An annual survey of resident physicians conducted by AMA Insurance found that the top financial concern of current residents is paying off medical school loans.
The survey, which included 1573 resident physicians from across the United States (54% male, 46% age 25-29), identified the top 5 personal financial concerns. In addition to paying off medical school debt (34%), US residents are worried about having enough money to retire (25%), funding college expenses for their children (21%), financially providing for elderly parents (19%), and having enough of the right disability insurance in the event of an injury (19%).
When it comes to saving for retirement, 62% of those surveyed considered themselves behind; only 4% are ahead and 34% feel that they are right on track. Just over 45% of respondents shared that that had less than $25,000 in retirement savings at the time of the survey.
More than 70% of survey respondents have current medical school debt (71%); 50% of those indicate that their debt is upward of $200,000.
Despite these numbers, only 27% of physicians are using a professional financial advisor. Of those who are not (73%), the top barrier is a lack of time (34%), followed by cost (23%), not finding an advisor who is trusted (15%), and feeling like they would rather do it themselves (14%). One percent of respondents indicated that they had used a financial advisor in the past, but did not find enough value in it to continue doing so.
Allan Phillips, a financial advisor at Taylor Wealth Solutions and a member of the AMA Insurance Physicians Financial Partners Program, shared the top 5 financial moves that residents should make:
- Protect your most important asset: human capital
- Residents should ensure that they have disability, life, and umbrella liability insurance.
- Manage debt — regardless of the source.
- Residents should evaluate their debt in context. Paying off loans as quickly as possible is not necessarily the top priority.
- Realistically handle spending, saving, and investing
- Establishing a realistic budget can alleviate concerns about saving for future children or retirement.
- Partner with a financial planner
- Finding a trusted financial advisor should be a top priority, even during the first year of residency.
- Prepare for your first contract
- Good financial habits can take some of the pressure off when evaluating your first employment contract.
The complete AMA Insurance report can be found here.
AMA Insurance Agency, Inc. 2017 Report on US Physicians’ Financial Preparedness. Resident Physician Segment. https://www.amainsure.com/research-reports/2017-financial-preparedness-resident-physicians/index.html?page=1. Published June 2017. Accessed August 2017.