Achieving Financial Success as a Dual Physician Couple

By: Rikki Racela, MD

Published: Oct 17, 2023

📂 Physician Perspectives

Written for:

✅ Residents and Fellows

✅ Early Career Physicians

✅ Mid Career Physicians

✅ Established Professionals

Navigating the complex world of personal finance as a dual physician couple presents both unique challenges and opportunities. With this guide, I aim to offer a seamless blend of professional advice and real-life experiences, drawing from my own journey alongside expert insights from the Andwise team.

The Importance of a Customized Plan

The one-size-fits-all approach is seldom effective in financial planning, especially for specialized professions like medicine. My wife and I found ourselves neck-deep in student loans, making our first crucial step an exploration of various repayment options. We consulted experts and opted for a strategy tailored to our specific situation, which did wonders for our financial peace of mind.

Customized financial planning can significantly alleviate debt anxiety, especially when it comes to student loans. Options such as income-driven plans, loan forgiveness, and refinancing should be explored.

Prioritize Insurance

One of the most costly mistakes we made was buying into whole life insurance sold to us by Northwestern Mutual. This decision bled us financially dry. We learned the hard way and switched to term life insurance, along with "true own occupation" disability insurance.

Term life and specialized disability insurance generally offer better financial protection and return on investment for high-earning professionals.

Leverage Employer Benefits

We didn't realize the power of employer matching contributions to our retirement account until we did the math. Once we understood it, we adjusted our contributions to maximize this "free money."

Always aim to take full advantage of employer match programs; they can significantly accelerate your retirement savings.

Tax Management

Being in the highest tax brackets, we found that maximizing contributions to traditional retirement accounts offered us substantial tax breaks. We effectively saved about half of what we would otherwise have paid in taxes.

High-income earners should explore tax-advantaged accounts like HSAs and traditional retirement accounts to minimize tax liability.

Tackling Debt

High-interest debt was a major stumbling block for us. Thanks to our combined income, we prioritized these debts and tackled them head-on, preventing any substantial drain on our wealth.

High-interest debt, particularly from credit cards, can be a significant impediment to wealth accumulation. Prioritizing their payoff is key.

Portfolio Diversification

Having access to additional retirement accounts like the '457' plan allowed us to diversify our investments, spreading risk while increasing the potential for return.

Diversification is essential in financial planning. It provides a balanced approach to managing risk and return.

Emergency Planning and Medium-Term Goals

We initially had a small emergency fund, but over time, we built it to cover at least six months of expenses. This became invaluable during unexpected financial disruptions.

An adequately funded emergency account serves as a financial cushion, allowing you to manage unforeseen expenses without resorting to debt.

Setting and Reaching Financial Milestones

Despite maxing out our retirement accounts, we set a goal to save at least 20% of our gross income for retirement. To achieve this, we utilized a taxable brokerage account.

Having clear financial goals makes it easier to develop and adhere to a comprehensive financial plan. It serves as a roadmap for future planning.

Wrapping up

Our financial journey as a dual physician couple has had its challenges, but it's also been immensely rewarding. We hope that by sharing both our experiences and expert insights, you can navigate your own financial journey more confidently.

Remember, it's essential to adapt these steps to your personal circumstances and consult with a financial advisor when necessary.

At Andwise, we're committed to empowering physicians with the resources and community they need to achieve financial stability and success.

Rikki Racela, MD ⇨

Member, Andwise Medical Advisory Board

Dr. Rikki Racela, MD, is a neurologist based in Englewood, NJ, with a broad range of specialties and a deep commitment to patient care. He graduated from Princeton University in 2003 with a major in Molecular Biology and a minor in Neuroscience, before completing his medical degree at Rutgers-Robert Wood Johnson Medical School in 2007. Dr. Racela further honed his expertise in neurology at NYU School of Medicine, where he notably served as chief resident, and completed a fellowship in clinical neurophysiology. His professional journey has been distinguished by a return to New Jersey, where he joined Bergen Neurology Consultants and contributed significantly to Englewood Hospital as the stroke director from 2014 to 2015.

Dr. Racela's practice at Bergen Neurology Consultants involves a comprehensive array of diagnostic and therapeutic services, including cognitive testing, EEG, EMG, evoked potential studies, and sleep studies, among others. He treats a wide range of neurological conditions such as ALS, Alzheimer's Disease, epilepsy, headaches, multiple sclerosis, neuropathy, and stroke, to mention just a few. His dedication to neurology is further underscored by his board certifications in neurology and electrodiagnostic medicine, alongside his recognition within the medical community, including being named a Top Doctor by Bergen Magazine in 2019.

Beyond his clinical roles, Dr. Racela is passionate about financial literacy for physicians, contributing columns to The White Coat Investor, highlighting the importance of financial knowledge in the medical profession. His diverse interests and accolades, including leadership roles and advocacy for physician education, make him a prominent figure in his field

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