According to a survey conducted by Medical Economics, life continues to be a struggle for young doctors, those younger than 35. As a group, their financial situation didn't change in the four years from 2000 to 2004 (most current data available). Inflation increased about 9 percent over the four years, yet median family income for doctors younger than 35 rose only about 7 percent, to $160,000.

Federal taxes (excluding Social Security) takes a large bite out of doctors' earnings—typically around $26,000 for those under 35. Fifteen percent of young doctors income, $24,000 goes toward mortgages or rent and another 12 percent, $19,200 goes toward savings and investments. Social Security taxes would amount to $5,840 with Medicare contributions of $2320. Young doctors aren't cruising around in Porsches, either; the median cost of young doctors priciest car is $30,000 making for payments totaling approximately $7,000 per year.

Young doctors are likely to be married (78 percent of those under 35) and most have dependent children (a median of two). Home ownership adds to young physicians' total median debt, which is $250,000 for those under 35. Twenty-eight percent of doctors under 35 expect to take down their shingle and retire at age 65. But only about 15 percent of younger doctors say they're likely to retire after age 65. Young doctors have also become more realistic about retiring early, with only 12 percent aiming for 55, down from 18 percent in 2000.

Many young doctors expect to reach their retirement goals. Eighty-three percent of the youngest doctors expect their net worth to be $1 million by age 65. A majority of all young doctors are even more optimistic, with 54 percent of those under 35 expecting to be worth $2 million or more. Reaching these goals will take some work. "To have $1.5 million in a retirement plan by 65, a 35-year-old physician would have to consistently fund $42,000 each year," says Sherman L. Doll, a CPA and financial adviser from Walnut Creek, CA.

Seventy-seven percent of those under 35 participated in 401(k) s, which limit their individual contributions to $13,000 in 2004 ($14,000 in 2005). Young doctors are also taking advantage of traditional IRAs, which allow tax-deferred growth and Roth IRAs, which permit tax-free growth. Among those under 35, 28 percent have traditional IRAs, and 40 percent have Roth IRAs.

Seventy-three percent of the youngest physician group spent more in 2004 than they did the year before. This figure was up from 2000, when barely three-fifths of young doctors reported spending more. The bottom line is that whether young physicians are not spending extravagantly or just spending more, medicine doesn't provide an automatic ticket to the good life any more, and young physicians need to be more financially alert than ever. The good news for those 35 to 39, family income increased from $170,000 to $195,000, a nice 15 percent gain.

Source: Medical Economics - Financial Survey: How young doctors are doing today, by: Kathleen McKee, Oct 7, 2005.

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New family medicine residency graduates can expect to make around $125,000 after expenses.

The average starting salaries in internal medicine is $128,000.

The average starting salaries in pediatrics is $120,000.

According to one of the nation’s largest physician recruitment agencies, the average salary offer made to family physicians in 2004 grew from $144,000 to 146,000.

Source: http://www.aafp.org/x40945.xml