What Should I Do First? A Complete Step-By-Step Guide For Optometrists
Personal finance is called personal for a reason. Like prescribing glasses, it involves both science and judgment. For many optometrists, the hardest part is not identifying their financial goals, but deciding which one to tackle first.
Should you pay off student loans, eliminate high-interest debt, build an emergency fund, maximize retirement accounts, invest, fund a 529 or Trump Account, buy a practice, or save for real estate?
Generic “baby steps” rarely work for everyone. A new graduate with heavy student debt will have different priorities from an established practice owner nearing retirement. Parents must also weigh newer options, including Trump Accounts, alongside 529 plans, custodial accounts, and Roth IRAs.
This article provides a flexible 2026 framework to help you prioritize your goals based on taxes, interest rates, opportunity cost, risk tolerance, family needs, and your own attitude toward debt.
(1) Think in Terms of Goals
Before deciding what to do with your money, take time to define your personal financial goals.
Do you want to pay off your student loans within one to five years, or are you comfortable carrying them for a decade? Do you plan to buy a home, open a private practice, or start a family soon? Are you hoping to retire well before age 65 or help support aging parents?
Everyone’s priorities are different, but most doctors should consider these eight core financial goals:
Your financial goals should be motivating and emotional. They should remind you why you tolerate the long commute, calmly handle the difficult patient, and ask, “One or two, which is clearer?” day after day.
The goal is not simply to accumulate money. Few people dream of seeing a particular number in a bank account. What matters is what that money allows you to do—gain freedom, support your family, retire earlier, build a practice, travel, or create a more meaningful life.
(2) Multi-task Different Priorities
There is real power in focusing intensely on one financial goal, such as aggressively paying off student loans or saving for a home. However, just as you once balanced binocular vision and ocular disease finals, you can pursue multiple financial priorities at the same time.
Delaying retirement contributions for five or ten years while paying off student loans can sacrifice valuable years of compound growth. At a minimum, contribute enough to receive your employer’s full 401(k) or retirement-plan match. A 6% match is part of your compensation, and failing to claim it means leaving free money on the table.
(3) Assess your Own Risk Tolerance and Attitude Toward Debt.
Your strategy should reflect your personal tolerance for risk and debt. If debt causes you stress or you prefer more certainty, prioritize paying it down. If you are comfortable carrying manageable debt and accepting market volatility, you may choose to direct more toward long-term investing.
For example, paying off a student loan at 6.8% provides a guaranteed return equal to the interest avoided. An S&P 500 index fund may offer higher long-term growth potential, but those returns are never guaranteed and can vary significantly from year to year.
There is no perfect answer for everyone. The right balance depends on your interest rates, time horizon, financial goals, and ability to stay invested during market downturns.
“Dat and Aaron, Can You Just Tell Me Where to Start?”
Step-by-Step Guidelines
The following is a general order of financial priorities to help you get started. Adjust it based on your income, debt, family needs, risk tolerance, and personal goals.
(1) Build an Emergency Fund
Save at least three to six months of essential expenses, not three to six months of income. Practice owners, independent contractors, and households with variable income may need a larger reserve.
(2) Contribute to any main workplace tax-protected retirement up to the Employer's Match
Contribute enough to your workplace retirement plan to receive the entire employer match.
Examples include a 401(k), 403(b), or SIMPLE IRA. Your employer match is part of your compensation, so do not leave it on the table.
(3) Eliminate High-Interest Debt (greater than 8%)
Aggressively pay off debt with interest rates generally above 8%, including:
- Credit card balances
- High-interest personal loans
- Expensive auto loans
Paying off a credit card charging 20% or more provides a powerful guaranteed return through avoided interest.
(4) Invest at Least 10% Toward Retirement and then ideally 20-25% once you are done with all non-mortgage debt
Begin investing at least 10% of your gross income toward retirement while continuing to pay down debt. Gradually work toward investing 20% to 25% once your non-mortgage debt is under control.
Use tax-advantaged accounts first, including a workplace retirement plan and a Roth IRA or backdoor Roth IRA, when appropriate.
- Ex: Assuming $120,000 salary, you should be able to fund 5% toward your Roth-IRA at least and work toward funding another 10% to your workplace 401K or other major IRA like SEP/SIMPLE. This is while paying off your student loans.
(5) Aggressively pay off all non-mortgage debt between 5-7%. This should include most of your student loans of 6.8%
Focus on non-mortgage debt charging approximately 5% to 8%, which may include student loans, auto loans, and other personal debt.
A student loan at 6.8% deserves greater urgency than a loan refinanced to 3-4%. However, even low-rate student debt may be worth eliminating if the balance limits your ability to buy a home, open a practice, or achieve peace of mind.
(6) Maximize Your Tax-Advantaged Retirement Accounts
For 2026, the employee contribution limit for most 401(k), 403(b), and governmental 457 plans is $24,500. The combined annual limit for traditional and Roth IRA contributions is $7,500, subject to income and eligibility rules.
Practice owners may also have access to a SEP IRA, SIMPLE IRA, solo 401(k), cash-balance plan, or profit-sharing plan. The best option depends on your income, employees, and practice structure.
Continue working toward a total retirement savings rate of approximately 20% to 25% of gross income. Consider a spousal IRA when one spouse has little or no earned income.
(7) Maximize a Health Savings Account (HSA)
When covered by an eligible high-deductible health plan, consider funding an HSA. The 2026 contribution limits are:
- $4,400 for self-only coverage
- $8,750 for family coverage
- An additional $1,000 catch-up contribution beginning at age 55
HSAs offer valuable tax benefits and can also function as a long-term healthcare and retirement account.
(8) Invest in a Taxable Brokerage (long-term capital gain tax of ~15%= No Limits) for short-term financial goals (<5 years) or fund additional retirement goals.
Save for goals such as a home down payment, practice purchase, business expansion, or major family expense.
Money needed within approximately five years generally should not be invested entirely in the stock market. Consider safer options such as:
- High-yield savings accounts
- Money-market funds
- Treasury bills
- Certificates of deposit
- Short-term bonds
The shorter your timeline, the less investment risk you should take.
- Example: Saving for a down payment on house (if applicable to your situation, with a goal of 10-20% down home payment)
(9) Invest for Your Children
Once your own financial foundation and retirement savings are on track, consider accounts designed to build wealth for your children.
A 529 plan is generally best suited for qualified education expenses. A Trump Account may provide another long-term option. In 2026, eligible contributors may generally contribute up to $5,000 per child annually, and eligible U.S.-citizen children born from January 1, 2025, through December 31, 2028, may qualify for the federal government’s $1,000 pilot contribution.
The right choice may include a combination of:
- A 529 education plan
- A Trump Account
- A custodial brokerage account
- A Roth IRA once the child has legitimate earned income
Do not sacrifice your own retirement security solely to fund your children’s accounts.
(10) Invest Additional Money in a Taxable Brokerage Account and/or Consider Real Estate and Practice Ownership
After maximizing your priority tax-advantaged accounts, invest additional long-term funds through a taxable brokerage account.
Low-cost, diversified index funds may be appropriate for goals more than five years away, early retirement, or building wealth beyond traditional retirement accounts.
Additional capital may be invested in:
- Rental real estate
- Commercial property
- Private practice ownership
- Practice expansion
- Other businesses or income-producing assets
These investments can create wealth but require greater concentration, liquidity, and operational risk than a diversified index fund.
(11) Pay off loans with 3-5%, which includes most house mortgages or practice business loans.
Once your investment and savings goals are on track, consider accelerating repayment of debt charging approximately 3% to 5%, including certain mortgages and practice loans.
The mathematical benefit may be smaller, but reducing debt can improve cash flow and decrease financial stress.
(12) Eliminate Remaining Debt (<3%) Before Financial Independence
Debt below 3% may not require immediate repayment, particularly when the funds can earn more elsewhere. However, many doctors prefer to eliminate remaining mortgages and business loans as they approach retirement or financial independence.
Your goal does not have to be maximizing every dollar. It should be creating a financial life that provides both security and freedom.
(13) Enjoy the Life You Worked Hard to Build
Spend intentionally, travel, support the people you love, and give generously.
The purpose of building wealth is not simply to accumulate the largest account balance. It is to create the freedom, experiences, and impact that make all your hard work worthwhile.
Summary
We advise most doctors to avoid carrying debt, including a mortgage, into retirement. Once your employment income ends, monthly debt obligations can create unnecessary financial risk and reduce flexibility.
However, this is only a guideline. It is perfectly reasonable to prioritize student loans if you dislike debt, or to focus first on retirement, a home down payment, or another major goal. Your priorities may also change over time. One year, you may aggressively pay down debt; the next, you may invest more heavily for retirement.
Rigid, one-size-fits-all “baby steps” rarely work for everyone. A new graduate with significant student loans and credit card debt will have different priorities from an established OD approaching retirement.
The following 2026 financial guideline is designed to help you evaluate your options and create a plan that reflects your income, goals, risk tolerance, and attitude toward debt.
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Wonderful summary. Thanks for sharing.