[USER]

Hello, I realize I’m in a bad spot overall. Any suggestions on how I should start saving for retirement?
40 years old. Not married, no children.

$325k/yr salary
$50k in savings

Only debt is educational and its a whopping $375k at 5%. Im sure you can guess my career. Ive only been out of training for 1.5 years.

I paid off lots of debt etc.

My job does not match 401k and has no retirement benefits. I don’t have a mortgage or rent currently.

My financial literacy is close to 0. I missed the window on the backdoor roth.

Would love suggestions on how to get started (money market, index funds?) and with what company. Seems Ill never be able to retire at this point.

Thank you in advance!

[Dexter]

Save more, spend less. You are a smart guy, don’t over think it

[Claude]

Awesome income. You have no worries. Downsize all your debt. Then 15-20% invested in a taxable acct.

pay the taxes. Retire early.

[Goss]

Maintain your cash flow, work on savings first and foremost. If you can stretch out your debt long term you’ll be better off.

You’re not going to drink too much some night and get another similar degree on Amazon.

Protect your income.

Work on growing and keep FOMO under control.

[Lisa]

First make a budget so you know where your money is going then get rid of any unnecessary expenses. Do not buy an expensive car or spend frivolously.

Then start reading about various investments and how they work so that you are educated.

Don’t invest in anything you don’t understand. I recommend that you pay off all of your debt first.

By then you will have taken time to learn about investing. Start by fully funding a Roth IRA each year.

You can also save in a taxable account. Look at setting up an account with Charles Schwab and start by putting money into their S&P 500 Index mutual fund (as much as you can).

You can set up the Roth there too. You can look at diversification later after you build up a decent balance.

Then be consistent with your investing at least monthly.

[Anca]

Since you are in debt, I would strongly suggest attacking that first. Debt is the biggest wealth killer. Depending on your monthly expenses, you could live on bare minimum (maybe 1,500/mo) and put the rest toward debt.

You could have it paid off in 2 years.

If your take home is 8,750 after taxes every 2 weeks, subtract 750 from that, and the rest on debt (8k every 2 weeks) that makes 208,000 in a year towards debt.

Imagine having no payments and investing that into retirement. Make sure you have a good financial advisor.

You can do before and after tax investments. You can also do a backdoor roth considering your income.

You’ll be able to stack up retirement no problem.

[Elizabeth]

Even without a match, you should start maxing out your work pre-tax 401k immediately to save on taxes.

If you have an HSA available, max that out as well using it as another retirement account.

It isn’t too late for a Backdoor Roth IRA for 2025, so you could also max that immediately and repeat every year.

I recommend Fidelity. Then focus on paying off the debt as fast as possible.

[Andrea]

Put $200 k towards the debt for the next 2 years. Live off of the rest. Then at year 3, put $200k into savings/investments for 7 years and retire early, age 50.

Unless you marry or have kids….

[Andrew]

You have a good income. Live cheap, pay off the loans while maxing out your 401k. Put your 401k money into index funds.

If your work allows Roth, I’d say do that.

[Robert]

Read the book: “The Retirment Miracle” & “The Volatility Shield”
Let me know if you need more.

I’ve been studying this subject for 7 years.

[Erica]

What are your expenses and how much are you paying off on your debt every month? Seems like you’re a dr or lawyer, so seems like your job should have at least something in the way of retirement benefits.

Still, you can open a roth ira and a regular ira without it coming from your employer.

With no rent/mortgage and high income, seems like you should be able to invest aggressively, but you didn’t mention your other living expenses.

[Nicholas]

Have you considered joining the national guard or reserves to have them pay off a big chunk of your debt? I commanded hospitals in the reserves and we routinely enlisted physicians with this goal in mind.

Assuming you are healthy and at least somewhat patriotic this could be an option.

The training for doctor’s is nothing like it is for others.

The military will commission you based upon having an MD.

The other option is to take a job in a hospital that qualifies for debt repayment.

[Stef]

Eliminate that educational debt and you’ll feel much freer.

I know it’s a big number but it’s just one year of gross comp.

[John]

You are a doctor!!! Read some books. The “Millionaire Next Door” put my mind in the right perspective to achieve financial Independence. The “Simple Path to Wealth” started to map it out.

Dave Ramsay’s baby steps could help you greatly!

Do not buy into a high salary at the expense of your overall financial health.

Almost every personal finance book I have read used doctors as examples of people who are horrible with money due to their ego’s!

Good luck!

[Basilone]

If this was me, this is basically what I would do:
Starting now, live on 50k a year or less and pay off all the student debt in 2 years.

When it’s paid off, I’d keep living on 50k and put the rest in a mixture of index funds and bonds/CDs.

Vanguard is a good brokerage company with no fees and low cost ratios, or Schwab is decent too if you want a brick and mortar location you can go to.

When the portfolio was big enough, I’d wipe the whole thing out and pay cash for a house. At this point you’re maybe 45-46 living in a decent house free and clear.

Still use around $50-70k a year for spending money, which is quite a bit to burn every month when you already have a house and zero debt payments.

That would be the time to really learn the specifics of using retirement accounts and portfolio diversification.

At that point you know you are going to retire and it’s just a question of how. Your salary will also likely be higher.

You can continue buying the same mix of stocks and bonds, but add in a few speculative stocks. Buy a rental building or second house and airbnb it when you’re not there.

Buy something fun and collectible like an old car you think will appreciate or a vintage watch or jewelry.

Invest in a small business. Start your own practice. It’s really all downhill after you’re free of debt and rent.

Just don’t ever fall into the monthly payment trap or the “lifestyle” trap.

Always contribute a minimum to your retirement accounts and always buy things that will go up in value and/or produce income.

Write down exactly what you want your retirement to look like, put it up where you can see it and make sure what you do is always moving toward that.

Also, you may get married at some point which will significantly speed up the process.

[Spencer]

Go talk to a fiduciary and don’t ask people who aren’t in your tax bracket or above.

325k on w2 salary is going to get halved by taxes.

You need guidance on income preservation, debt pay down, and tax sheltered investment strategy.

[Josh]

Just live frugally. Not giant house or huge depreciating car and you’re totally fine.

Your income works good for real estate. Accelerated depreciation, so you can keep more of your income.

I would just pay off your student debt on its normal amortization as long as the interest isn’t terrible.

[Cheryl]

I know he’s not everyone’s cup of tea, but Dave Ramsey is a good place to start. It might sound crazy to some that someone on your salary needs to budget – but you do (we all do).

The every dollar app looks good for that. White Coat Investor is another good one (I think it’s a podcast and YouTube).

I’m sure white coat investor was created because physicians are notoriously not as financially independent/secure as they should be for their schooling and salaries.

Student loan debt and lots of delayed gratification during med school and residency can cause lifestyle creep once you’re earning so that you don’t ever get ahead.

You’ve got this! Keep living well below your means and knock out that debt

[Chrissy]

No rent? I would spend the next year working as much over time as possible to max out your earnings and pay off debt.

Then the next year continue to save as much as possible. Within 5 years, you have a million saved and debts paid off.

The only way you are never able to retire is if you allow your lifestyle to inflate with your higher income.

[Cutting]

Another vote for living on a fraction of your income. With no real expenses, you can pay off that debt in two years. Put your existing savings in a HYSA to start.

Once debt is paid off open taxable brokerage account with vanguard, fidelity, whatever.

Buy something that follows the S&P, like SPY or VOO.

[Cutting]

With such a high income and low living expenses. Where is your money going? You need to figure that out first. Sign up for something like monarch that will track all money coming in and all money going out.

Then you can see where you need to cut back.

Take advantage of not having high expenses. Live off a very minimal amount.

Normally I would suggest paying off debt first, but your student loan interest is quite low.

I would prioritize investing now that the market is down. Do you have plans for owning a home?

You could also set aside funds for that. But right now, set an allowance to live off of and save/invest the rest.

[Author]

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