Physicians' top financial goals include securing retirement funds, having enough funds to actually retire and funding long-term care expenses, according to American Medical Association Insurance's second annual Employed Physicians Financial Preparedness Survey.
AMA Insurance published its first report on U.S. physicians' financial preparedness in 2013 in order to better understand physicians' general attitudes about their financial preparedness. The 2014 Employed Physicians Financial Preparedness Report was compiled from survey answers by 2,073 practicing U.S. physicians in June 2014.
The following list relays physician trends, attitudes, and behaviors regarding their financial practices, according to the report.
Primary physician employment
1. Based on survey findings, the AMA estimates that 59 percent are employed in a group practice, hospital or medical school. The next largest source of employment is self employment with 24 percent and 13 percent of physicians are partners.
Unique financial needs
2. Fifty percent of employed physicians believe they have unique or more complicated financial needs than people in other professions. Thirty-five percent disagree and 15 percent are not sure.
3. Of the employed physicians who believe they have unique or more complicated financial needs than other professionals, the top three reasons are because physicians begin their careers later than other profession (84 percent), concerns over malpractice and other liability risks (56 percent) and medical school debt (53 percent).
Retirement planning
4. Physicians' top three financial concerns are having enough money to retire (72 percent), followed by being able to fund long-term care expenses (65 percent) and having the right estate plan (51 percent).
5. Fifty percent of physicians describe the status of their retirement financial plans as "on-track," while 42 percent report being behind where they'd like to be. Only 8 percent say they are ahead of schedule.
6. Forty-four percent of employed physicians of all ages reported having less than $500,000 saved for retirement. Twenty-four percent have between $500,000 and $1 million saved, and 7 percent have more than $3 million.
Long-term personal financial goals
7. The top three long-term financial goals physicians reported are providing a comfortable retirement for themselves, their spouses or partners, funding long-term health needs and providing education funds for their children and grandchildren.
Personal financial expertise
8. Only 37 percent of physicians consider themselves very knowledgeable or knowledgeable about their personal finance issues, while 63 percent say they are only somewhat or not very knowledgeable about their financial issues.
9. Fifty-three percent of employed physicians feel they spend an inadequate amount of time on personal financial planning, and 56 percent of these physicians attribute this to not having enough time to dedicate to it.
10. Fifty-seven percent of employed physicians said they use a professional financial advisor.
11. Only 28 percent of employed physicians feel very confident they are making the best personal financial decisions for themselves and their families.
Family finances
12. Sixty-seven percent of employed physicians earn more than 75 percent of their family's total income.
13. Seventy percent of employed physicians have a liquid emergency savings fund. Twenty-six percent of employed physicians keep less than $25,000 in their emergency savings fund, and another 26 percent keep between $25,000 and $49,999. Fifty percent say their emergency savings fund is adequate, while 34 percent believe theirs is inadequate.
Insurance protection
14. Ninety-one percent of physicians have malpractice insurance through their employer. Seventy-six percent have life insurance and 73 percent have disability insurance through their employers.
15. In the event of a chronic illness or disability requiring living assistance, 31 percent of employed physicians plan to use long-term care insurance to pay for their long-term care, while 27 percent plan to use personal funds from their retirement savings. Thirty-three percent say they don't know how they would pay.