The Critical Financial Years for Young Physicians

By Michael J. Searcy

The average age of a first-year practicing physician in the U.S. is 31. This puts young physicians nearly 10 years behind their same-age peers when it comes to their number of earning years. Because young physicians can quickly go from very low pay during school and residency to very high amounts of pay, the first 10 years in practice are critical for building a solid financial foundation.

Lifestyle of Physicians

Young physicians are extraordinarily busy. Not only are they getting their careers started, they often do so with many other factors that require their time and attention. Nearly 47% of young physicians work 51-80+ hours a week and 60% are working parents. They own homes, sometimes own a second vacation home and are their family’s primary breadwinner. They face a delayed start to their earning years, medical school debt, malpractice and liability concerns, and lack of time and financial training to get them started on the right foot. According to the 2015 Report on U.S. Physicians’ Financial Preparedness, young physicians ranked their long-term goals as:

1. Providing a comfortable retirement for self/spouse

2. Providing education funds for children/grandchildren

3. Funding long-term health needs for self/spouse

4. Minimizing estate shrinkage/taxes

5. Ensuring an inheritance for children/grandchildren

6. Leaving a legacy gift to community or profession

Financial Preparedness

When it comes to financial responsibility, 59% of young physicians say they are solely responsible for the financial planning decisions of their family but only 5% consider themselves very knowledgeable about financial issues. Take into account the 53% who feel they don’t spend enough time on financial planning because they don’t have the time and they don’t consider it their area of expertise, you can see how young physicians can quickly get behind during those critical first years. So how are physicians supposed to juggle their professional responsibilities, parental responsibilities and financial responsibilities?

About half of young physicians today work with a financial advisor. Results of this decision show that those who do work with an advisor have more money saved, are more diversified in their investments, have adequate emergency savings and feel more confident in their decisions. Finding an advisor who has experience working with medical professionals may help ease concerns as they should understand the lifecycle of a physician and the challenges faced along the way. From the first years as a medical professional, through a seasoned career and into retirement, physicians will face many questions regarding their financial health that others in different careers never have to consider.

Consider the six goals young physicians said were important to them. Accomplishing those goals will not happen by chance. It takes planning and incorporating the right tools to keep those goals as priorities in life and to make sure they are realized. As a young physician getting started, are you working with an advisor to help you take care of the items outside your expertise? For a free guide to finding an advisor that’s right for your needs, visit

Sources Available Upon Request

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Searcy Financial Services, Inc.

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on November 4, 2016 by Searcy Financial Services, your Overland Park, Kansas Fee-Only Financial Planner and Investment Manager.