Doctors Struggle to Save for Retirement Despite High Salaries

What’s up, doc? A new report says that despite high average salaries, physicians aren’t saving enough for a comfortable retirement.

New research from Fidelity Investments found that the average physician, despite having an average salary of just under $300,000, will only have retirement income of 56 percent of their pre-retirement earnings, compared to the 71 percent Fidelity recommends.

“We don’t think that physicians are in grave danger of not being able to survive, but the question is, what kind of retirement do you want to have,” said David Martin, vice president of strategy and business management at Fidelity Investments.

Years of medical school followed by low-paying residencies mean that doctors start saving for retirement an average of seven to 10 years later than other people in their age bracket.

“They start kind of behind the eight-ball,” said Jason Dyken, president and CEO of Dyken Wealth Strategies.

Many new doctors are also burdened with six-figure med school loans, said Dyken, a former doctor himself. “Even though they make good salaries, they have a lot of debt they have to take care of,” he said.

Doctors often put off big purchases like homes and new cars until they’re established in their careers, creating “a lot of pent-up demand for buying things,” Martin said.

“Culturally, they really feel after those years of medical school… [they] are ready to experience a little bit of life and experience some comforts of life, and sometimes they go a little bit overboard, particularly on the house,” said Mike PeQueen, managing director and partner at HighTower Advisors.

There’s also a subtle kind of peer pressure that encourages presenting the appearance of being well-off.

“There’s this perception — doctors feel like they have to live a certain lifestyle,” Dyken said, “in order to be seen in the community as a successful professional.”