If you’re like most doctors, you didn’t go into medicine for the money—but you do want the freedom that comes from knowing you can practice medicine because you want to, not because you have to. And that is a big difference. You also want to set yourself on a track to be able to retire when and how you want. That’s the beauty of financial well-being and having a personalized plan to reach FIRE. But here’s the truth: most doctors don’t actually have a clear retirement plan.

They might be saving, investing, or vaguely thinking about “someday,” but without a defined strategy, they risk falling short of their goals.

Based on what I’ve learned personally and from working with thousands of doctors through The Prudent Plastic Surgeon, here are five ways to optimize your retirement planning—so you can hit your goals, protect your lifestyle, as well as practice and eventually retire on your own terms.

5 ways doctors can optimize their retirement planning

1. Define Your Target Nest Egg

You can’t optimize something you haven’t defined. One of the biggest mistakes doctors make is starting to invest without a clear goal for how much they need in retirement.

Start with a simple question:
“What will my annual expenses be when I retire?”

If your target is $200,000 a year, the 4% rule tells us you’ll need a nest egg of about $5 million. This isn’t random—it’s based on the Trinity Study, which shows that withdrawing 4% from a diversified portfolio historically allows your money to last for decades.

Action Step:

Write down your current spending and estimate what will drop off in retirement (student loans, mortgage, kids’ expenses) and what might go up (travel, healthcare). Multiply your projected annual expenses by 25—that’s your starting target.

The beauty here is your spending is always under your control and you can personalize it based on where your current trajectory to financial freedom stands. If you need to get your spending under control, use my budgeting template to help.

2. Reverse Engineer Your Savings Plan

Once you have your target, the next step is working backwards to figure out exactly what you need to save and invest each year to hit it.

This is where most doctors get stuck—they know the big number, but not the pathway. That’s why I use a simple retirement calculator (you can find mine here) to plug in:

• Years until retirement
• Current savings
• Expected annual return (I recommend a conservative 5% after taxes and inflation)
• Target nest egg

For example:

• 20 years to retirement → need to save around $76,000/year to hit $5 million.
• 35 years to retirement → closer to $56,000/year.

Notice how much time impacts the savings burden. That’s why starting early—yes, even during residency—pays off massively.

Action Step:

Use a calculator to run your numbers. Get clear on your annual savings target and break it into a monthly number. Automate that savings so you don’t have to think about it. That amount should go directly from your paycheck to your investment accounts without you ever seeing it.

3. Keep It Simple with Low-Cost, Diversified Investments

You don’t need a fancy hedge fund strategy or to spend your nights stock-picking. In fact, complexity usually hurts more than it helps. The best retirement portfolios I’ve seen—mine included—use low-cost, broadly diversified index funds across stocks and bonds.

Why?

Because it’s predictable, tax-efficient, and time-tested. It also frees you to focus on your career and your life rather than tracking market swings. A boring plan that you stick with beats a flashy plan that you abandon.

Plus, a passive investing strategy with index funds will beat an active investing plan 80% of the time.

Action Step:

If you don’t already have a written investment policy statement (IPS), create one. This document outlines exactly how you invest, including your asset allocation and rebalancing plan. Then follow it, no matter what the headlines say.

4. Build in Buffers for Taxes, Inflation, and Longevity

One reason I aim for a $5 million nest egg isn’t just because I like round numbers—it’s because I want a margin of safety.

Even the 4% rule isn’t foolproof. Inflation, taxes, longer lifespans, and market volatility can all chip away at your plan. If you plan for those challenges in advance, you won’t be caught off guard.

Here’s how to do it:

• Inflation: Assume your expenses will rise 2–3% per year, even in retirement.
• Taxes: Diversify across taxable, tax-deferred, and tax-free accounts (like a backdoor Roth IRA) so you can control your withdrawal strategy.
• Longevity: Plan for at least 30 years of retirement, even if you expect less.

Action Step:

Add a 20–30% cushion to your target nest egg. If your bare-minimum number is $4 million, shoot for $5 million. The extra margin buys peace of mind.

5. Review and Adjust Your Plan Regularly

Your retirement plan is a living document, not something you set and forget. Life changes—jobs, income, family size, market conditions—and your plan should adapt.

I review my retirement projections every year. If my savings rate slips or my investment returns lag, I know early and can make course corrections before it’s too late. Likewise, if things go better than expected, I can decide whether to accelerate my timeline or increase spending in retirement.

Action Step:

Create a written financial plan that includes your retirement calculations. Here is mine.

But that's not it. Then you need to schedule an annual “financial checkup” on your calendar, just like you’d schedule a health check for a patient. Update your net worth, re-run your retirement numbers, and confirm you’re still on track.

The Mindset Shift That Makes It All Work

All five of these strategies hinge on one thing: living below your means and consistently redirecting the difference into your investments. For many doctors, the hardest part isn’t running the numbers—it’s resisting lifestyle creep while the attending paychecks are rolling in.

When you master that skill, the rest of the retirement planning process becomes straightforward. You’ll know your target, have a concrete savings plan, invest simply, build in safety margins, and adjust as needed.

And that’s the formula that lets you choose when and how to retire—not the hospital, not the market, and not your bills.

Start Today

Optimizing your retirement planning doesn’t mean sacrificing your life now—it means creating the freedom to design your life later. As doctors, we have the income potential to reach financial independence relatively quickly. The key is starting with intention, sticking to a plan, and letting time and compounding do the heavy lifting.

Here’s your quick start:

1. Define your retirement target.
2. Reverse engineer your annual savings rate.
3. Invest simply and consistently.
4. Build in buffers for safety.
5. Review your plan yearly.

Follow these five steps, and you’ll have more than just a retirement plan. You’ll have control over your financial future.

For a one-stop shop that will walk you through all of the actionable steps needed to get your financial well-being in order and ensure your track to FIRE, check out my best-selling book, Money Matters in Medicine!

What do you think? Are your retirement plans optimized? What else can doctors do to ensure retirement on their terms? Let me know in the comments below!