Over the past few years, I’ve noticed a new type of question emerging from fourth-year medical students in the personal finance program that I co-direct. Just before race day they come to me, with a spreadsheet in hand, and ask:
“Should I rank higher the program that offers a retirement match?”
It’s a good question, and not one I ever thought about when I was applying for residency. At the time, an employer pension match for residents or fellows was virtually unheard of. But in recent years there has been a slow but noticeable shift. I’m not aware of any national data tracking how many residency and fellowship programs now offer a retirement match, but anecdotally the number appears to be growing. Yet these programs are still a clear minority.
As someone who spends a lot of time thinking about financial wellness in medicine, I wanted to understand the true value of a retirement match. So I ran the numbers.
The financial power of an early game
Let’s say your residency offers a 10% employer match on your salary. That may not sound like much — after all, PGY-1s earn about $67,000 a year — but small contributions made early can grow dramatically over time.
Suppose a resident earns €67,000 annually and receives a 10% employer match during training. What is that worth when you retire?
Using current salary data for AAMC residents and colleagues and conservative assumptions, I modeled the future value of those employer contributions at age 67. All figures are adjusted for inflation and presented in 2025 dollars, using real investment returns (after inflation) of 3%, 5% and 7%. I looked at training programs of three, five and seven years. The results are shown in the image below:
As you can see:
- A three-year residency match will grow to $132,375 with a 5% real rate of return at retirement.
- A five-year residency/fellowship match will grow to $219,869.
- A seven-year training program would earn $305,752.
- At a real rate of return of 7%, the value of a seven-year match exceeds $600,000.
- If the resident also contributes 10% of their salary and receives the full match, the combined total could exceed $1.2 million.
That’s a serious head start when it comes to retirement savings, especially when it comes to money you don’t even have to earn yourself.
More information here:
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Use Roth contributions to maximize value
Most residents are in the lowest tax bracket they will ever see in their careers. That’s why employer-sponsored Roth retirement plans (such as Roth 403(b)s or Roth 401(k)s) are especially valuable during training.
If you have access to a Roth plan and your institution offers a match, now is the perfect time to take advantage. Not only will you get the match, but your out-of-pocket contributions will become tax-free for decades. Even if you can only contribute a few thousand dollars a year, the long-term impact is significant.
Think of it this way: a dollar saved in a Roth account during your stay can be worth much more than a dollar saved later as a guest.
Should you choose a residence based on a pension match?
Now the big question: Should a retirement match affect how you rank programs?
My take: All else being equal, go with the program that offers a match. But of course, all else is rarely equal.
As a fellowship program director, I would strongly encourage students to keep the bigger picture in mind. The quality of the training, alignment with your long-term goals, culture and location (especially proximity to family or a support system) are much more important in the long run. A strong program that sets you up for a fulfilling and well-compensated career will more than make up for any missed employer match during your residency.
That said, the match do matter. And it’s not just about the money. Offering a retirement match signals that a program views its interns as true employees, that they deserve the same benefits as participants and staff.
More information here:
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Beyond the dollars: behavioral benefits are also important
Importantly, the impact of offering a match extends beyond the dollars saved. It encourages earlier participation in retirement savings, strengthens long-term investment habits and allows residents to gain market experience while the stakes are relatively low. These early lessons – compounding costs, dollar cost averaging, staying the course – are powerful. And while these behavioral benefits are not captured in the financial models above, they likely significantly increase the overall value of retirement matching programs.
The bottom line
I hope that one day we will reach a point where all residents and fellows are offered the same retirement benefits as their supervising physicians. The costs to institutions are relatively modest, but the longer-term benefit to trainees is enormous.
Until then, if you’re a medical student reviewing your rankings — or a resident advising those who come after you — know that a retirement match during training is more than just a perk. It’s much more valuable than a better calling room, free meals or premium parking. That said, it should still take a back seat to the quality of education, mentorship, and clinical experience a program provides.
In the hierarchy of residency benefits, a retirement match is one of the few no-obligation investments that your future self will thank you for – time and time again.
What do you think? Have you been offered a pension match during your stay? How did this affect where you went to train? How much could this have affected your financial journey?
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