You’ve Saved Your First Million: A Doctor’s Guide to What Comes Next

Hitting the million-dollar mark in your retirement savings is a big win! As a doctor, you’ve worked hard to get here. You’ve put in long hours at the hospital, lived through tough training years, and made smart money choices. But now what? Having a million dollars saved doesn’t mean you can stop and coast. It means you have new choices to make. Let’s look at what you should do next to grow your wealth, protect what you’ve built, and enjoy the fruits of your labor.

Keep Up the Good Work – But Review Your Plan

First, give yourself a pat on the back! Saving a million dollars is something many people never achieve. But don’t change your saving habits just yet. The habits that got you here are the same ones that will take you further.

Now is a good time to look at your overall financial plan:

Check your retirement goals: Do you still want to retire at the same age? Do you need more than you first thought?
Run new numbers: With $1 million already saved, how much more do you need to reach your goal?
Adjust your savings rate: Should you keep saving the same amount, or can you ease back a little?

A surgeon I know hit $1 million at age 45. After reviewing her plan, she found she was ahead of schedule. She kept saving but shifted some money toward her kids’ college funds, which had been neglected.

Investment Strategies: Evolution, Not Revolution

With a larger nest egg, you might be tempted to try riskier investments. Be careful! Your first million is often the hardest to earn. Don’t put it at risk chasing bigger returns.

Instead, think about smart changes to your investment approach:

Rebalance your portfolio: Make sure your mix of stocks, bonds, and other investments still fits your goals
Consider slight adjustments: Maybe shift 5-10% of your portfolio to new areas, not a complete overhaul
Review investment fees: With a larger portfolio, you might qualify for lower fees or better services

One emergency room doctor I worked with kept the same basic investment strategy after hitting $1 million. He just moved from higher-fee funds to lower-cost options, saving thousands each year in fees.

Exploring New Investment Options

As an “accredited investor” (someone with $1 million in net worth or high income), you now have access to investments that weren’t available before. These include:

Private equity: Investing in private companies not traded on stock exchanges
Real estate syndications: Joining with other investors to buy larger properties
Venture capital: Funding startup companies
Private debt: Lending money to businesses through private arrangements

These investments might offer higher returns, but they come with more risk and your money is often locked up for years. A good rule is to limit these “alternative investments” to no more than 10-20% of your portfolio when starting out.

A family practice doctor I know put 15% of her portfolio into a medical office building syndication after reaching $1 million. The rest stayed in her regular stock and bond funds.

Protecting What You’ve Built

With more wealth comes more need for protection. Now is the time to make sure you’re covered if something goes wrong:

Umbrella insurance: Get at least $1-2 million in coverage to protect against lawsuits
Disability insurance: Make sure your policy covers your actual income
Life insurance: Review whether you have enough coverage for your family
Property insurance: Check that high-value items are fully covered

A cardiologist friend reached $1 million in investments but had only $300,000 in umbrella coverage. He increased it to $2 million for just a few hundred dollars more per year – cheap protection for his hard-earned wealth.

Tax Planning Becomes More Important

As your wealth grows, so does your tax bill. Smart tax planning can save you thousands of dollars each year:

Max out tax-advantaged accounts: 401(k)s, 403(b)s, HSAs, and backdoor Roth IRAs
Consider a cash balance plan: Some medical practices offer these plans that let you save much more than regular retirement plans
Look at tax-loss harvesting: Selling investments at a loss to offset gains
Municipal bonds: These might make sense now for their tax-free income
Review your investment locations: Keep tax-inefficient investments in retirement accounts

An anesthesiologist I worked with saved over $15,000 in taxes the year after reaching $1 million by maximizing her cash balance plan contributions and moving her dividend-paying stocks to her retirement accounts.

Emergency Funds and Debt Management

Even with $1 million saved, you still need an emergency fund. In fact, you might need a bigger one now:

Maintain 3-6 months of expenses in cash
Consider keeping some money in short-term bonds or CDs for larger emergencies
Review your debt: Does it make sense to pay off your mortgage or student loans faster?

A neurosurgeon couple kept a full year’s expenses in cash and short-term bonds after hitting the million-dollar mark. This gave them peace of mind and let them sleep well during market downturns.

Estate Planning: No Longer Optional

With significant assets, estate planning becomes crucial. Without proper planning, your hard-earned money might not go where you want it to:

Create or update your will
Consider a revocable living trust to avoid probate
Check your beneficiary designations on all accounts
Create advance directives for healthcare decisions
Think about life insurance trusts if your estate might owe taxes

A radiologist put off estate planning for years. After reaching $1 million, she finally created a trust. Just three months later, she was in a serious car accident. Her family was grateful everything was in order during her recovery.

Charitable Giving and Philanthropy

With financial security building, many doctors find joy in giving back:

Donor-advised funds: These let you donate now but decide which charities to support later
Qualified charitable distributions: If you’re over 70½, you can give directly from your IRA
Appreciated stock donations: Save on capital gains taxes by donating stocks instead of cash
Consider a family foundation: For larger giving goals

An oncologist reached $1 million and started a donor-advised fund with $20,000. He adds to it yearly and involves his children in deciding which cancer research programs to support.

Finding Balance: Living Well Without Lifestyle Inflation

Having money saved gives you options, but don’t let lifestyle inflation eat away your progress:

Create a “fun money” account: Set aside some funds specifically for enjoyment
Focus on experiences over things: Research shows experiences bring more lasting happiness
Make thoughtful upgrades: Choose improvements that truly add value to your life
Start a “wants” list: Write down things you want and wait 30 days before buying

A pediatrician and her husband celebrated reaching $1 million by taking their dream trip to New Zealand – something they’d wanted for years. They kept their same cars and home but now take one special trip each year.

Working With Financial Professionals

With more complex finances, professional help often pays for itself:

Consider a fee-only financial advisor: They don’t earn commissions on products they recommend
Work with a tax professional who knows physician issues
Meet with an estate attorney to create proper legal documents
Build a financial team that works together

A dermatologist tried managing her investments herself until she hit $1 million. She then hired a fee-only advisor who specialized in physician finances. The advisor found tax-saving strategies that saved her more than the advisory fee in the first year.

Setting New Goals

Financial goals don’t stop at $1 million. Now is the time to think bigger:

Financial independence: Having enough to work because you want to, not because you have to
Partial retirement: Cutting back to part-time work
Education funding: Fully funding college for children or grandchildren
Legacy planning: Creating lasting impact through philanthropy
New business ventures: Starting a medical-related business or investing in one

An internist set a new goal after reaching $1 million: achieving financial independence by age 55. This would let him continue seeing patients but drop hospital shifts and administrative duties.

Regular Review and Adjustment

Your financial plan isn’t set in stone. Schedule regular reviews:

Annual financial check-ups: Review your overall financial health yearly
Quarterly investment reviews: Make sure your investments are still on track
Tax planning meetings: Meet with your tax advisor before year-end
Life transition planning: Prepare financially for major life changes

A psychiatrist and her spouse review their financial plan every January. After reaching $1 million, they added quarterly check-ins with their financial advisor to stay on top of their more complex situation.

Take Action Now

Don’t let analysis paralysis stop you from moving forward. Here’s what to do this week:

Schedule a portfolio review to ensure your asset allocation still makes sense
Call your insurance agent to review your liability coverage
Make an appointment with an estate planning attorney if you don’t have a will
Set up a separate savings account for your emergency fund if you don’t have one
Check your retirement plan contributions to make sure you’re maximizing tax advantages

Reaching $1 million is a milestone, not the finish line. With the right next steps, you can protect what you’ve built, grow it for the future, and find the balance between saving for tomorrow and living well today. The financial habits that got you here will serve you well going forward – just with a few smart upgrades for your new status as a millionaire physician.

This post is for informational purposes only and does not constitute investment advice. Always conduct thorough research and consult with financial professionals before making investment decisions.

About the Author: Dr. BWMD is a practicing physician and parent who writes about the intersection of medicine and personal finance. When not seeing patients or writing about physician finances, he enjoys spending time with his family and teaching the next generation of medical professionals about the importance of financial wellness.