Employed physicians face a unique set of financial challenges, but a new survey suggests many doctors aren't fully prepared to face those hurdles.
Employed physicians face a unique set of financial challenges, but a new survey suggests many doctors aren’t fully prepared to face those hurdles.
AMA Insurance surveyed 2,000 US doctors ages 30-69 who were employed at group practices, hospitals and medical schools for its 2014 Report on U.S. Physicians’ Financial Preparedness: Segment Focus on Employed Physicians. The survey found that while most view having a comfortable retirement as a top financial goal, nearly half (42%) say they are not where they want to be when it comes to retirement savings.
Eighteen percent of respondents had less than $100,000 saved up for retirement, while 7% had more than $3 million in their retirement accounts. The bulk of doctors were somewhere in between: 26% had $100,000-$500,000; $24% had $500,001-$1 million; and $25% had between $1 million and $3 million saved. Just over half (55%) of physicians age 40 and under had $100,000 saved up. The vast majority (95%) of doctors 56 and older had that amount.
Half of doctors said they believe their profession has “unique or more complicated” financial challenges compared to other professions. Thirty-five percent disagree and 15% weren’t sure. Among the reasons “yes” respondents cited were malpractice liability, medical school debt and the fact that doctors begin their careers later in life.
The study found 57% of employed physicians use a financial adviser to help tackle those challenges. Of the 43% who don’t, 45% said it was because they had difficulty finding an adviser they can trust.
“We see clearly from report findings that spending more time and/or working with a professional adviser to understand options and manage the full extent of their finances can be vital to (employed physicians’) professional health,” said Alfred C. Drowne, vice president and general manager of AMA Insurance, which is a wholly owned subsidiary of the American Medical Association.
One topic Drowne says doctors should discuss with an adviser is insurance. Nearly half of employed physicians have their disability premiums paid by their employers, but Drowne notes that any benefit they are paid could be taxable and thus may not be adequate.
The majority of employers also offer malpractice and life insurance, the survey found.
Employed doctors also listed long-term care as a financial concern. Two-thirds said they plan to use long-term care insurance or self-fund long-term care. The remaining third said they are unsure how they’ll fund their long-term care.