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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019
| Contributor Information
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Today's financial picture for physicians shows both highs and lows. Some doctors are stockpiling savings while others are struggling to pay off debt and live a comfortable lifestyle.
For this report, we used data from the annual Medscape physician compensation survey (producing the most in-depth and widely used physician salary survey report in the United States), which provides responses from about 20,000 physicians in more than 29 specialties each year. Family physicians told us about their saving, spending, and investing habits, as well as how they manage their finances.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
While compensation is up from last year's average of $219,000, FM physicians are still making less than the average overall compensation for all physicians in 2018.
Survey respondents provided their compensation for patient care. For employed physicians, that includes salary, bonus, and profit-sharing contributions. For partners, it includes earnings after taxes and deductible business expenses before income taxes. Only full-time salaries are reported. (Note: Label values on charts are rounded, but rankings and calculations are based on raw data to avoid rounding errors.)
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
While more than half of physicians report having a net worth of over $1 million, there are fewer FM physicians (36%) in that category. The majority report less than $1 million. Net worth is defined as total assets (eg, money in bank accounts, investments, retirement accounts, equity in one's home, value of cars, value of jewelry) minus total liabilities (eg, mortgage, car loans, credit card debt, school loans, home equity loans).
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
It's no surprise that the top-earning specialties are among those with the highest net worth. Among the top, 20% of gastroenterologists and 19% of dermatologists had a net worth of over $5 million. FM physicians rank among the lower portion of the list.
For context, in 2018, about 3% of the US population (11.8 million US households) had a net worth of more than $1 million, and 1.3 million wealthy Americans were in the ultra–high net worth category, with household assets (excluding primary-home real estate) of between $5 million and $25 million.[1]
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
For physicians, one of the perks of growing older is often having more money. FM physicians aged 55 and older were more likely to comprise the largest portion of those with a net worth of over $5 million. Those over the age of 55 comprised the largest percentage of FM physicians with $1 million to $5 million in net worth.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Having a comfortable home is usually considered important to one's well-being. To achieve that, many physicians have taken out sizable mortgages. However, these mortgages are fairly standard for physicians and other high-income professionals, says Joel Greenwald, MD, CFP, of Greenwald Financial Management, St. Louis Park, Minnesota.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
A general rule in financial planning is that monthly housing costs, which include mortgage payments, insurance, property taxes, and condo or association fees, shouldn't exceed 28% of your monthly gross income.[2] For younger physicians, this percentage is sometimes higher but typically gets back into proportion as earnings increase.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Those with the largest mortgages typically have the highest income, and the monthly payments are within their means. An often-accepted rule of thumb is that a mortgage should be no more than three times one's annual income. Dermatologists and ophthalmologists have among the largest percentages of physicians with a mortgage over $500,000. FM physicians rank at the bottom of this list.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Let's trash the belief that doctors can't manage money or invest wisely. About 65% of FM physicians said they saw no significant financial loss in 2018. Of those who did, bad investments and practice issues were cited most often.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
More than half of FM physicians said they never made an investment mistake or even made an investment at all. Stocks were cited as the largest source of loss among FM physicians, followed by other investments that did not work out.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Only a small percentage of FM physicians say they live above their means. "It's uncertain whether people are always the best judge of whether they are living within their means or not," says Greenwald. "We use a rule of thumb that physicians should be saving 20% of their gross income for retirement. If they are saving that amount or more, they're within their means."
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Medical school debt typically weighs on physicians for decades, and that's the case for FM physicians, who are among the leading specialties still repaying loans. "I think doctors are ashamed that they are not making a lot of money. Even neurosurgeons don't finish paying off debt until their 50s. It is a very challenging problem for the country," says Robert Grossman, MD, dean and CEO of NYU Langone Medical Center.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
As in Medscape's previous reports, mortgages, car loan payments, and paying off one's own college loans are the major expenses for physicians. "Overspending is fairly common; doctors are paying back school debt, saving for retirement, saving for their children's college, and living the lifestyle they feel they deserve after all the years of training and the hard work they are putting in now," says Greenwald.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
While a majority of physicians pool money with their spouses for common expenses, 25% of FM physicians say they don't have joint finances with a spouse or partner. Among all households across the United States, 63% of couples shared at least one credit card. Among millennials, 60% say they keep some or all credit cards separate, compared with 55% of Gen Xers and 48% of baby boomers.[3]
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Consistent with the finding that women physicians overall earn less than do men (as noted in Medscape's Physician Compensation Report), they also tend to have lower net worth. A contributing factor is that there are fewer women among the higher-paying specialties.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
African American/black physicians comprised the largest percentage, and Caucasian/white physicians the smallest, of those with net worth under $1 million. Note that physicians could choose more than one racial and ethnic group for self-identification.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
More than half of FM physicians are impressive savers, putting more than $1000 per month into tax-deferred accounts. The percentage of physicians overall saving over $2000 per month in a tax-deferred account rose from 33% in our last report to 38% this year. For context, the average personal savings rate in the United States was 7.6% in 2018.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Typically, there is a limit to how much one can put into a tax-deferred savings account, and many physicians are also saving outside of their tax-deferred account. However, about a third of physicians don't save money in a taxable account.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
More than half of FM physicians have worked with a financial planner in the past or are working with one now. While 9% of all physicians are not working with a planner, that percentage is higher among FM physicians as well.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
"Many docs don't have a formal budget and they do just fine," says Greenwald. "Some physicians without a formal budget are inherently frugal, and spending money on ‘things' is not what brings them pleasure. I get back to the rule of thumb. We tell clients that if they are saving 20% of their gross income for retirement (more is better but 20% is fine), then we don't care what they choose to spend the rest of their money on."
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
FM physicians were about equally divided regarding having a specific number in mind for a target savings amount.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Salary and compensation for any specialty show a general correlation with amount of net worth. As one of the lower-earning specialties, FM physicians are at the top of the list of doctors with a lower net worth versus their peers.
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
Net worth tends to rise consistently throughout a physician's life; however, even for physicians who are a bit older and feel that they're behind the eight ball financially, there are moves they can still make to help get them back on a steady path. "People come in at all stages of life; last week we got new clients who are in their 60s and have never worked with a planner," says Greenwald. "The earlier you start planning, the better."
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | Contributor Information
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Medscape Family Physician Wealth and Debt Report 2019
Keith L. Martin | June 12, 2019 | 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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Keith L. Martin
Editorial Director
Medscape Business of Medicine
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References
Spectrem Group. Spectrem Group's 2019 Market Insights Report reveals 10th consecutive annual increase in wealthy American households. [Press release] March 12, 2019. Source
Karaim R. How much house can you afford? Interest.com. March 28, 2019. Source
TD Bank. Love & Money: Millennial couples are savvier than their youth would suggest. September 2016. Source
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