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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022
| Contributor Information
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Last year brought welcome relief to physicians whose incomes generally rose as practices reopened after COVID-19 restrictions lifted and patients ventured out.
Over 13,000 physicians in more than 29 specialties told us about their compensation and also how they build wealth, with insights into how they save and invest, how they budget and control their expenses, and how well they live within their means.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Physician income took a jump from the prior year, but some of that was compensating for stagnant or declining income in 2020, when practices were closed and patients were staying home.
"Compensation for most physicians is trending back up as demand for physicians accelerates," says James Taylor, chief operating officer of AMN Healthcare's Leadership Solutions Division. "At the height of the pandemic in 2020, Merritt Hawkins saw a 30% decrease in client physician recruiting engagements year-over-year. But in the fourth quarter of 2021, engagements hit an all-time high. The market for physicians has done a complete 180 over just 7 or 8 months."
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Physicians continue to steadily build wealth. The ranks of physicians with net worth over $5 million have climbed from 7% in our 2019 survey. About 46% of doctors have net worth of $1 million to $5 million, similar to the 44% in 2019.
The net worth of many physicians exceeds the average US family net worth of about $749,000, and their wealth is growing at a faster rate, according to the last Federal Reserve data.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Fortunes change, and so too does the wealth of different physicians. From one year to the next, the specialties at the top of the list of those reporting net worth exceeding $5 million shift. However, orthopedists have been in the top five specialties and dermatologists in the top 10 since our 2019 report.
Of interest, 20% or more of physicians in eight specialties say they are worth more than $5 million. Only one specialty (gastroenterology) ever cracked the 20% mark in the prior three reports. A rising stock market built additional wealth; the S&P rose nearly 27% in 2021 compared with 16.3% one year earlier.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Here's the other side of the wealth coin: The ranks at the lower end of the physician scale also expanded. In last year's report, no specialty had more than 18% of its doctors reporting a net worth under $500,000.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
For some groups, the wealth gaps between male and female physicians narrowed from last year's report.
Male doctors, on average, earn more than female doctors do, and that has an impact on wealth development. So does the relatively low percentage of female doctors in higher-earning specialties. Spread those income differences out over a 40-year career, and female physicians deal with an earnings divide of nearly 25%, one study shows.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The share of Caucasian/White physicians with a net worth exceeding $1 million is higher than it is for Asian American, Latinx/Hispanic, and African American/Black physicians. This mirrors the situation in US society in general, although not to the same degree, given doctors' earning potential.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The ranks of physicians who say they live within or below their means have held pretty steady since our 2019 report (93%). Opinions vary about what it means to live within your means. Joel Greenwald, MD, CFP, a wealth management advisor for physicians, has told Medscape that paying your credit card bill each month and contributing enough to a 401(k) account to get an employer match does not meet his standard. You also need to save at least 20% toward retirement, pay down student loans, contribute to your kids' college savings, and set aside rainy-day cash, he says.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Create a household budget and follow it rigorously? Cut back on restaurant meals? Sure, but readers had other strategies as well.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The percentages of doctors managing expenses or debts have held remarkably steady in every category over our past four reports. Physicians owe mortgage payments on their homes at about the same rate as Americans in general (63%). But they carry forward credit card balances from month to month less often than does the average American (24% compared with 52% nationwide).
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
About 7 in 10 physicians do not feel the need to cut major household expenditures, a confidence rate similar to last year's report (68%). Doctors changed homes a bit more often and refinanced loans somewhat less (4% and 17% last year, respectively). Soaring profits on house sales and rising interest rates could help explain decisions to refinance loans or change houses.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
With the economy rebounding from COVID, the share of physicians reporting no significant financial losses was as large as it's been in several years. In last year's report, 68% of doctors avoided major financial hits. Also, slightly fewer doctors report losses due to practice issues (15% in last year's report) or in the stock market (10%).
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Although spiraling college loan debt is a national priority, the range of pending school loans by specialty has somewhat improved in recent years. For example, in our 2019 report, anywhere from 14% to 33% of physicians by specialty were still paying off school loans.
Freeing yourself from medical school debt remains very, very costly. Physicians in this country, on average, pay $365,000-$440,000 over time. Of that, $165,000-$240,000 is interest.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The sources of investments gone sour for physicians follow a similar pattern to last year's report. Doctors frequently choose stocks, business investments, or real estate ventures that don't work out.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The ranks of physicians increasing, or at least maintaining, their investments in 401(k)s or tax-deferred college accounts nudged up from last year's report (59%). Improvement in the post-COVID US economy made it easier for doctors to save.
Depending on your age, many financial experts will recommend contributing 10%-20% of your salary to retirement savings.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
More physicians are steering money into after-tax savings accounts like Roth IRAs (75% vs 69% in our 2019 report). However, the ranks of physicians who increased or at least maintained their savings pace were unchanged from last year's report. If interest rates continue to climb, that situation could change.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Physicians' mortgages cover a broad range. About the same shares of doctors either don't have or have paid off their mortgages or carry more than $400,000 in home loan debt as in last year's report (28% and 25%, respectively). Amid a sizzling housing market, the size of the average home loan recently reached about $448,000, according to the Mortgage Bankers Association.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
The statistics on keeping current with bills despite COVID's impact on the economy and home finances were virtually identical to those in last year's report.
Physicians should feel fortunate. One 2021 industry survey reported that 46% of Americans missed one or more rent or mortgage payments because of COVID.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Physicians continue to have an appetite for big houses, although at a slightly smaller clip. Seventeen percent of primary care doctors and 26% of specialists live in at least 4000 sq ft, compared with 18% and 29%, respectively, in last year's report. Meanwhile, the average size of a US house has been falling to 2261 sq ft.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Why do physicians in a particular specialty tend to have bigger houses? It's hard to say, and various factors could come into play. But the same few specialties typically have been near the top of this list in our past three reports.
In 2020, the average size of a house in the United States was 2261 sq ft.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
These credit card statistics have been pretty stable across our past three reports. About 4 in 10 physicians carry more credit cards than the average American (who has about four cards, credit bureau Experian reports).
Experts say that though you need to be careful with cards and diligently pay them off, having five or more credit and loan accounts can help boost your credit rating.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
About 2 in 3 physicians differ, at least sporadically, with their significant others about spending. A Northwestern Mutual study found that across the country, around 1 in 4 couples argue about money at least once a month.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
Do restaurant servers like having doctors at their tables? Perhaps so, because about 2 in 3 physicians say that they typically tip at least the recommended 20% for decent service.
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
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Medscape Physician Wealth & Debt Report 2022: How Did a Tough Year Add Up?
Jon McKenna | June 10, 2022 | Contributor Information
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