By: Kirsten Stoesser, MD
During medical school, I was talking with a fellow student about my interest in pursuing family medicine. I had reservations because I had heard that family physicians did not make much money. At the time I had no clue how much family physicians actually earned; I just knew it was ‘less,’ but assumed it was still ‘a lot’. My classmate made the astute observation that “It’s not how much you make, it’s what you do with it.”
It is true that family physicians are among the lowest paid of physicians on average pulling in $219,000 per year (per the 2018 MedscapePhysician Compensation Report). This amount pales in comparison to certain specialty fields, where the average is about $500,000 per year. However, it is still pretty good—a family physician income is within the top 5 percent of wage earners in this country.
Despite earning high salaries, nearly half of all physicians are still paying off their medical school debt well into their 40s, and nearly a quarter of all physicians over the age of 65 don’t have enough saved to be able to retire. Many physicians, quite simply, spend almost all that they earn. This applies whether one is in the top 1 percent of earners as a specialist or in the top 5 percent of earners as a family physician.
Having enough money set aside to feel secure, to be able to choose whether or not you work full or part-time, and to choose how long you will continue to work, are key foundations for wellness. Financial matters are not often included in formal medical student or residency education and are infrequently mentioned in discussions of physician and resident wellness, but financial health is a key component in overall wellness as a physician. Financial strength and wellness allow for the ability to live a life of freedom—freedom from worry about how to pay the bills, freedom to choose how to spend your time, and freedom to be able to experience the things that bring you joy.
Medical school students and residents make a lot of financial sacrifices during their training, often living at a level less than their peers who started careers straight out of college. After residency, there is a tendency to want to reward oneself for all those years of deprivation and to project the lifestyle that friends, family, colleagues, and society seem to expect of doctors.
But the fact is, most graduating residents are not yet financially well-off; most still have a large negative net worth, having carried forward an average school loan debt of about $190,000. Medical school and residency need to be the time that we, as educators and mentors, are teaching about strategies for paying down debts, saving, investing, and fiscal responsibility. Open discussion of financial topics has been neglected in medicine for far too long. It may be because of the misguided belief that as healers and humanitarians, we should not be seen as interested in our own financial security. This could not be further from the truth, for only in taking care of our own foundations, can we be most well to provide the best care for those we serve.
I went to a relatively inexpensive in-state medical school for my training. I was fortunate to be married during medical school to a spouse who was working, so we were able to stay within a tight budget to cover all of our living expenses without any additional loans. I paid off two years’ worth of medical school loans during residency. This required putting 50 percent of my take-home pay toward loans. I also saved monthly for retirement during residency and took on a moonlighting job to save enough for a down payment for a house upon graduation. It was challenging. We lived in pretty low-end apartments during medical school and residency. We barely ever ate out. We drove used cars. We camped for vacations. We delayed having kids. For several years after residency, we continued a pretty frugal lifestyle.
And now—now I feel secure knowing that we have enough. I’m not worried about being able to retire comfortably. I continue to save aggressively for retirement, setting aside about 20 percent of my gross salary, before adding in my employer’s contribution. I also don’t worry about paying for college. We have been saving for our kids’ college education since they were both infants and will have enough to cover their eventual college expenses. We also put 25 percent of our combined take-home salary into an emergency savings account each month. This creates an immediate cash reserve we can withdraw from whenever we have large expenses—trips to Hawaii, summer camp for the kids, a new car, fixing the roof, etc. We just build it back up again over the next few months and avoid paying interest on large purchases. A few weeks ago a pipe burst and our newly-remodeled basement flooded. My immediate thought (after racing to turn off the main water line) was, “well, at least we have enough money set aside to pay for this.” What could have been a really stressful situation was at most a nuisance and inconvenience. Having an emergency savings account has been a major factor in my own financial peace. Admittedly, we missed some opportunities along the way where we could have been even better off. I should have never invested in that robotics start-up company, but that’s ok. We are doing well enough. And really, many of the best experiences are still free—hikes outside, playing with my dog, seeing a sunset from the back porch.
The fact is, that by becoming a family physician, you can have a pretty awesome life. You will be in the top 5 percent of earners in this country. You could eventually choose to work part-time or retire early. You can retire with a net worth in the millions and maintain a pretty amazing lifestyle. You learned renal physiology—you can definitely teach yourself about personal finance. Read some financial books. Follow some financial blogs or podcasts—there are lots now. Ask colleagues about their experiences. If you do these things, you will be well on the way to financial wellness.
Kirsten Stoesser, MD, is a family physician as an Associate Professor in the Department of Family and Preventive Medicine and is the Associate Program Director of the Family Medicine Residency program.