Most psychiatrists live at or below their means, and more than half have a net worth of less than $1 million, according to the Medscape Psychiatrist Debt and Net Worth Report 2020.
An important caveat, however, is that the data for this year’s report were collected as part of the Medscape Physician Compensation Report 2020, prior to Feb. 11, 2020 – and before COVID-19 was declared a pandemic.
Although it will be some time before medical practices become accustomed to a new version of normal,
Among the lowest earners
According to the Medscape Psychiatrist Compensation Report 2020, psychiatrists are among the lowest earners of all physicians, earning $268,000 on average this year. However, that’s up somewhat from last year’s earnings of $260,000.
Among psychiatrists, 57% report a net worth (total assets minus total liabilities) of less than $1 million; 38% have a net worth between $1 million and $5 million, and 5% top $5 million in net worth.
Among specialists, orthopedists are most likely (at 19%) to top the $5 million level, followed by plastic surgeons and gastroenterologists (both at 16%), according to the overall Medscape Physician Debt and Net Worth Report 2020. The report is based on more than 17,000 physicians and spans 30 specialties.
By gender, more female than male psychiatrists have a net worth of less than $1 million (61% vs. 53%). The percentages are closer between female and male psychiatrists who have a net worth between $1 million and $5 million, at 36% and 41%, respectively. In addition, more male than female psychiatrists have a net worth above $5 million (6% vs. 3%).
As expected, the older the physician, the more money they have as earnings increase and early-career debt decreases. This is the case for psychiatrists, whose net worth over $1 million increased with age.
However, psychiatrists are among the most likely of all physicians to have a net worth of less than $500,000 (at 37%), which is on par with public health and preventive medicine physicians (also at 37%) and just below family medicine physicians (at 46%), pediatricians (44%), neurologists (41%), and internal medicine physicians (40%).
For nearly two-thirds of psychiatrists (63%), mortgage payments on their primary residence are the major expense; 39% of psychiatrists have a mortgage of $300,000 or less, and 12% have a mortgage topping $500,000; 31% have no mortgage at all. Six in 10 psychiatrists live in a house that is 3,000 sq ft or smaller.
Mortgage aside, other top ongoing expenses for psychiatrists are car payments (38%), school loan payments (28%), credit card debt (26%), and medical expenses for self or loved one (20%). At 28%, psychiatrists are toward the top of the list of all physicians when it comes to those still paying off loans for education.
Spending vs. saving
The average American has four credit cards, according to the credit reporting agency Experian. More than half of psychiatrists said they have four or fewer credit cards (35% have three or four credit cards, 20% have one or two cards, and 1% have none). A quarter of psychiatrists (25%) have five or six credit cards, and 19% have seven or more at their disposal.
Only a small percentage of psychiatrists (7%) say they live above their means; 53% live at their means, and 39% live below their means.
Most psychiatrists (62%) contribute $1,000 or more to a tax-deferred retirement or college savings account each month; 13% do not do this on a regular basis. Nearly two-thirds (65%) of psychiatrists contribute to a taxable savings account, a tool many use when tax-deferred contributions have reached their limit.
Nearly half of psychiatrists (47%) rely on a mental budget for personal expenses; 16% rely on a written budget or use software or an app for budgeting; and 37% don’t have a budget for personal expenses.
Three-quarters of psychiatrists did not experience a financial loss in 2019. Of those who did have a loss, the main causes were bad investments (6%) and practice-related problems (6%). Other factors were job loss (self or spouse/partner), real estate loss (4%), legal fees (3%), and divorce (3%).
Among psychiatrists who have joint finances with a spouse or partner, 51% pool their income to pay household expenses. For 14%, the person who earns more pays more of the bills and/or expenses. Only a small percentage divide bills and expenses equally, regardless of how much each makes (5%).
About 43% of psychiatrists currently work with a financial planner or have done so in the past, 40% never did, and 17% met with a financial planner but did not pursue working with that person.
A version of this article originally appeared on Medscape.com.