About 2 Out of 5 Physicians Have $1 Million or More in Assets

Most physicians (58%) reported a net worth of $1 million or below this year, according to the Medscape Physician Wealth and Debt Report 2018.

But responses from more than 20,000 physicians in 29 specialties showed that 36% of them reported assets of $1 million to $5 million and 5% had more than $5 million.

"In my experience, the largest asset for most physicians is their retirement plan at work, 401(k)/403(k), so I would say the bulk of their assets are in cash and investment vehicles and not in their primary residence," Joel Greenwald, MD, CFP, from Greenwald Wealth Management of St. Louis Park, Minnesota, said in the report.

A physician's net worth includes investments, savings, and property equity minus debts, loans, mortgages, and other liabilities. For many, of course, salary lays the foundation. The average physician salary in 2018 — as profiled in the Medscape Physician Compensation Report 2018 — was $299,000. Specialists overall made about 48% more than primary care providers ($329,000 vs $223,000), though there were wide variations among specialties.

This survey found a high correlation between large incomes and large net worth. Plastic surgeons were the most likely to have a net worth of $2 million or more (44%), followed by radiologists (42%) and orthopedists (41%). The least likely to have accumulated $2 million or more were family medicine physicians, at 11%.

Dermatologists Top the $5 Million-Plus List

Responses showed dermatologists were the most likely to have assets of at least $5 million, at 17%, followed by orthopedists and gastroenterologists, both at 14%.

But on the opposite end of the scale, 39% of physicians have a net worth of under $500,000, which may have much to do with age. Younger physicians have much more debt, fewer years to accumulate wealth, and less equity in their homes.

Almost all physicians under age 35 had a net worth of less than $1 million (96%), whereas only 24% of physicians 65 years and older had accumulated less than $1 million. Among the 65 and older group, 57% had $1 million to $5 million.

Gender inequities were evident in the numbers. While 47% of male physicians had a net worth of more than $1 million, only 31% of female physicians did.

Gender inequities may also play into racial inequities in terms of wealth. African American/black respondents were the most likely to report assets of less than $1 million (81%) as opposed to 65% of Hispanics, 61% of Asians, and 55% of white physicians. African Americans/blacks also had a much higher percentage of women (60%), whereas other racial/ethnic physician groups were 30% to 40% female.

Student Loans a Heavy Load

With average medical school debt of $190,000 in 2016, it's no surprise many physicians are paying off debt well into their careers. Nearly half (46%) were still paying off loans between ages 35 and 49.

Urologists and family physicians were the most likely in the survey to be paying off student loans (43%), followed by emergency medicine doctors (39%). Gastroenterologists were the least likely to be paying off student loans (12%).

Few physicians reported living above their means. Half lived at their means, meaning they used up most of their income with little left over, and 43% said they lived below their means.

Those at the top of the list of those living above their means were public health and preventive medicine physicians, obstetrician/gynecologists, ophthalmologists, and internists, all at 9%. Those least likely to live above their means were otolaryngologists and orthopedists, at 2%.

Pathologists Are Biggest Savers

The biggest savers were pathologists: 57% reported they lived below their means. They were followed by ophthalmologists (56%), pulmonary medicine physicians (51%), and orthopedists and anesthesiologists (both 50%).

Despite having large differences in pay, primary care physicians and specialists had similar patterns of living below, at, or above their means, suggesting an overall sense of financial responsibility.

One third of physicians put at least $2000 a month into a tax-deferred retirement or college savings account. Only 13% do not regularly put money into such accounts. The amount put into such accounts increases with age. Of those who put more than $2000 a month into tax-deferred accounts, 43% are in the 50- to 64-year-old group.

Mortgages topped the list of what physicians were paying off: 63% reported paying on a mortgage. Next were car loan payments (40%) and personal college or medical school loans (32%). About 1 in 4 physicians (26%) were paying down credit card debt.

Most physicians (75%) did not experience financial loss in the past year. Of those who did, some of the top reasons were loss from practice issues (9%), stock market losses or bad investments (7%), and real estate losses (5%).

The sampling error for the survey was ±0.69% at a 95% confidence interval using a point estimate of 50%. Results from the 20,329 respondents, who were currently practicing US physicians, were weighted to the American Medical Association's physician distribution by specialty, state, and sex.

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