Financial Preparedness, Loan Management, Retirement

Young physicians begin first year of practice with estimated $71K in ‘lost savings’

October 19, 2015

AMA Insurance’s latest study, 2015 Report on U.S. Physicians’ Financial Preparedness: Young Physicians Segment, paints a clear picture of today’s physicians under age 40, and their unique financial challenges.

Young physicians’ top personal financial concern is having enough retirement savings, followed by enough savings for their children’s education – but they typically have minimal savings. In short, they are at a serious financial crossroad as they jump-start their career.

The report includes analysis and practical financial strategies from Jerry Moran, a senior wealth strategist with Millennium Brokerage Group and registered financial advisor with The Leaders Group, Inc.  

“Physicians start their first year of practice 10 years behind undergraduate peers in other professions and as a result, have lost an estimated $71,0001 in savings,” says Moran. 

Help to gain a strong financial foothold ASAP

It’s crucial to make up for that delayed earning power and lost savings in their first five to 10 years of practice.  But the picture is complicated.  They are at the point of experiencing an increased income, but also increased family responsibilities, and most are still paying off the heavy debt of a medical school loan.

Using insights from our data, Jerry developed a practical five-strategy approach to help young physicians gain a strong financial foothold as soon as possible. 

“We don’t know what we don’t know about finance...” 

We asked several young physicians for feedback during the development process. Here is just one of the encouraging comments we received:

“I think the Five Strategies and ‘years of lost savings’ are spot on,” said John Corker M.D., Emergency Medicine resident at Parkland Hospital in Dallas, TX.  “The report definitely resonated with me – we [young doctors] don’t know what we don’t know about finance and simply don’t have the time to learn it. I hope the report spurs more of us to a better financial future earlier.” 

A comprehensive profile with challenges, opportunities

We hope you also find the report of value. It’s comprehensive, covering family finances, financial acumen, insurance protection, home and family, and future plans. There is also a segment on financial preparedness by gender. 

The full report uses insights gained from three national surveys conducted by AMA Insurance of 1,937 young physicians.

It’s been our privilege to learn more about this generation of American physicians and their challenges and opportunities. As usual, we welcome your feedback.

Denise S. Friday, CLU
Vice President Sales & Marketing, AMA Insurance

1 Assumptions: Based on a $60,000 year salary; 401k plan with an employer match of 50% on first 4% of contributions; employee saves 4.0% ($2400/year) in years 1-5; and 10.0% ($6000/year) in years 6-10. Projected return 6.00%.

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