By Timothy Ulbrich, PharmD
Becoming a seven-figure pharmacist is not a fantasy. It’s a formula.
For new practitioners wondering if financial freedom is possible before the traditional retirement age, here’s the good news: With intentional planning, a solid game plan, and a bit of delayed gratification, yes, becoming a seven-figure pharmacist by age 40 is within reach.
Let’s walk through a step-by-step approach of how a pharmacist can build $1 million by age 40.
Before I get too far into the weeds, it’s important to note that some choose to work through these steps sequentially, completing one before moving on to another, whereas others work on multiple steps at the same time. There is no one right path, and which path you choose comes down to several factors unique to your situation.
Step 1: Emergency fund
For many new grads, the gorilla in the room is student loan debt. But first I have to take care of the basics. And that starts with the emergency fund to protect your plan from when, not if, an emergency expense comes up.
For an emergency fund, the target is generally 3 to 6 months of essential expenses (housing, food, transportation, clothing, minimum debt payments, etc.) saved in an account that you can use to cover unexpected bills. My preference is to put this in a high-yield savings account that is separate from your everyday checking account but still liquid for when you need it.
If your student loans are screaming for your attention and your timeline to save 3 to 6 months for an emergency fund is going to cramp your style, get at least 1 month of savings and then make a commitment to come back to fill up the tank later.
Step 2: Eliminating high-interest rate credit card debt
Once you establish at least the beginnings of an emergency fund, you need to aggressively attack (beyond the minimum payment) any revolving credit card debt (the kind earning 20% or more interest).
There’s no point paying down lower interest debt (such as student loans) or investing when you have debt this high. Your best bet—from both a math perspective but also for the sake of building a good credit score—is to knock this out quickly.
In order to build this foundation, you’re going to have to adopt the most basic of basic principles of a financial plan: living off less than you make so you can allocate the difference to your goals.
Step 3: Take the employer match
Say it with me: “Free money!” Most employers offer what’s known as a “match” within your 401(k) or 403(b). A pretty standard arrangement would be a “dollar for dollar” match up to 4%; meaning that you put in 4% of your salary and your employer would do the same. You’re allowed to contribute above and beyond the match (up to $23,500 in 2025), but at a minimum, you should be putting in as much as is needed to maximize your employer match.
This step is all about early momentum with your investments and squeezing as much as you can out of your early years of investing so time value of money and compound interest can work its magic. When I talk about becoming a seven-figure pharmacist, these early savings will form the foundation for how that math is possible.
Step 4: Decision time
OK, so you have an emergency fund in place, no high-interest consumer debt, and the start of your investing. Do you see the momentum you are building? Now, it’s decision time.
Up until this point, it’s been a pretty vanilla plan that applies to most situations. But this is where the fun begins. You may ask: “Should I pay off the student loans?” “Should I invest?” “Should I focus on other goals like a home purchase?” “More than one of these?”
It depends on a whole host of factors including, but not limited to, the following:
● What is the makeup of the student loan debt (private vs. federal, interest rate, total balance due, etc.)?
● How do you feel about the student loan debt?
● How aggressive or conservative will you be in your investing approach?
● How urgent is the home purchase?
Steps 1 to 3 were all about building a solid foundation, and now that you’ve done that, you can start to play offense with the financial plan. The blessing and curse of that position is that you have options. In most, not all, cases you’re going to balance multiple goals at the same time.
Step 5: Boost up investments
At some point (largely dependent on how you approach the decision points in step 4), you need to boost up your investing plan beyond the employer match in step 3. And this is where we begin to see your pathway unfold to becoming a seven-figure pharmacist.
While you have several investing vehicles to consider, the most common ones used are:
● Maxing out your employer-sponsored 401(k) or 403(b) up to $23,500 per year in 2025.
● Contributing up to $7,000 per year in a traditional or Roth IRA.
● Saving in a brokerage investment account (no maximum limits).
Regardless of what account works best for your situation, this is where the math gets exciting. So, assuming you are a new grad in your mid-20s, it’s a 15-year savings timeline. Assuming a 7% annual rate of return (actual performance may vary due to market performance and advisory and related fees) and saving at least $3,317 per month, based on historical returns, may yield $1 million or more.
Is it realistic to save $3,317 per month (or $39,804 per year)? Yes, I think it is. And in fact, many pharmacists have done it. It requires a 30% savings rate of gross income, which is not outside the realm of possibility.
Here’s one example of the math to get there:
● $130,000 salary with a 4% employer match = $10,400 ($5,200 from the employee and $5,200 from the employer).
● $18,300 additional tax deferred contribution from the employee to max out the 401(k) or 403(b).
● $7,000 to max out the Roth IRA.
● $4,104 contribution to a brokerage account.
Now, while getting to $1 million of savings is pretty cool by itself, check this out. The “Rule of 72” is a way to estimate how long it would take for an investment to double. With an assumed 7% annual rate of return, that timeline to double is about 10 years.
So, without any additional contributions, the “Rule of 72” shows us the $1 million by 40 will turn into $2 million at 50 and $4 million at 60. That’s the power of time value of money and saving early in your career to maximize compound interest.
The core principles
This playbook I outlined isn’t rigid. Rather, it’s a flexible model grounded in three essential principles:
1. Live on less than you make: Avoid lifestyle inflation. Just because you’re earning six figures doesn’t mean you should spend like it. Automate savings and control discretionary spending.
2. Eliminate bad debt fast: High-interest rate credit card debt is the quintessential “bad debt.” Attack this debt early to avoid carrying balances that are like a gnat that won’t leave you alone. Nothing kills momentum like 20% interest.
3. Invest early and consistently: Take full advantage of tax-advantaged retirement accounts. Compound interest is your best friend when you start early.
Your Financial Pharmacist helps pharmacists like you design a personalized financial strategy; whether it’s paying off loans, buying a home, or building wealth. Learn more at yourfinancialpharmacist.com.
Timothy Ulbrich, PharmD, is a cofounder and CEO of Your Financial Pharmacist (YFP). Founded in 2015, YFP is on a mission to help pharmacists achieve financial freedom through fee-only, virtual comprehensive financial planning services, and various free resources.
Disclaimer: The information in this article is provided to you for your informational purposes only and is not intended to provide, and should not be relied on for, investment or any other advice. Read our full disclaimer here.