What to do if you’ve saved nothing for retirement

By Jonathan Ford Hughes | Fact-checked by MDLinx staff
Published September 14, 2022

Key Takeaways

  • If you want to retire and haven't saved enough, there is still time to make up for lost time.

  • If you’re going to keep working, do so as an employed physician. Don’t do locums work or start a practice.

  • Take advantage of catch-up contributions to your retirement accounts, and adjust your lifestyle to help you save.

There’s some very good news in this post, even if it’s slightly anecdotal. We set out to find out what a doctor should do if they have saved little or nothing for retirement and are nearing retirement age. To get answers, we turned to W. Ben Utley of Physician Family Financial Advisors.

According to Utley, he has almost never seen a doctor with no retirement savings. Based on his experience, it would seem that doctors are doing their due diligence when it comes to saving. However, Utley points out that a doctor who didn’t care about their retirement likely wouldn’t be talking to a financial planner, anyway.

With that in mind, there are likely a few doctors in our audience with nothing saved or who have under-saved.

Keep in mind that there are no catch-all, universal retirement solutions. Retirement works on a case-by-case basis, which is why it helps to work with a professional. But there are a few general principles you can follow.

Here’s what you should do and be thinking about if you’re in this situation, according to Utley in the following Q&A:

MDLinx: How late is too late for doctors to start saving for retirement?

W. Ben Utley: How late is too late? I can answer that so many different ways. Well, I guess the easiest answer to this is, if you can live on social security, it’s never too late. That’s the latest you can be.

MDLinx: But how likely is it that a doctor with a typical doctor’s lifestyle could live on social security?

BU: Very low, especially one who has consumed all of their resources as they’ve gone along. That has to be like putting the world’s biggest genie back into the tiniest bottle.

MDLinx: How can doctors get back on track with their retirement savings?

BU: There’s the possibility of making catch-up contributions to your retirement account. It means contributing an extra thousand dollars per year to a traditional IRA, or to a Roth IRA. Or, a catch-up contribution of $6,000 into your 401K or 403B for people who will turn 50 sometime this year.

Making lifestyle adjustments

MDLinx: What if that’s not enough? Is it then time to start making lifestyle adjustments, like selling cars or houses? Is that something a financial advisor will coach a client through?

BU: That’s exactly right. Typically getting rid of personal property is not going to solve the problem because there’s only so many cars and planes that a person typically has. And as expensive as cars and planes are, they’re typically not millions of dollars worth of property. It takes millions of dollars to be able to retire properly.

I once had a prospective client call me who said he was late to the game. He told me he had purchased a house with an elevator in it in Oregon. I asked him, ‘Did you consider moving to Missouri? In Missouri, the cost of that same home is $120,000-$150,000 less.’ Housing costs tend to compete with retirement and sometimes relocating is the best strategy.

"If you don’t have enough money to retire on the West Coast, you’re not going to be able to make it on the East Coast. But you can probably make it in the heartland."

W. Ben Utley

Two options: Save more or spend less

MDLinx: How difficult is it to make these types of lifestyle changes?

BU: Well, we’re not talking about a Band-Aid solution. We’re talking about major surgery here. This is not something that you just wake up and solve.

There are really only two approaches to this problem. One is to save more. The other is to spend less. And if they’re not saving at that point, the chances of them being able to save more are usually pretty small. The only thing that they can typically do is spend a lot less— to downsize their life, to sell homes, to move to a different place, to substantially alter their habits. This is not something that someone in their late fifties, early sixties typically does, ever.

MDLinx: Would you ever advise a doctor to become semi-retired? Work a locums job, or something similar?

BU: No, because if they’re not attentive enough to manage their personal finances well enough to retire, then they’re not attentive enough to be able to run a small business, which is what locums work is. They should become an employee of a facility somewhere. A hospital or regional medical facility, or join a practice where there’s somebody managing it.

A lot of doctors that are behind in their retirement savings were in private practice or something similar. They tried to start their own private practice or run a very small partnership, and they did that for too long, and as a result they just don’t have anything. That is a really common cause of being late to retirement. More so than divorce, because I’ve seen plenty of people that are divorced that are going to be able to retire. But running a business into the ground is an early predictor of a poor retirement.

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