How to judge physician net worth by age against your spending

Step 1: Set the online averages beside two better tests

Gather the age-based benchmark you found and the income formula, then ask three questions: does the measure use your spending, how does it treat debt, and is it fair to someone who saved late? Median-by-age surveys mix specialties and regions. They ignore spending, and they treat a PSLF-eligible loan like a mortgage that must be repaid in full.

The familiar age-times-income-divided-by-10 formula gives a doctor age 38 earning $400,000 a target of 38 × $400,000 ÷ 10 = $1.52 million. That number punishes a high earner who spent years in training, and it never asks what the person spends. Years of spending saved uses your own budget and discounts pre-tax accounts to account for taxes on future income draws.

The table compares each yardstick against the same three tests. A spending-based count is the only one that uses your budget; the trade-off is that you must choose and consistently apply a tax assumption.

Step 2: Pull the numbers in February, once the statements arrive

Gather the same records each February, once every year-end statement is in hand. W-2s and 1099-Rs generally arrive by January 31, and year-end 403(b) and 457(b) statements arrive in January. Put April 15 on the calendar for prior-year IRA and HSA contributions; fall open enrollment resets benefit choices and deferral elections. December 31 is the last payroll date that counts toward that year's 403(b) and 457(b) deferrals.

Use the year-end account statements, your loan balance and PSLF payment count from studentaid.gov, plus three months of bank statements. Include the loan payment when measuring monthly spending. A quarterly statement from June one year and a December statement the next will make a false trend. Compare like with like.

Step 3: Write the test down in plain words

Add investable savings and reduce pre-tax balances by an assumed tax rate on future income draws. Divide that total by what you spend each month, and the result is your months covered. Leave out your home equity and cars because neither is ready cash for next month's bills. Keep the rule written beside the spreadsheet, so next February you use the same one.

Put your loan payment in spending, but don’t also subtract the loan balance in this coverage test. That counts the same debt twice. Access also has a clock: 403(b) money generally avoids the 10% early-distribution penalty at age 59½, or age 55 after leaving that employer; governmental 457(b) money generally avoids that penalty after separation. Required minimum distributions start at age 75 for people born in 1960 or later, and Social Security full retirement age is 67 for people born in 1960 or later.

Step 4: Run the test for Reena and a twin who spends less

Reena (hypothetical) is 38, a hospital-employed anesthesiologist married to a public school teacher, with two children under 6. She has a residency-era rollover IRA, about $310,000 in federal loans, $520,000 saved across a 403(b) and 457(b), and four years left toward PSLF. For the simple comparison below, use the $520,000 savings figure and $310,000 loan balance; the rollover IRA is part of the account paperwork to check before making a complete calculation.

Her net worth on those figures is $520,000 − $310,000 = $210,000. Her twin has the same accounts, debt and age, but spends $9,000 each month; Reena spends $12,000, including the loan payment. An age benchmark ranks them the same. The cash-flow calculation does not: $520,000 ÷ $12,000 = 43.3 months for Reena, while $520,000 ÷ $9,000 = 57.8 months for the twin.

Now reduce each pre-tax balance by 25% for taxes, for illustration. $520,000 × 0.75 = $390,000 in spendable savings. Then $390,000 ÷ $12,000 = 32.5 months, and $390,000 ÷ $9,000 = 43.3 months. The same net worth hides a 14.5-month gap before tax and a 10.8-month gap after the assumed tax haircut.

The answer flips at the 25% row if you use that tax assumption: Reena’s coverage is 32.5 months, not the 43.3 months shown before taxes. Each 10-point increase in the assumed tax rate costs her roughly four to five months of coverage.

Step 5: Did the move of RMDs to age 75 change your older projection?

Yes, if you were born in 1960 or later: required minimum distributions now start at age 75, not 72, so an older projection may put forced income draws and their tax effects too early. Federal law also raised the RMD age to 73 for others, requires catch-up contributions to be Roth when prior-year FICA wages exceeded $150,000, and added an $11,250 catch-up at ages 60 to 63. Check the plan’s current rules before changing elections.

Take these questions to the people who can confirm your own paperwork and assumptions:

Step 6: Leave room for a bad market, a disability or a law change

A 30% market drop would take Reena’s $520,000 to $364,000: $520,000 × 0.70 = $364,000. That covers 30.3 months at $12,000 each month, down from 43.3 before the drop. Investments can lose value, and you could get back less than you contributed.

If illness stops her work, the bills do not stop with it. At $12,000 each month, $520,000 lasts about three and a half years before taxes, assuming no investment losses or other income. Tax rates on future income draws could rise, too. Use the 25% and 35% rows as stress tests, not the 0% row as a promise, and keep at least six months of spending in cash so a rough market year does not force a sale.

• What tax rate should I assume on income draws?
• Is my 457(b) governmental or a tax-exempt employer's plan?
• Will my catch-up contributions be forced into Roth?
• Does the projection include my spouse's pension?

Step 7: Does the test belong in February, after the year-end statements?

Yes. Run the calculation in the same month each year, after January statements arrive, and first check whether spending changed. Moving to a riskier investment mix to catch up with an age average before controlling the spending line gets the order backward; a market decline can make that choice hurt more.

Counting 403(b) and 457(b) balances at face value costs nothing this year, but it overstates future coverage for decades. At an assumed 25% tax rate, Reena’s $520,000 is $390,000 after the haircut: 32.5 months at $12,000 each month, not 43.3. Each February, compare the count with last February; if it did not rise, examine spending before changing investments. Annex Wealth Management checks whether spending grew faster than savings before suggesting any portfolio change.

This is a progress check, not a retirement target. Reena’s husband may have a teacher pension, and both may later receive Social Security; those income sources could reduce what savings need to cover. How much is enough to retire is a separate calculation.

Step 8: Hand Annex Wealth Management your February numbers

Talk with Annex Wealth Management if your months-covered count fell or stayed flat between February checks. Bring the year-end 403(b) and 457(b) statements, the studentaid.gov loan summary and three months of bank statements; the review should start with what your spending line says, not an age-based ranking. Meetings happen by video or phone, so your location does not matter. Annex Wealth Management requires at least $500K in investable assets.

• Year-end 403(b) and 457(b) statements
• studentaid.gov loan summary and PSLF count
• Three months of bank statements