Do you have the 6 traits of a financially prepared physician?
Physicians work in one of the busiest professions, and finding time to dedicate to personal finances can be challenging. Would you classify yourself as financially prepared or behind schedule?
In a new study of the financial preparedness of U.S. women physicians, AMA Insurance revealed the top six traits of financially prepared women physicians—those who consider themselves “on track” or “ahead of schedule” when it comes to retirement readiness.
Here are the six traits of a financially prepared woman physician:
- Considers her retirement portfolio “on track” or “ahead of schedule” for her age and career stage. On average, more than one-half of women physicians feel as though their retirement savings are “on track,” including 7 percent who consider themselves “ahead of schedule.” Financially prepared women physicians have significantly more retirement savings than peers who consider themselves “behind schedule.” More than one-third of financially prepared women physicians have more than $1 million in their retirement portfolio. If you need to get started, read about retirement savings strategies for physicians who start late and tips to get started during residency.
- Keeps a liquid emergency fund adequate for her current lifestyle. Nearly 80 percent of financially prepared women physicians have a separate, emergency-only fund, and more than one-half keep at least $50,000 available in this fund. In fact, nearly 60 percent say they could write a $25,000 check to cover an emergency expense “with no problem.” Two-thirds of women physicians would need to move funds or liquidate assets if faced with a large emergency expense, and about 7 percent said they simply couldn’t do it.
- Feels adequately protected in the event of a disability. Most financially prepared women physicians feel prepared to handle their finances if they became disabled and couldn’t practice medicine. Financially prepared women were more likely to have recently revisited their disability insurance policy and were confident that they carried enough disability insurance to cover their current lifestyle. About 70 percent of employed women physicians receive disability insurance through their employer. Financially prepared employed women physicians also were more likely to know whether their employer pays the premium on that insurance and whether their benefit would be taxable. Read what you need to know about disability insurance.
- Uses a professional financial advisor. Two out of three financially prepared women physicians use the services of a professional financial planner. Most said they found their planner through a referral, and the majority said they are “satisfied” or “very satisfied” with their choice. Those who don’t use an advisor said the main reason is because they haven’t found someone they trust.
- Has updated will and medical and end-of-life directives in place. Since most women physicians are the breadwinners in their families, end-of-life and medical directives and wills are important. More than one-half of women physicians who consider themselves “behind schedule” do not have any elements of an estate plan.
- Feels more knowledgeable and confident about personal finances. Most financially prepared women physicians are either “very confident” or “somewhat confident” in their ability to make financial planning decisions, while nearly one-half of those women physicians who are behind in planning said they aren’t very confident.
Find more physician-exclusive research in the AMA Insurance Research Center.