Medical professionals spend their lives caring for others, but that doesn’t mean their own financial well-being should be left on the backburner. From the moment a doctor earns their MD to the day they hang up their white coat for good, medical professionals face unique financial hurdles, dilemmas, and questions.
Here are five key factors every medical professional should consider when putting together their financial plan.
#1: Student Loan Debt
Medical school students in Michigan will accumulate an average of $190,000 in student loan debt by the time they graduate. In comparison, the average student loan debt per student in America is $37,172.
Carrying five times the student loan debt as the average college graduate, medical professionals start their careers with a monumental financial burden. That’s why for most healthcare workers, paying down student loan debt is a top priority for the first five, 10, 15+ years of their career.
If you’re still working to pay down debt, this needs to continue to be a priority as you work with your financial advisor. Student loan debt that is not paid down timely and strategically can wreak havoc on your credit score, savings goals, home buying dreams, and retirement planning.
#2: Disability Insurance
For many medical professionals, establishing their own practice is a big goal. But pouring your resources and time into a private practice can leave you with little left in the way of savings - making disability insurance crucial for medical professionals.
For young doctors and healthcare workers as well, their high-earning years are still ahead of them. Should they lose the ability to work now, they’re facing an uphill battle with debt to pay down and a loss of income. Disability insurance can help doctors, surgeons, and other healthcare professionals protect themselves financially from this worst-case scenario.
#3: Robust Estate Plan
Your career is demanding, but that doesn’t mean you can neglect to prepare a plan to protect your future legacy. From determining what will happen to your private practice after your passing, to ensuring your spouse and children are well-taken care of, a robust and well-defined estate plan is critical for healthcare professionals.
#4: Malpractice Insurance
According to the American Medical Association, one in three physicians has faced a medical liability lawsuit in their career. That number jumps up to nearly half for physicians aged 55 and older.
You’re working in a high-stakes field, meaning a less-than-desirable outcome could incite legal action by a disgruntled patient or their family.
The good news is, around 68% of claims are dropped, dismissed, or withdrawn. However, they still cost medical professionals around $30,000 in defense costs on average. Having malpractice insurance can help reduce or eliminate this financial burden.
#5: A Well-Suited Financial Advisor
You know better than anyone that your financials are unique, and your needs can differ greatly from those of friends and family who work outside of the healthcare industry. As a result, your financial plan deserves the dedication of a financial advisor who specifically works with and knows how to help medical professionals.
Your advisor should accommodate your busy (and often erratic) schedule, address your student loan debt, assess your risk coverage options, and help prepare a legacy for your family. Additionally, you may want to work with someone who can help you establish a practice and transfer it to new ownership when you’re ready to retire. Finding a well-suited financial advisor can be one of the most impactful decisions you make regarding your financial plan.
As a healthcare professional, it’s important to know you have a thorough and encompassing financial plan that addresses all of your financial concerns. Pay special attention to these five things to help make the planning process productive and well-rounded.
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