New Report Outlines Financial Benchmarks for Physicians
The American Medical Association and its insurance subsidiary recently issued new benchmarking data for physicians with a new publication titled 2016 Report on U.S. Physicians’ Financial Preparedness.
Although the study was tailored to better understand the unique financial situation of medical households, it can still offer insight and ideas to most professionals who share similar characteristics, including: a late start to their careers, liability concerns, staggering debt, and limited personal finance education.
- The study was designed to probe personal ﬁnancial attitudes. They surveyed 2,331 practicing physicians across the country, and from a variety of ages, specialties, employment situations, and practice environments.
- Physicians were questioned about their personal financial concerns, debt, retirement savings and future plans. Profiles were segmented according to age-bands.
- “A comfortable retirement” remains a universal personal ﬁnancial goal for physicians and it is also the source of their top concern: “having enough money to retire.”
- The study compared responses by physicians who are “ahead of schedule” versus “behind,” and nearly 40% consider themselves “behind” where they’d like to be in saving for retirement.
In addition to retirement portfolio values, the age-band financial preparedness profiles for those in their 30s, 40s, 50s, and 60s offers views on investment behavior, employment, family situation, and debt.
The report is not intended to be read as a “silver bullet” solution applicable to every physician household. Rather, it informs a framework for developing a household’s long-term financial plan.
Key findings include 7 characteristics shared by those considered “ahead of schedule.”
- Knowledge about personal finance
- Use a professional financial advisor
- Carry less debt
- Max out 401k/403b contribution annually
- Have estate plan elements in place
- Are confident in their decision making
- Plan to retire sooner
Takeaway: The earlier you take stock of your current financial situation, develop realistic financial goals, and benchmark against a relevant peer set along the way, then the higher the probability of achieving those goals.
Learn more about the author, Ronsey Chawla, MBA, CFP®.2016401(k)403bAmerican Medical Associationcareerdebtfinancial preparednessinvestment behaviorliabilitypersonal finance educationphysiciansreportretirementRonsey Chawla