Late Start, Strong Finish—Retirement Planning for the Healthcare Professional
Jessica Briscoe, PharmD, Wealth Strategist at Bergamot Asset Management
Why Healthcare Professionals Feel Behind
Healthcare professionals invest years in school, residencies, and fellowships — often well into their 30’s before earning a strong income. Add in student loans, long work hours, growing families, and delayed saving, and it’s natural to feel behind compared to peers in other fields.
The Good News: You Have Catch-Up Advantages
- High Income Trajectory: Once training is complete, healthcare professionals typically have stable, above-average earning potential. With additional specialization, income diversification becomes a major advantage. Think about consulting, entrepreneurship opportunities, and administrative roles that bring in additional income without adding major workload or time commitments.
- Specialized Retirement Plans: Access to multiple retirement savings vehicles such as 401(k)s, 403(b)s, 457(b)s, and defined benefit plans like cash balance plans can accelerate wealth building in a powerful way.
In 2026, employee 401(k) contributions are capped at $24.5K annually, with an additional $8K catch-up for those age 50 and older. Add in employer contributions—through matching programs, profit sharing, and non-elective contributions—for an annual maximum 401K contribution of $72K.
By contrast, a Cash Balance plan (a type of pension-style plan) allows much higher contributions. Depending on your age, income, and years to retirement, you may be able to defer well over $300K annually. These contributions not only lower your taxable income for the year—reducing your immediate tax bill—but also grow through the long-term power of compounding within a tax-deferred retirement account. For high-income professionals, this combination can dramatically accelerate the path to retirement readiness.
- Late-Career Longevity: Many physicians and clinicians work into their 60s or beyond, whether in a reduced capacity or a personally-balanced way, giving extra years for saving and compounding.
What steps can you take today to close this gap and build momentum?
- Maximize Tax-Advantaged Accounts: Consider contributing fully to 401(k)/403(b) and IRA accounts; consider Backdoor Roth IRAs for high earners. Take advantage of Cash Balance plans if available.
- Use Catch-Up Contributions: Starting at age 50, IRS rules allow extra contributions — a powerful tool if you feel behind.
- Tackle Student Debt Strategically: Refinancing or forgiveness programs can free up cash flow for investing.
- Automate Investing: Setting up automatic monthly contributions helps you stay consistent despite demanding schedules. Dollar-cost averaging into investments accounts reduces the emotional tug to time the market.
- Diversify Beyond Retirement Plans: Brokerage accounts, real estate, private placements for accredited investors, and practice ownership can build additional long-term wealth.
The most important step to take, however is always the first step.
Potius sero quam numquam—Better late than never.
Disclosure: Bergamot Asset Management LP and its affiliates do not offer legal, accounting or tax advice. The content herein is for informational purposes only and should not be construed as a solicitation.
