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Nearly half of physicians behind in preparing for financial future
According to the 2013 Report on U.S. Physicians' Financial Preparedness released by AMA Insurance Agency, nearly half of the physicians who responded to a recent survey consider themselves behind in preparing for the financial future of themselves and their families. Survey results showed they reported gaps in personal financial knowledge and lack of confidence in financial decisions related to retirement savings, life and disability insurance coverage and estate planning, and that female physicians trend behind male counterparts in many areas of financial preparedness. The physicians polled indicated a healthy concern for the future, and especially retirement. The findings released today by AMA Insurance represent another dimension of the changing profile of today's physicians.
The report's findings were taken from a national poll conducted by AMA Insurance of physicians across all specialties and ages on a wide range of topics, including overall financial preparedness, personal financial planning, disability and other types of insurance, and retirement and estate planning.
Physicians have little time to spend on personal finances
"It makes sense that physicians would have little time to spend on their own financial situations – we work exclusively with them so we understand the constraints of their world, and their focus on their patients," said J. Christopher Burke, President and Vice Chair of AMA Insurance Agency, a wholly owned subsidiary of the American Medical Association (AMA). "However, the survey results indicate a deeper awareness by them that they should be spending more time on their financial preparedness overall."
More regular financial checkups required
The physicians polled indicated that only about half of them review their personal finances quarterly with another 29 percent reviewing them annually and 14 percent reviewing them as the need arises. Added to that, 54 percent of the respondents thought that the time they spend on personal finances is inadequate. These findings are reflected in several areas of the report, including the following.
- Outdated disability income coverage: Seventy-seven percent of the responding physicians state that disability income insurance is essential and 75 percent have a policy in place. However, 42 percent of those physicians have not reviewed their policies in the past five years or since they purchased it and physicians overall report they are not confident they are carrying the right amount of disability protection for their current needs.
- Lack of estate planning: Report results indicated that only 57 percent of the physicians have an updated will. Additionally, only about half of them have end of life, medical directives and a power of attorney in place and even fewer, 17 percent, addressed charitable contributions. Overall, 44 percent of the women physician respondents did not have an estate plan at all versus 31 percent of male physicians.
Only six percent ahead of schedule in retirement planning
In the AMA Insurance report, only 6 percent of the physicians polled said they are ahead of schedule in retirement planning. More the norm, nearly half of the physicians polled, particularly those under age 50, stated they are behind in their retirement finances. Family medicine and internal medicine physicians were more likely to feel behind in the poll.
Forty-one percent of them averaged less than $500,000 in their retirement savings portfolio with female physicians averaging significantly less than male physicians.
Physicians age 40 and under in a high stress zone
While physicians in all age groups have numerous concerns related to their financial preparedness, physicians age 40 and under were found to feel particularly squeezed, stating they are very concerned about a wide range of issues, including having enough money to retire, paying off medical school debt, funding children's college expenses, taking financial care of aging parents, estate planning, and having enough life insurance. They also have the least amount of savings in their retirement portfolio, averaging under $100,000.
More results on AMA Insurance Report available
Above are several key findings of The 2013 Report on U.S. Physicians’ Financial Preparedness. More highlights are available here.
About the Survey:
The national survey was sent to approximately 150,000 practicing and semi/retired U.S. physicians in December 2012. The respondent profile (2,365) showed representation across all ages (under 35 to 66+), a 70-30 male to female gender ratio, 26 percent family medicine and internal medicine specialists with 74 percent in other specialties and sub-specialties. Forty-nine percent of respondents work in a group practice, 16 percent in a solo practice and 15 percent work in a hospital. Fifty-nine percent of the physicians are employees versus 35 percent self-employed or a partner in a practice. Four percent are retired or semi-retired.
About AMA Insurance:
Established in 1988 as a wholly owned subsidiary of the American Medical Association, AMA Insurance Agency, Inc. specializes in meeting the insurance and financial services needs of America's 1,000,000 physicians, both AMA members and non-members. Authorized to conduct business in all 50 states, AMA Insurance offers a portfolio of physician-exclusive disability, life, health insurance, and retirement plans for individuals, medical group practices and other institutions. AMA Insurance’s national reach enables the agency to provide physicians with unique physician-focused coverage at competitive rates from top carriers. For more information, visit the AMA Insurance website at www.amainsure.com.
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