How Much Residents & Fellows Should Save for the Transition Period

Transition Planning for Physicians

Transition planning involves preparing for the financial and lifestyle changes that take place as you transition from training to practice. This is a time period when a lot of new decisions need to be made. If you haven’t read part one of our two part Transitioning from Training to Practice blog segment for physicians, click here to catch up.

As mentioned in part one of this segment, all financial considerations for physicians transition to practice require cash.

How much should you save for your transition period? Based on our experience, we’ve worked with physicians who may need anywhere from $5,000 – $40,000.

Here is a breakdown of we suggest such a large transition period cost:

Typical Transition Period Buffer: $5,000 – $15,000

  • Not relocating
  • Single or married without children
  • 1 – 2 months max without pay
  • Able to stick with budget

Typical Transition Period Scenario:

Congratulations! You have just taken a job at a private practice in Charleston. Your new position starts August 1. You finish training on June 20, and have enough savings to stay afloat for the end of June and the month of July.  Unfortunately, your new practice pays monthly, and so you won’t receive your first paycheck until September 1. Now you are left using your credit card or borrowing money from your family until you get paid, even though you’ve already begun working. The earlier you can start planning for your transition period, the less negative impact it will have on your financial health.

Less Typical Transition Period Buffer: $15,000 – $40,000+

  • Engagement Ring
  • Wedding
  • Honeymoon
  • Vacation
  • Relocating
  • 2+ months without pay

The unpaid time between training and practice is probably the one area of planning that catches most residents and fellows off guard.

3 Steps to Guide you Through a Healthy Financial Transition

Saving for Physician Transition

Cover/Thumbnail photo from Op-Med | CRN202006-232311



John Dameron

John Dameron | Financial Planner and Partner with Spaugh Dameron Tenny since 2002. Through a long-standing relationship with Atrium Healthcare, John created a lecture series called Physcians Financial Focus, authored a book call The Residents Survival Guide and has coached hundreds and hundreds of physicians from residency and fellowship into practice. Interesting fun fact about John is that he’s one of 7 kids, has 3 boys of his own (plus one more on the way) and love hunting and grilling meat.