Most physicians don't save enough for retirement or take full advantage of savings opportunities offered through their employers, according to a new report from Fidelity Investments. While lack of time and knowledge about investing play into the problem, Fidelity's Money FIT Physicians Study found, many physicians simply can't afford to save.
As a result, nearly half of physicians (48 percent) in the analysis of 13,330 physician workplace savings plans are saving less than Fidelity's recommended 15 percent of their income for retirement, with an average savings rate around 9 percent.
What's more, the report found that 71 percent of physicians are not contributing to non-qualified plans, such as a 457(b), outside of work, while 48 percent are not maxing out their contributions to a qualified workplace plan, such as a 403(b) retirement savings plan.
Overall, 45 percent of physicians participating in the study said they cannot afford to max out their employer's retirement plan. Despite earning an average of $300,000 per year, according to Fidelity data, doctors are swamped with student loan debt and practice expenses.
A majority of physicians--61 percent--revealed they were at least a little confused about how to plan their financial futures. Nonetheless, the Fidelity study found that only 21 percent of physicians take advantage of available workplace retirement guidance, either due to lack of awareness or lack of time.
There are several ways physician employers can help improve these trends, which includes offering financial guidance and making sure doctors know about it.
Financial guidance shouldn't necessarily be limited to retirement advice, as doctors also stand to gain from a greater emphasis on financial matters of the "here and now," FiercePracticeManagment reported previously.
To learn more:
- see the announcement