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Leslie Kane, MA | May 9, 2018
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
How physicians save, spend, and invest the money they earn varies widely. Medscape's 2018 Physician Compensation survey contained questions on net worth, debt, and spending. The responses from more than 20,000 physicians in over 29 specialties give key insights into how physicians manage their money to build savings. (Some totals in this presentation do not equal 100% due to rounding.)
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
The average physician salary—including primary care and specialties—is $299,000, according to Medscape's 2018 Physician Compensation Report. Overall, specialists earn about 48% more than primary care physicians, although there is a large salary range among specialties.
For employed respondents, compensation includes salary, bonus, and profit-sharing contributions. For partners and solo practitioners, it includes earnings after taxes and deductible business expenses but before income taxes.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
A majority of physicians have a net worth of under $1 million, while 41% of physicians have assets of $1 million or more.
Net worth includes all assets (savings, investments, equity in properties) minus debts, loans, mortgages, and other liabilities. "In my experience, the largest asset for most physicians is their retirement plan at work, 401(k)/403(k), so I would say the bulk of their assets are in cash and investment vehicles and not in their primary residence," says Joel Greenwald, MD, CFP®, of Greenwald Wealth Management, St. Louis Park, Minnesota.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Earning the highest income appeared to correlate directly with having greater net worth. The five specialties with the highest income were also among those with the highest proportion of net worth over $2 million.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
The field narrows when looking at physicians with over $5 million net worth. How do physicians stack up with the general population? At the end of 2016, there were 10.8 million millionaires nationwide in the United States. That includes 9.4 million individuals with a net worth of $1 million to $5 million, and 1.3 million individuals with a net worth of $5 million to $25 million.[1]
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
On the flip side, 39% of physicians have a net worth of under $500,000. Income by specialty is just one influencing factor. Younger physicians typically have more school debt, less equity in their homes, and fewer years to have built up their savings.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Net worth increases with age. By the 35-49 age range, over a quarter (28%) of physicians have a net worth between $1 million and $5 million. Physicians appear to reach their peak net worth after age 50.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Female physicians in both primary care and specialties earn less than male physicians, so it's not surprising that they have overall less net worth. Forty-seven percent of men have a net worth of $1 million or more, compared with 31% of women. "As in other careers, physicians are susceptible to pay inequity," says Karen Altfest, PhD, CFP®, principal advisor and executive vice president at Altfest Personal Wealth Management, New York, New York. "Even with greater numbers of women graduating from medical school than in the past, pay equity has not yet been achieved. In addition, women physicians may take more leave than men do and may be penalized with lower-paying positions when they return to the workforce."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Net worth of over $5 million is generally a low percentage among all physicians. The percentage of physicians with net worth under $1 million is highest among African American/black doctors. In our survey, 60% of African American/black physicians are female, whereas in other racial/ethnic groups 30%-40% are female.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Overall, US-trained physicians have higher net worth than do foreign-trained physicians. Foreign-trained physicians include Americans who attended a medical school outside the United States, as well as physicians born and raised in another country who attended medical school outside the United States.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
The average medical school debt was $190,000 in 2016.[2] The average cost of 1 year at a public medical school (including tuition, fees, and health insurance) was $34,592 for in-state students and $58,668 for out-of-state students in 2016-2017. Tuition and fees at a private school runs an average of over $50,000 a year.[3]
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Most school loans are paid off by age 50, which is still a significantly long time to be paying down a loan.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Physicians who live "at their means" typically use up most of their income, with little left over. Between paying off school debt, car loans, and mortgage, it's easy to see how income gets siphoned off. Physicians living below their means have either made savings a priority or have reached the stage where many debts are paid off, children have grown up, and overall expenses are lower.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Only a small 6% of physicians outspend their income. Most make the effort to watch expenses and put aside money for the future.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
"I always stress that the most important factor by far in creating your net worth is savings rate," says Joel Greenwald, MD, CFP®. "If you save 20+% of your gross income for retirement, you'll be fine. If you save 5% or 10%, you're in trouble, no matter what sort of investment return you're aiming to get."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
While their incomes may be different, they share a sense of financial responsibility and a mindset of putting themselves in a better fiscal position.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
"I was impressed with the diversity of responses on how physicians handle family finances," says Karen Altfest, PhD, CFP®. "The majority of families chose the most traditional way of handling their accounts—that is, they pool their incomes. I find this to be more true in first marriages than in second marriages, and it does show a level of trust among spouses. Even so, in many families, one person is assigned to keep track of the money decisions."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Physicians overall are quite responsible about saving for the future. Only a minority (13%) do not regularly put money into tax-deferred accounts. The amount that physicians put into such accounts increases with physician age. Of those who save more than $2000 per month in a tax-deferred account, 43% are in the 50-64 age range.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Fewer physicians put money into taxable savings accounts than tax-deferred accounts. Most financial advisers would consider this a wise move, as capital gains and interest income in a taxable account are taxed annually.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
"I think a budget is either written or it doesn't exist," says Joel Greenwald, MD, CFP®. "Our physician clients don't necessarily need a budget. It all depends on their savings rate—the percentage of their gross income that goes towards retirement."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
"It's great that more than half of the physicians report having a savings goal," says Karen Altfest, PhD, CFP®. "For others, it will be difficult to reach a moving target. To better prepare for your future, define your retirement savings target. For those for whom retirement is in sight, it's best to determine new expenses and any savings associated with moving to a new location, as well as a projection of your costs and sources of income in retirement. Don't forget to factor in an inflation rate for your expenses."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Most physicians have at least met with a financial planner, even if they're not currently working with one regularly. Some get a financial plan or advice from a professional as a guideline.
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
A majority of physicians are paying off mortgages. Car leases or loans and medical school debt are other common debts and expenses. Respondents named some others: "home improvement loans"; "expensive tennis academy for my son"; "helping my parents with large medical bills and healthcare"; "personal loans"; "property acreage."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
Most physicians steered clear of a financial loss last year. However, those who did lose money told of unfortunate or unexpected circumstances: "I had money stolen out of my 401(k)"; "loss of months of practice due to a hurricane"; "unpaid maternity leave"; "loan to a new business that didn't work out"; "starting a new business"; "car crash"; "I lost my second home in a fire."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
The majority of physicians (54%) have either never invested or never made an investing mistake. Other physicians described failed investments: "I bought a speculative stock that didn't do well, and I bought a second home at the peak of the market"; "I was the victim of a timeshare scam based in Nevada"; "I bought a volatile stock that bottomed out after I purchased it"; "I invested in a home health company with several other physicians. It was poorly managed, did not meet expectations, and eventually closed. I lost all of the initial investment."
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
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Medscape Physician Wealth and Debt Report 2018
Leslie Kane, MA | May 9, 2018 | Contributor Information
More than 20,000 physicians told us how much they save, how big a mortgage they carry, and which financial mistakes they've made.Medscape Features Slideshows, May 2019
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Contributor Information
Leslie Kane, MA
Senior Director
Medscape Business of Medicine
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References + More on Methodology
References
Elkins K. Some say 'millionaire is the new middle class'—here's how many Americans are actually worth $1 million. June 2017. CNBC. Article Accessed March 14, 2018.
Kessler S. Average medical student debt in 2017. Student Debt Relief. January 3, 2018. Article Accessed March 14, 2018.
Association of American Medical Colleges. Tuition and student fees. Article Accessed March 14, 2018.
More on Methodology
Survey invitations were emailed to Medscape member physicians from November 21, 2017 to February 21, 2018. Respondents were invited to participate in an online study of "Physician Compensation and Net Worth." Members who completed the survey were entered into a sweepstakes that awarded 50 random winners a $150 Amazon.com gift card.
Respondents were required to be physicians currently practicing in the United States. The total sample size was 20,329. The overall margin of sampling error for this survey was ± 0.69% at a 95% confidence level using a point estimate of 50%. Statistical difference from 50% is the most conservative in measuring sample error.
Other factors may also contribute to error in survey estimates, including measurement error, construct and content validity, question wording, and question order. Standard quality-control measures included checking for clear question wording, proper question ordering, and use of appropriate scales and response categories. In addition, during the field period, the survey was checked to make certain that respondents were answering all questions logically and that skip-pattern programming was working properly.
The final data were cleaned to ensure data quality. Full-time respondents were weighted to reflect the American Medical Association's physician distribution by specialty, state, and gender.
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