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Leslie Kane, MA | June 11, 2021
| Contributor Information
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Although many physicians struggled with income issues in 2020, overall they're doing pretty well with building their nest egg and paying off debts. Many cut their expenses, whereas others saved less than in prior years. Debt remains a big issue. Medscape surveyed almost 18,000 physicians as part of our annual Physician Compensation Report 2021, to assess the state of physician net worth and debt in America. Net worth measures a person's total wealth, accounting for all financial assets and debts.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Somewhat surprisingly, physician income on average ended up fairly on par with the previous year. Although many medical offices were closed for a period of time in 2020, some physicians made use of the Paycheck Protection Program; others cut staff, renegotiated leases, switched to telemedicine visits, and made other cost-cutting changes that kept earnings relatively on par.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Physician wealth on average has gained some ground over the past year. In last year's report, 50% of respondents reported a net worth of under $1 million compared with 44% with under $1 million this year. Last year, 50% had $1 million or more in net worth compared with 56% this year. "The rise in home prices is certainly a factor," says Joel Greenwald, MD, CFP, St Louis Park, Minnesota, a wealth management advisor for physicians. "Definitely the rise in the stock market played a large role; the S&P 500 finished the year up over 18%. Finally, I've seen clients accumulate cash, which has added to their net worth. They cut back on spending because they were worried about big declines in income and also because there was simply less to spend money on."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
In general, the same specialties as last year make up the top group now. However, a larger percentage of the top-ranking specialties are in the over $5 million category this year. In last year's report, no specialties reported having over 20% of their members with over $5 million; this year, five specialties report that more than 20% of their members have a net worth over $5 million.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
The percentage of specialties having a net worth under $500,000 is similar to last year's figure.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
As in prior years, a majority of physicians are paying down a home mortgage. Respondents also named some of their other expenses: bills for assisted living for elderly relatives; child support payment; boat, tractor, or aircraft loan; hefty taxes; care for a disabled child; and "a huge, lavish wedding."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Despite some months of financial challenges to physician incomes, the vast majority kept up with paying their bills. This is better than what much of America experienced; according to a US Census Bureau survey last July, 25.3% of adults missed a mortgage or rent payment as a result of COVID difficulties.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Two thirds of physicians continued spending as usual. About one third of physicians took significant steps to lower their expenses, such as refinancing their house or moving to a less costly home.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Physicians also offered these suggestions: Buy in bulk; purchase at wholesale stores; don't order anything online; stop the newspaper delivery; set up automatic deposits into your savings account; don't carry any credit card debt; don't carry a credit card; and refinance your primary home at a lower interest rate.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
The specialties with higher percentages of doctors still paying off school loans are similar to last year's roster. The Association of American Medical Colleges notes that the average medical school debt for students who graduated in 2019 was $201,490. By contrast, the average student loan debt for all graduating students in the same year was $28,950.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Savings took a hit in 2020. "Physicians curtailed their savings behavior for a number of reasons that vary with both specialty and type of employment," says Ned Palmer, MD, MPH, chief strategy officer at Panacea Financial and attending physician at Boston Children's Hospital and Harvard Medical School. "While some physicians sadly had their employment terminated, many more saw austerity programs instituted by hospitals trying to cut costs to stay afloat. These cuts affected salary and retirement matching contributions, and, frankly, undercut the confidence required to save money in a vehicle like a 401(k)/403(b) that has restrictions to withdraw."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Whereas almost 50% saved around the same amount as last year, over one quarter saved less. Another one quarter of respondents didn't save at all in an after-tax account.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Earnings overall are higher for male physicians than for female physicians, and that shows up in net worth. Fully 44% of men had a net worth of $2 million or over compared with 23% of women. One contributing factor may be that the percentage of women in the higher-earning specialties is fairly low.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
The percentage of physicians who had losses due to practice issues (business problems, reimbursement, change in practice situation) almost doubled from our 2020 report, from 8% to 15%. Much of that was due to COVID. Also, fewer physicians this year (68%) than last year (72%) said they had no financial losses.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Stock and company investments are common among physicians. "The most significant reason that we believe many physicians suffer from poor individual stock investments is that they invest based on breakroom tips or ideas from other doctors who are not very educated in equity investing," says Tyler Stafford, CFA, CEO of Panacea Financial, Little Rock, Arkansas. "In doing so, physicians can face notable underperformance in individual stock selection, given the multitude of factors that drive short-term stock reactions."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Physicians shared some of their other investments that turned out poorly: "I invested in a restaurant that didn't make it"; "invested in a sports store that didn't survive"; "traded options"; "invested in a marriage that was a financial catastrophe." And finally, "I invested a few thousand in Bitcoin with a shady character 10 years ago. I lost the money and would have been a millionaire if I had invested directly through a brokerage account."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Consistent with prior years, about half of physicians have a general idea of how much they spend and on what, but they don't track it or formalize it. According to a survey by Intuit, only 35% of Americans say they know how much they spent last month. In that survey, viewed by age, 27% of millennials, 34% of Gen Xers, and 46% of baby boomers knew how much they spent.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Most physicians live in fairly spacious homes. The average size of a new single family home in the United States grew from 1660 square feet in 1975 to 2531 in 2019.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
The specialties with the highest and lowest percentages of larger homes are similar to those in prior years.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Physician mortgages span a wide range, and more than one quarter of physicians have no mortgage anymore. According to the Mortgage Bankers Association, the overall average size of a home mortgage loan was $344,556 in March 2020.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Many physicians have a higher-than-average number of credit cards. (The average American has four.) People may have multiple cards in order to get travel rewards, 0% APR introductory cards, or bonus cash back in some categories. A recent study showed that New Jersey, Connecticut, and New York residents have the most credit cards on average, whereas Alaska and Mississippi residents have the fewest.
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
"There are certainly folks who believe that as long as they pay off their credit card each month and contribute to their 401(k) enough to get their employer match, they're doing okay," says Greenwald. "I would say living within one's means is having a 3-6 months emergency fund; saving at least 20% of gross income toward retirement; adequately funding 529 college accounts; and, for younger docs, paying down high-interest-rate debt at a good clip."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Physicians described their strategies: "Husband pays the mortgage for the house. I pay everything else"; "We vary payments based on who has better cash flow at the time"; "We have separate finances and pay equal amounts into an account for certain household bills"; "My spouse is a stay-at-home dad"; "I pay everything, my wife sleeps and plays on the computer all day."
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
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Medscape Physician Wealth & Debt Report 2021
Leslie Kane, MA | June 11, 2021 | Contributor Information
Medscape Physician Compensation Report 2021: The Recovery Begins
Physician compensation was atypical in 2020 due to the COVID pandemic. Almost 18,000 physicians told us about their income, bonus, hours worked, and greatest work challenges.Medscape Features Slideshow, April 2021
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