax approach, insurance coverage, loan repayment, retirement timeline, and estate plan into a single system. It tells you whether you're on track, what needs to change, and what the trade-offs are between paying off loans faster vs. investing more vs. upgrading your housing. Without one, you're making each decision in isolation, which almost guarantees you'll optimize for one thing while accidentally undermining another.

Beneficiary designations. This takes 20 minutes and is one of the most commonly neglected tasks. Your 401(k), 403(b), IRA, and life insurance policy all pass to whoever is named as the beneficiary — regardless of what your will or trust says. If you got married, had a child, or changed your life situation since you opened these accounts (in residency, probably), your beneficiary designations may be wrong. Fix them now.

Umbrella liability insurance. At your income level and growing asset base, a $1M to $2M umbrella policy costs roughly $300 to $500 per year and protects you from catastrophic liability beyond your home and auto coverage. For physicians, who face elevated litigation risk in California, this is a small cost for meaningful protection.