When people hear the word â€˜doctorâ€™ or â€˜physicianâ€™ they often times automatically assume they are flush with cash. But what many outsiders donâ€™t realize is how strained a physicianâ€™s finances can be, and the unique struggles that they face when it comes to finances and financial planning.
When people hear the word ‘doctor’ or ‘physician’ they often times automatically assume they are flush with cash. But what many outsiders don’t realize is how strained a physician’s finances can be, and the unique struggles that they face when it comes to finances and financial planning.
According to the 2016 Report on U.S. Physicians’ Financial Preparedness, published by AMA Insurance, the average physician after medical school in the United States has between $150,000 to $200,000 in student loan debt. While this isn’t insurmountable for physicians that pay off their loans over time, it can definitely be a challenge when it comes to retirement and financial planning.
We compared the 2013 and 2016 report published by AMA Insurance for trends, and found four crazy stats that can give you a clearer picture of how physicians are doing — and how they feel that they’re doing – financially.
When asked in 2013, around 50% of physicians surveyed felt that they were behind when it came to retirement planning and saving, and only 6% felt that they were ahead of the curve. This has actually improved for physicians in 2016, as the latest report shows that only 39% of physicians reported feeling behind on their retirement planning, and the number that felt they were ahead of schedule bumped up from 6% to 11%. That’s still a significant portion of physicians in the United States that are concerned about retirement, that will need assistance to ensure that they’re saving and planning ahead to enjoy their retirement years.
Saving for Retirement
While we’re still on the topic of saving for retirement, stats from physicians in both reports show that they’re “very concerned” about their ability and trajectory for saving for their retirement. In the 2013 report, between 29% and 55% of physicians (based on age group) stated that this was one of their top financial concerns, and they were worried about saving for retirement. This number decreased slightly, with 16% to 35% expressing concerns about saving for retirement in the 2016 report, but this is still a significant portion of medical professionals with this concern, and the 2016 report shows that 35% of physicians in their 30s have less than $50,000 in savings for retirement.
Financial Planning Knowledge
Along with retirement planning, is general financial planning and personal finance knowledge. Medical professionals are intelligent, educated people, and yet the 2013 and 2016 reports show that many still do not feel competent when it comes to personal finance. In 2013, 74% of physicians felt that they were knowledgeable, or at least somewhat knowledgeable, when it came to personal financial planning. That number has unfortunately decreased, as the 2016 report found that only 69% of physicians felt knowledgeable or somewhat knowledge about their personal financial planning.
The fourth crazy statistic that the 2013 and 2016 reports on physicians’ financial preparedness found was that while medical professionals are often thinking ahead and concerned about their future, many physicians do not have a complete estate plan and medical directive set up. The 2013 report found that only around 50% of United States physicians have a full estate plan with a will and medical directive. Estate planning appears to be on the decline for physicians, as in 2016, only 35% of physicians said that they have a full estate plan and will ready in the event of their passing.
Physicians certainly have plenty of challenges when it comes to repaying debt, making smart investments and financial decisions, and planning for the future, especially when you think about student loan debt and the minimum down time they have in their schedules to handle personal finance. It’s important for medical professionals to seek out professional financial planning professionals, to ensure that they’re on the right track for their future.
LeverageRx is an online financial marketplace for physicians, dentists and other medical professionals looking for personal financial and legal assistance. The platform offers unbiased reviews and comparisons of products and services relevant to medical professionals including physician mortgage loans, physician contract review, physician disability insurance, life insurance for physicians, physician student loan refinancing, physician relocation services and medical practice loans. To ask a financial question and get qualified advice from experts across the country, visit LeverageRx.