The American Medical Association (AMA) launched a national survey to better understand the attitudes and behaviors of employed U.S. physicians in relation to their personal financial preparedness. Here are some of the highlights of the study and tips on how family physicians can better manage their financial health.
In the second annual report, the AMA reviewed the top financial concerns and challenges that physicians face today. These include: retirement planning and savings, income disruption, personal financial acumen, use of financial advisors, family finances, and types of insurance protection. A total of 2,073 physicians between the ages of 30 and 69 responded to the survey. Of those surveyed, 59% were physicians employed in a hospital, group practice or medical school.
Employed physicians’ financial needs
Half of the employed survey respondents revealed that they have their own set of unique personal financial challenges, in part due to their employment status. The top five reasons given for why their needs are different when compared to other professions include:
- Begin careers later in life than other professions (84%)
- Concerns over malpractice and other liability risks (56%)
- Medical school debt repayment delays savings (53%)
- Lack of time to spend learning about financial issues (51%)
- Not as financially savvy as other professions (28%)
Physicians’ retirement planning
While physicians have complicated financial needs, they understand the importance of having a financially viable retirement plan. 50% of respondents said that they are on track with their retirement planning whereas only 8% are ahead of schedule. The remaining 42% consider themselves to be “behind where they need to be” in the retirement saving process. Older physicians who may not have started saving for retirement may think that it’s too late in the game to start. That’s not necessarily true. There are ways for physicians to prepare for retirement later on in their career.
The top financial concerns for retirement planning were having enough money to retire (72%) and the ability to fund long-term health care expenses (65%).
When it comes to other long-term financial goals, employed physicians are preparing for a comfortable retirement for themselves or their partner, in addition to providing education for their children, minimizing estate taxes, ensuring an inheritance for children and grandchildren, and leaving behind a legacy gift for their community or profession.
To learn more about retirement planning for physicians, click here.
Financial and business acumen
It’s been said that doctors are notorious for having poor financial management skills. While there are certainly a number of financial choices physicians should avoid at all costs, 37% of employed physicians consider themselves knowledgeable about personal financial issues. However, over 50% of survey respondents feel they do not spend enough time on personal financial planning due to general lack of time.
The good news is that employed physicians (57%) are taking advantage of professional financial advisors to help make investment decisions. 54% of physicians feel that they are making the best personal financial decisions for themselves and their families in the areas of retirement, emergency planning and investments.
Types of insurance protection
Employed physicians have greater access to insurance benefits. 76% of employed physicians have life insurance through their employer and 73% have employer-sponsored disability coverage. But some physicians feel that what they have may not be enough. 45% reported concerns about having enough disability insurance and 44% were worried that they may not have enough life insurance.
For those physicians who may not have enough financial protection through their employer, the AAFP Insurance Program offers supplemental life and disability insurances to ensure you and your loved ones are well taken care of. In fact, 6% of employed physicians reported that a disability disrupted their income for a period of time.
What’s encouraging to see is that 31% of physicians plan to use long-term care insurance to pay for any long-term health care needs they may have in the future.
Physicians face many challenges when it comes to their financial preparedness. With the right financial assets, business acumen, and insurance protection, physicians in all specialties will be better equipped to take care of themselves and their families with the added peace of mind.
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