Budgeting Fall 2018 Investing

When Can I Retire? Case Study: Nola, MD

My first case study is a friend from college. She graduated with no debt from college due to an academic scholarship and generous parents.  By the end of medical school and residency, she had about $200,000 in student debt.  This brings us to now, almost 3 years after entering practice as a physician.

Current Spending: (estimates as she does not track her spending)
$2,500/mon on rent and utilities
$2,000/mon student loans
$400/mon eating out
$400/mon shopping
$450/mon travelling (couple trips a year)
Total spending: $5750/mon
Annual: $69,000 (65.7%)

$3,000/mon (toward a down payment for a home)
Total saving: $3,000/mon
Annual: $36,000 (34.3%)
Assets: $100,000 in cash/savings

Has not given much to retirement.
Does not contribute to her 401k (expresses a desire but is not quite sure how to sign-up). Thinks there is a 5% match!
Knows that there was some automatic retirement contributions made during her residency years but is unsure how to access this information.
Her financial and lifestyle goals:
Pay off her student loan debt.
Buy a house between now and Oct 2018 with a $100,000 down payment.
Pay off house to minimize total interest paid.
Whenever she does retire, the Caribbean sounds nice.


At her current spending: $69,000/mon x 25 (using the rule of 4%) = $1,725,000 needed to retire
Using the Calculator, at her current savings, an compound interest rate of 6%:  Nola can retire in 21 years.


If Nola, were to spend like a resident ($45,000/yr net avg while in residency) and save the rest, her projected retirement using the variables above would be in:  12 years 
Annual spending: $45,000/yr
Amount needed to retire using 4% rule: $1,125,000
Annual savings: 105,000 – 45,000 = $60,000/yr

  • Consider tracking spending with a helpful tool like Personal Capital.
  • Speak to HR rep and enroll in 401k. Max out 401k.
  • Make a point to track down information for retirement contributions made during residency.
  • To make a big impact on retirement goals, consider living like a resident, and saving like a physician.
  • Open an investment account like Vanguard or Betterment and initiate auto-deposits.
  • Consider a budget with any number of free budget spreadsheets available.

Either way, with a hefty salary, Nola, age 34 could still leave the workforce before age 65 (traditional retirement) and retire in the Caribbean. If she lived like a resident, she could stand to reach that goal 9 years earlier!
Comment below with your thoughts!


After I did the case study with Nola, she contacted her HR person at her current job and was able to locate information from residency for a 403b. She learned that her employer contributes 5% of her salary after 1 year of work even if she does not contribute! Free money! And she had a balance of $17,000 in her 403b plan from residency which she has rolled over to her 401k. Kudos to NOLA on a job well done! This is one FIRE’d physician! 

Related Content:

Follow/ Like/ Subscribe

In case you missed it...


  1. Buckeyecub says:

    Given that $2000 a month is for student loans I think her projected retirement needs should not include this spending. If she plans to get rid of her loans before retirement they aren’t part of normal spending. Thus her spending of 69k is really 45k if loans not included.
    There was no mention of interest rates on loan or if she was in loan forgiveness plan. She may want to look into resources online such as white coat investor for suggestions on managing med school debt.
    Really great that your case study convinced her to find out about 401k and roll over 403b. As someone who didn’t contribute much in early work years (market down turn didn’t help) I will say that I regret not getting up to the employer match. Hopefully she will not make my mistake with your encouragement.

    1. My Early Retirement Journey says:

      Thanks for stopping by. Yeah, she said she wasn’t not-contributing out of rebellion she just didn’t want to have to be at work any longer than she had to to figure it out. Turns out their employer contributes whether employees do or not. Sweet deal, I’d say!

  2. Really pleased Nola took your advice to check out her residency retirement contributions, she’s now better informed. Living like a student/resident makes a huge difference to her savings rate, even if she split the difference it still shaves 4.5 years off her working time. Worth thinking about

    1. My Early Retirement Journey says:

      Yep…she actually just bought a house too, so she is doing quite well!

Leave a Reply

Your email address will not be published. Required fields are marked *