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Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023
| Contributor Information
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Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Physicians had much to feel encouraged about as they worked on their family’s financial future in 2022. Average compensation for a doctor continued to rise. About 60% of physicians reported a family net worth exceeding the national average. Even so, they became increasingly careful in their spending habits, as 42% of doctors said their families live below their means.
In this report, gender is based on how physicians self-identified in our survey.
Some totals in this presentation do not equal 100% because of rounding.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Doctors' pay continued to rise. Five years ago, our 2018 Medscape Physician Compensation Report showed average total physician compensation at $299,000.
"We expect physician income to continue increasing as everyone talks about a physician shortage, which the pandemic has exacerbated," says Mike Belkin, JD, divisional vice president at Merritt Hawkins, a physician recruitment firm. "We see more physicians burned out, retiring, reducing their hours, or looking for shift work or virtual care, which further reduces the physician workforce."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
At least 59% of physicians reported family net worth exceeding the
$748,800 for an average American family (according to a Federal Reserve report).
That net worth figure includes home equity, which Joel Greenwald, MD, encourages his financial advisory clients approaching retirement to disregard as part of their wealth. Greenwald is a St. Louis Park, Minnesota, certified financial planner and wealth management advisor who works exclusively with doctors.
"Your house is not an investment; it's where you live," Greenwald says. "In my experience, people heading into retirement sell their million-dollar house and move into a $900,000 condo."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Over the past few years in our reports, plastic surgeons and orthopedists often have been at or near the top of this list. Pediatricians and family physicians usually are at the lower end.
"As you can see, [medical] procedures pay," Greenwald observes. "Everybody at the top of this list does procedures."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Ideally for physicians, the share of those in a particular specialty whose net worth is under $500,000 would be on the small side.
Tyler Stafford, CEO and co-founder of Panacea Financial, a Little Rock, Arkansas, bank that caters to physicians and other healthcare professionals, notes that some specialties with smaller percentages of doctors whose net worth is below $500,000 also typically enjoy higher average annual incomes. Examples are orthopedics, otolaryngology, and plastic surgery, he says.
Conversely, several specialties with high shares under $500,000 — family medicine, public health, and pediatrics, for example — have lower incomes on average, Stafford says.
"The higher the income, the greater the ability to save, invest, and create net worth," he says.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Compared with last year's report, the gender gap among doctors with net worth of $5 million and up was virtually the same. The disparity between men and women in the $2 million to $4.99 million net worth category was 7 percentage points this year and 10 last year.
Representation of women in medical school admissions and in physicians' jobs has made meaningful strides, Stafford believes. "But we're still not close to parity in overall representation in the medical workforce," he says.
"The major issue that is driving income and net worth disparity is that female underrepresentation among later-career physicians who have had time to build wealth is still meaningful. I would hope and expect that this disparity would correct over time."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Sixty-three percent of Caucasian/White doctors reported a net worth of at least $1 million, compared with 58% of Asian American, 50% of Latinx/Hispanic, and 37% of African American/Black peers. Those percentages are very similar to what we reported last year.
The gap between Caucasian/White and African American/Black physicians was pronounced, although better than in society in general. In the United States, African American families' average wealth was less than 15% of Caucasian/White families', according to a Federal Reserve report.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
In last year's report, 46% of doctors said they lived below their means. One reason why that percentage slightly declined, Greenwald believes, is that spending habits changed during the pandemic. "A lot of doctors were furloughed and laid off and now eat out less often," he says.
"The literature says you should save 15% of gross income toward retirement. At our shop, we say 20%, because physicians get a late start [after paying off med school debt] and are in catch-up mode."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Our reports have shown that physicians tend to shoulder mortgages to the same extent as Americans in general do but carry credit card balances from month to month less often.
In last year's report, 24% of doctors said they were still paying off their own college or medical school loans. Many physicians benefited from the government's pause on payments by federal student loan borrowers, according to Stafford.
"That absolutely made a big impact, whereas the proposal to forgive $10,000 of student loan debt would be a drop in the bucket for physicians, given how much they need to borrow," he says.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Why might about 7 in 10 physicians sidestep the need to cut or restructure big debts or expenses?
Many doctors have felt less squeezed by inflation than other Americans have, Stafford suggests, thanks to their high earnings and relative job stability.
"Also, a physician's family can do a lot to curb expenses shy of the major changes shown here," he adds. "They can shop more cheaply, shift purchases to a credit card, convert to a cheaper car."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
In last year's report, 8% of physicians reported losses from stock or other investments, and 72% had no significant financial losses.
But in the financial markets after that report, "there was no place to hide," Greenwald says. "Both stocks and bonds did terribly. Even someone with a balanced portfolio got hit."
He cautions against thinking that a paper loss in an individual stock (as opposed to long-haul investments in 401(k) or 403(b) accounts) is not a true loss. "What you really should do is start your analysis over. People often ride bad stocks down to zero because they couldn't face selling and admitting they made a mistake."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
The average medical school debt in the United States stands at just over $202,000, and an average graduate leaves medical school owing about $251,000 (including undergrad and graduate loans). So it's easy to understand why as many as 31% of doctors in a given specialty are still paying off debt.
Seventy-three percent of medical school graduates in America leave with educational debt, according to the Education Data Initiative. Debt was the number-one concern for medical students in a Medscape poll this year.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
When physicians were asked this question in late 2022, the stock market was rockier. Only about 1 in 4 of them expected their investment portfolio to grow over the succeeding 12 months.
But if the gains in the S&P 500 seen during the first quarter of 2023 continue, they may eventually belie some of those predictions.
"Doctors in general are time-strapped and may get a lot of their perspective from headlines about inflation, the housing market, and so on, which can lead to a bearish view toward their portfolio," Stafford says.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Over our past three reports, these statistics about investments that went south for primary care physicians and specialists have been pretty consistent. One exception is stock or business investments. In last year's report, somewhat smaller shares of PCPs and specialists reported bad experiences there.
More physicians gravitate to the stock market than to real estate when they want to invest, Greenwald says.
"Owning real estate is more work; you own a duplex across town that you have to keep rented and replace the boiler when it fails. Real estate is in the blood for some docs, but others are too busy and prefer stocks."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Compared with last year's report, physicians less often said they maintained investments in tax-advantaged accounts like 401(k)s and 403(b)s at the same pace. And they slightly more frequently said they cut the amounts they saved in these accounts each month.
"It's disappointing to see that," Stafford says. But he's encouraged that 9 in 10 doctors are regularly steering money into retirement or tax-deferred college savings accounts.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
While our data indicate that some physicians scaled back contributions to tax-free savings accounts in 2022, the pace of their savings in taxable accounts like Roth IRAs or "backdoor" Roth IRAs held pretty steady compared with both of our past two reports.
Greenwald finds this direction bothersome. "I would tell physicians to, first, put money into your 401(k) or 403(b) at work, up to the matching level," he says.
"Then, put money into a Roth or backdoor Roth up to the contribution maximum, as long as you aren't stopped by the federal income maximum. Then, go back into your retirement account at work and max it out."
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
The average size of a mortgage in this country was recently about $431,000, according to the Mortgage Bankers Association. Somewhere between 18% and 26% of doctors said their families shoulder more home loan debt than that.
As a rule of thumb, banks say, you should spend 28% or less of your family monthly gross income on your mortgage payment.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Doctors do seem to like big houses for their families. The average size of a new single-family house built for sale in the United States was 2485 square feet in 2021, according to data service Statista. At least 40% of primary care physicians and 53% of specialists choose to live in bigger houses than that.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
A home of 5000 square feet or more is quite big, more than twice the size of the average newly constructed single-family house in 2021. But at least a fifth of plastic surgeons, orthopedists, and otolaryngologists said their homes exceed that size.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
These statistics have been pretty stable across our past four reports, so a reliable profile has emerged of how many credit cards doctors feel comfortable carrying.
Credit bureau Equifax warns that having more than two to three credit cards open at a time can become unmanageable. Many physicians clearly don't feel the same. But then, neither does the average American, who credit bureau Experian says carries about four cards.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
In both years of this report, about 2 in 3 physicians told us they disagree with their spouse or significant other about spending habits, at least occasionally.
That level of squabbling puts doctors in the American mainstream. An AICPA study found that 7 in 10 married or cohabitating Americans disagreed with their partner over finances in the preceding year. Nearly half of couples experiencing financial tensions said it negatively affected intimacy.
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Wealth & Debt Report 2023
Jon McKenna | June 9, 2023 | Contributor Information
Medscape Physician Compensation Report 2023: Your Income vs Your Peers'
Which specialties earn the most, and which physicians work the longest hours? Our 2023 Physician Compensation Report tells what's happening with doctors' income. Medscape Features Slideshows, Apr 2023
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Jon McKenna
Senior Editor, Reports, Medscape Business of Medicine
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