Half of physicians under age 50 say they don’t spend adequate time on family financial planning and are not entirely confident they are making the best decisions for their family, according to the recent 2013 Report on U.S. Physicians’ Financial Preparedness.
When it comes to retirement planning, 48 percent of the 2,365 physicians responding to the AMA Insurance Agency survey said they feel behind where they’d like to be, 47 percent said they are on-track, and 6 percent responded that they are ahead of schedule. Two of five doctors have less than $500,000 in retirement savings.
The key difference of the 6 percent who consider themselves ahead of schedule is a deeper knowledge of personal finance issues as opposed to age, gender or specialty.
Family medicine and internal medicine physicians, as well as female physicians, were more likely to feel they are behind where they want to be, the study found.
Half of the doctors interviewed said they were knowledgeable or very knowledgeable about personal financial planning, and another 37 percent said they were somewhat knowledgeable. Only 13 percent said they were not very knowledgeable.
Part of the issue may be that a majority of doctors believe they have unique or more complicated financial needs than other professions, with 75 percent of doctors under age 40 believing that is true. And, only half of physicians under the age of 50 say they use a professional advisor to assist them with personal financial and retirement planning matters.
The study showed that physicians have a healthy concern for their future. Their biggest worries are about having enough money to retire and funding their children’s college expenses. At older ages, estate planning and long-term care became greater concerns.
Perhaps surprisingly, 35 percent of doctors interviewed have no estate plan at all, and nearly half don’t have an updated will or end-of-life directives. Female physicians are significantly behind their male counterparts in all areas of estate planning – 44 percent of female doctors have no estate plan and 54 percent don’t have an updated will.
The study underscores the need for physicians to budget time for personal financial planning.
“It makes sense that physicians would have little time to spend on their own financial situations,” said J. Christopher Burke, M.B.A., president and vice chair of the AMA Insurance Agency. “However, the survey results indicate a deeper awareness by them that they should be spending more time on their financial preparedness overall.”