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Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Although many physicians struggled with income issues in 2020, psychiatrists are overall 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.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Psychiatrists' income improved somewhat, from $268,000 in our 2020 report to $275,000 in 2021. But that still puts them among the lower-paid specialists. Although many medical offices were closed for a period in 2020, some physicians made use of the Paycheck Protection Program; others renegotiated leases, switched to telemedicine visits, and made other cost-cutting changes that kept earnings relatively on par.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Psychiatrists' wealth overall has increased somewhat over the past year. Forty percent reported a net worth of $1 to 5 million this year compared with 38% last year. "The rise in home prices is certainly a factor," says Joel Greenwald, MD, CFP, a wealth management advisor for physicians who is based in St Louis Park, Minnesota. "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."

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Six percent of psychiatrists have a net worth of over $5 million, up slightly from 5% last year.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

The percentage of psychiatrists with a net worth under $500,000 decreased from 37% last year to 32% this year. Psychiatry is still among the specialties reporting a high percentage of members with a net worth under $500,000.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

As in prior years, a majority of psychiatrists are paying down a home mortgage, while a significant percentage are paying off car loan payments. Paying off college and medical school debt is still a burden for 26% of psychiatrists. Respondents also named some of their other expenses: bills for assisted living for elderly relatives; child support payments; a boat, tractor, or aircraft loan; hefty taxes; care for a disabled child; and "a huge, lavish wedding."

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Despite some months of financial challenges to psychiatrists' 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.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Almost three quarters of psychiatrists continued spending as usual. About one quarter of psychiatrists took significant steps to lower their expenses, such as refinancing their house or moving to a less costly home.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Twenty-six percent of psychiatrists are still paying off school loans, similar to last year's number. The Association of American Medical Colleges notes that the average medical school debt for students who graduated in 2019 was $201,490. By gigantic contrast, the average student loan debt for all graduating students in the same year was $28,950.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Savings was mixed for psychiatrists this past year. Whereas 61% put the same amount or more each month into their 401(k), 30% put less money into it compared with the prior year. It's likely that many psychiatrists had to dig into their bank accounts or use their full income to pay bills when they had fewer patients or worked fewer hours during COVID.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Whereas about half of psychiatrists put the same amount or more into after-tax accounts, 22% put less money into them compared with last year. Another one quarter didn't use these savings accounts at all.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Earnings overall are higher for male psychiatrists than for female psychiatrists, and that shows up in net worth. Fewer female psychiatrists are worth more than $5 million, and more female psychiatrists are worth less than $500,000.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

The percentage of psychiatrists who had losses due to practice issues rose from 6% to 9% in the past year. Much of that was probably due to COVID. However, about the same percentage reported no financial losses this year (76%) compared with last year (75%).

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Stock and company investments are common among physicians. The percentage of psychiatrists who made bad stock investments was similar to the percentage of physicians overall who made similar investments. Physicians sometimes bankroll a colleague's or family member's venture. In many cases, these investments don't work out.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Consistent with prior years, about half of psychiatrists 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.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

About 70% of psychiatrists live in homes that have at least 2000 square feet. The average size of a new single-family home in the United States grew from 1660 square feet in 1975 to 2531 in 2019.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

The specialties with the highest and lowest percentages of larger homes are similar to those in prior years. Seven percent of psychiatrists have homes that are over 5000 square feet, which puts them among the specialists with the lowest percentages of larger homes.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Psychiatrists' mortgages span a wide range, from less than $100,000 to more than $500,000. However, 27% of psychiatrists reported having no mortgage. According to the Mortgage Bankers Association, the overall average size of a home mortgage loan was $344,556 in March 2020.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Many psychiatrists have a higher-than-average number of credit cards, with 42% having at least five. (The average American has four.) People may have multiple cards in order to get travel rewards, 0% APR introductory rates, or bonus cash back in some categories. A recent review showed that New Jersey, Connecticut, and New York residents have the most credit cards on average, whereas Alaska and Mississippi residents have the fewest.

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

The vast majority of psychiatrists are living within or below their means. "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."

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

About half of psychiatrists pool their income to pay the bills, whereas one quarter do not have joint accounts with a spouse or partner. Respondents 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."

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

Medscape Psychiatrist Wealth & Debt Report 2021

Christine Lehmann, MA | August 13, 2021 | Contributor Information

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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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