Doctored Money Blog

Some Rank List Advice: Residency is a Job

Rank Your Job

It is a new year, and with every new year comes a new group of fourth year medical students laboring over their residency rank lists. This post isn’t meant as extensive commentary on that topic or to debate whether or not the match system is beneficial. You can find countless discussions on how to set up your rank list and the match system itself. We intend to give a slightly different perspective, one which you are unlikely to get from your medical school attendings, and mentors: residency is a job, and you should not ignore the employer-employee aspects of residency when making your list.

You are going to be an employee, the hospital you will work at will be your employer, and your residency position will be your job. If you look at your rank list through that lens, as opposed to strictly an “academic” one, how would you rank the programs you interviewed at? Which place would provide you with the best job?

Of course we understand that a residency is more than a job. Your selection needs to further your career goals, and you need to get along really well with the other residents (because of course you can really determine that from that one social you attended before your interview). Also, we know that you could have a great ‘job’ from a numbers perspective and be totally miserable. We are just trying to offer some additional factors that you might not have considered, or that others have told you don't matter as much as we think they should.


What is Your Salary?

To start off, let’s talk about the major issue when choosing a job:  your salary. And more importantly your salary compared to your cost of living. The question we want you to answer is: “Can I really afford to live as a resident near this new job?” And remember when your new employer tells you your salary, that is not the amount of money you will be taking home, but rather your pretax salary. What you actually take home will be lower, and in some cases much lower, than you imagined. You can get a rough estimate of how much money you will take home each paycheck on this website.

You need to ask yourself whether your paycheck will be able to cover your living expenses. A $55,000 salary in Albuquerque, NM is going to go much further than $65,000 in NYC. Figuring out how you are going to live is going to involve crunching some numbers, making a prospective budget, and being honest with yourself. Take a little bit of time and figure it out. It might change how your rank your future job.


A Tale of Two Cities

Here is a brief example comparing two different salaries in two different cities. These are actual intern salaries from Washington State and NYC. Using the new 2018 tax law, an intern in WA with a salary of $55,000 will pay a total of $9,600 in social security, medicare, state and federal income taxes. (In case you are wondering, Washington state has no state income tax.) That intern’s take-home pay, after-tax, will be $45,000. In contrast, an intern in NYC with a salary of $64,000 will pay a total of $16,800 in taxes, leading to an after-tax take-home pay of $47,200. Additionally, a resident in NYC seeking PSLF will have higher student loan payments (assuming an income driven plan and shooting for PSLF) because of the higher salary, around $900 per year.

The main point of the example is that the differing taxes make the salaries essentially the same. And that does not even begin to factor in cost of living. We’re not saying you shouldn’t live in NYC; we’re just pointing out that gross salaries can be deceiving.   


What are Your Benefits?

The next main area to consider, is what will your benefits be as an employee of Hospital X? Are you eligible for an employer savings plan, such as a 401k or 403b? In most (but not all) programs, you will be. Will they match your 401k/403b contributions, which amounts to free money? For anyone who plans to choose an income-driven student loan repayment plan in order to be eligible for Public Service Loan Forgiveness (which should be just about everyone with any substantial student loan debt), an employer savings plan is tremendously valuable. Contributions to a 403b/401k can lower your “adjusted gross income”, and this in turn lowers your minimum required payments on PSLF-eligible repayment plans by 10% of your contributions. In one sense, your contributions “earn” you an extra 10% of loan forgiveness. You’ll best be able to afford to make such contributions by choosing a program where the after-tax salary is high and/or the cost of living is low. This is a powerful way to minimize the impact of your debt, and also to get a head start on saving for the future. It is NOT OK to simply say “I’ll start saving after residency/fellowship”. You are already getting a late start due to medical school, you cannot afford to wait.

What about the cost of health insurance? How much does it cost for your family? Is it good insurance? Is the provided  disability insurance adequate? Life insurance? What other benefits does your future employer offer? Some programs offer paid family leave for new babies, or to take care of a family member with a serious illness. In NYC paid leave is now mandatory, for example. Some programs provide a daily lunch, and sometimes also breakfast and dinner. Other programs don’t feed you at all. Over 3-5 years, the cost of daily meals can really add up! You should not feel afraid to ask these questions, and, your future employer is required by the ACGME to supply you with this information. If you talk to people and no one can seem to give you a straightforward answer, we would say that is a red flag. You don’t want to be treated as a note-writing machine but rather a real human being who has needs outside of documenting whether or not your patient has pooped and peed in the past 24 hours.


What is Your Vacation?

How much vacation will you get? Do you get holidays off? Is there a culture where fellow residents cover for you so that you can take a sick or personal day? You may assume that this is all the same across programs, but it certainly is not. We know of an ED program that makes residents make up their sick days so they don’t “lose out on educational time.” Interpret that how you wish. And don’t just say “I don’t really need lots of vacation because I am a hard worker.” Everyone in medicine is a hard worker. But when you work 6 days a week and many days are at least 14 hours long, you need time off and you deserve it. Don’t let an employer “Stockholm you” into thinking you need to be at the hospital because “no one else can do what you do.” That is emotional manipulation. Don’t do it to yourself. Make sure you know whether programs give you vacation and how they treat your time off. Burnout is a very real problem in residencies and medicine in general, and no one is automatically immune.


Remember: Residency is a Job

There are many other criteria for a “good job”, and it’s different for everyone. Remember that even though medicine might be a calling for you, it is also the mechanism by which you will pay for food, education, housing, retirement, leisure, etc for you and your family. I.e. it’s still just a job. And you will be a much happier person in the long run if you remember there are realities in life that you need to be aware of, and your salary and benefits as a resident are just a couple of them.

So as your start to sleep with your rank list under your pillow, be sure to consider the financial impact your new job will have on your life. You owe it to yourself.


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