Physicians are not setting aside enough for retirement, study finds
The study found most felt they simply can’t afford it.
Despite doctors being among the most highly paid professionals in the workforce, a new study by Fidelity Investments shows their retirement plans may not be the picture of perfect health.
In their newly released Money FIT Physicians Study, Fidelity Investments said 48 percent of physicians are not setting aside the recommended rate of 15 percent of income and are saving an average of 9 percent instead.
The report, which analyzed the savings plans of 13,330 physicians, also found 71 percent are not contributing to non-qualified plans outside of work. The numbers are actually worse for female physicians than male physicians, with 58 percent of women doctors not maxing out their workplace plans compared to 45 percent of male doctors choosing not to take full advantage.
As for the reasons, the study found most felt they simply can't afford it.
Despite a reasonably high level of pay -- Fidelity data shows doctors make an average of $300,000 a year -- the investment service says 84 percent of graduated medical students shoulder student debt averaging more than $176,000, not to mention high costs related to their individual practices.
The study also noted a lot of doctors, 61 percent of those in the study, are confused about how to invest for the future and still more are not taking advantage of financial guidance offered in the workplace. Many of them said they just don't have time to take a look.
Fidelity, which offers certain retirement investment products, said physicians can take several steps to better plan for retirement.
For starters, Fidelity said physicians should seek professional financial guidance at least once a year for a retirement plan checkup. They should also try to maximize contributions to qualified retirement plans, such as a 403(b) retirement savings plan. The IRS limits allow employees to contribute up to $18,000 for those younger than 50 years old, and $24,000 for those older than 50.
"While physicians are expected to be confident and knowledgeable about their medical specialty; that confidence doesn't always extend to financial matters," said Alexandra Taussig, senior vice president of Fidelity Investments, in a statement. "Healthcare employers can play an important role in addressing physicians' financial health by actively promoting the opportunities to get guidance through their workplace retirement savings plan and encouraging annual financial checkups."
