Saving for a rainy day

How to recession-proof your retirement nest egg

Deanah Jibril, DO, MS, MBA, shares strategies that physicians can employ to help them prepare for a possible recession.


Should you be worried? In the past year, interest rates have soared, home prices have gone up, job numbers show high levels of employment and health care companies such as Aetna and CVS are reporting profits again after COVID per Beckers Healthcare Payor Report.

At the same time, the costs of food and goods have risen sharply. The probability of the U.S. entering a recession this summer is currently 61-67%, according to YCharts. Inflation happens when the prices of goods and services outpace salaries, and we can purchase less for our money until salaries rise again. Recession follows as growth in the economy is reduced.

Your net worth will mostly be a combination of savings, retirement account income, individual investments and your home. Many physicians have their retirement assets tied up in their homes and 401(k) shared retirement plans as employed physicians. But are these the safest ways to fight inflation and stabilize earnings? How can we create a plan to ride out a recession?

In my experience and in my MBA courses, I learned only a few strategies that really pay off and they should keep building from the beginning of your career. In tough financial times, having a savings plan that takes advantage of accruing interest and early loan repayment can help stave off spending money on unneeded interest and keep inflation at bay. However, it is important to keep in mind that this is not a substitute for qualified financial advice, and each unique situation is different.

Savings strategies

Early on, many of us are paying off our student loans. While this is necessary, it is also wise to save a little money each month. Any initial investment amount, even $50, will have a tremendous compounding benefit during your career. Websites such as and can give you an idea of what long-term investments can develop into. This concept of the time-value of money is a realistic way to see how saving that $50 has many possible outcomes in long-term value.

According to the Social Security Administration’s retirement benefits calculator, you can see what your expected monthly benefit will be at retirement (the maximum Social Security payment was $3,148 per month in 2021) and plan accordingly. At my early financial planning sessions with a certified financial planner, I was shown how a small steady investment will produce results. To keep my desired standard of living at retirement, it was estimated that I will need to have about $2 million in assets to retire at 65, and this amount will only increase with inflation.

Paying off your car is another useful strategy. In most cases, paying interest on car loans and credit card balances is best avoided. When you remove the interest paid on your car, you also potentially gain the compounding of the savings. This has a wonderful effect on your bottom line over time, as many car payments mostly go toward accrued interest and are just lost to us. Even making one extra payment per year can produce significant long-term savings.

Wall Street

When we finally have a little cash in our pockets, many of us like to play the stock markets almost like day traders. The win of short-term gains can be alluring. However, just like playing the odds in Vegas, the house is going to win a portion of the time with this strategy. The key here is to treat it like gambling and set a limit for this type of activity. Also, learn how to use “insurance” like using calls and stop losses on your trades and minimizing the cost per trade. To keep more of your money, use companies that have low-cost investment prices per trade as opposed to large firms.

When considering strategies for keeping your retirement savings stable, the easiest way to consider your position is to put it in terms of risk. It also depends on how much time you have to recoup any loss. Due to the compounding effect, the time-value of money swings in everyone’s favor in a fairly balanced portfolio of stock, real estate, bonds, gold and CDs over your whole career. Being well-diversified can help beat a market rate drop and increased inflationary pressure as short-term potential losses are balanced with steady gains over time.


Inflation and recession can impact stocks and funds. You can use fund managers and investment advisors to allocate your funds into high, medium or low-risk Morningstar fund categories. They charge 1-3% of your portfolio’s value to manage it, but they don’t have a crystal ball any more than you do. So, choose several fund groups in differing markets. Where it can get tricky is when you have less than 15 years to refill the coffers if the stock market falls.

Bonds used to be an easy, safe bet to reduce risk, but now they return so little for the use of your money. While its price fluctuates from week to week, gold has generally been selling at a near record high recently, meaning it’s not a good time to buy. In fact, you probably should be considering selling off your gold unless you are getting ready for the apocalypse.

Real estate can be profitable even if the interest rates are high at this time. If you feel like your area has steady price growth over time, you can purchase and then you can refinance to a lower interest rate in a few years, as your appreciated value should outpace the interest rate. Owning your own office building can be profitable if you can build it with space for a tenant and can afford the mortgage if they move out. Joint ventures with hospitals or surgery centers can also be profitable, but be sure to read the fine print; be aware that returns may not be guaranteed, and money loss is possible.

In a nutshell

So, look at your time in the market, whether it be 10, 20 or even 30 years, and look at your tolerance for risk. Look at “insurance” in your business contracts, and, if possible, limit the downside loss. Spread out your investments so that there is room for market variation. Reduce the amount of interest you pay on home and auto loans as much as you can.

Conservative action will probably accrue a 5.5-11% historical gain as reported by Fisher Investments 2023 Stock Market Outlook. Compounded over time, this will be a nice nest egg despite inflation or recession. If you need more than that, be prepared for significant risk and market variance. Otherwise, you may need to work a second job or work until 70 to stretch out your savings as long as possible. Recessions end eventually; hopefully your strategy can win out over inflation.

For more guidance on money and medical school, see the AOA’s financial planning resources. AOA members can receive discounts on certain financial services from Student Loan Professor (formerly Doctors Without Quarters) and SoFi.

Editor’s note: The views expressed in this article are the author’s own and do not necessarily represent the views of The DO or the AOA.

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