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Financial concerns--please help!

Discussion in 'Pre-Medical - MD' started by chienkuo, May 3, 2012.

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  1. chienkuo


    May 2, 2012

    I am planning to apply to medical schools for the 2012-2013 cycle. I am a 36 year old nontrad applicant making a career switch with a science PhD and lots of research experiences. I am determined about my decision but my girl friend is against it mainly due to financial concerns. I understand that ultimately it comes down to how much I want to be a doctor, but we are getting serious and I need some information and reality check to make a better decision and make my case stronger.

    I looked up the average indebtedness for most schools and they are around $140,000. I heard residents make ~$50000/yr. How about fellows? Attendings may make ~200k/yr. If these numbers are reasonable, how long will it take to repay the loan while living a not luxury but decent life style? How difficult is it to have family and kids during med school and residency?

    Another question: since I will be 37 when I start med school. I will be ~45 when I become a real doctor, with 15 to 20 years to work. From a purely financial point of view, is the investment of going to med school worthwhile?

    Please share your opinions and experience if you have thought about these or have gone through these. If these have been discussed in some old threads please point me to them. Thank you for your help!
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  3. V5RED

    V5RED MS-1 Lifetime Donor 5+ Year Member

    Jan 12, 2011
    How can anyone possibly answer the part in bold when you did not tell us your current income/benefits(such as a matching 401k)?
  4. FutureCTDoc

    FutureCTDoc 7+ Year Member

    Jan 17, 2009
    Sunny South Florida
    Do an DCF analysis and be conservative in your discount rate.
  5. chienkuo


    May 2, 2012
    My current income is $70k. I have saved 50k in cash and another $70k in home mortgage. I just started to save 10% with a 7% match in my 401k recently.
  6. octupus

    octupus inside a lobster suit! 2+ Year Member

    Jul 11, 2011
    Considering you have savings and make 70k a year, I highly doubt you'll graduate with only 140k in debt if you go anywhere but a state school. 140k is average... and that includes students who are have some help from parents and family, those who received merit-based or need based scholarships. Without those, you will be much closer to over 250k in debt from tuition and cost of living if you attend a private school.

    Is it worthwhile? Financially, I would say no. But if you hate being a research scientist and have a dying desire to subject yourself to 4 years of medical school and years of overworked residency days, then I suppose. I don't want to discourage you or anything, but personally, I wouldn't do it because at the age of 36, family would be my top priority. But is it yours?
  7. theseeker4

    theseeker4 PGY 1 5+ Year Member

    First, you will lose 70K in earning for each year you are in med school, and you will lose ~25K for each year in residency (70k - 45k). Assuming you are in school 4 years and residency for 3, that is -355k deficit, not counting the debt of med school. Let's say you will be 150k in debt at the end of med school, and you don't significantly reduce that during residency, you will be ~500k behind where you would be if you didn't go into medicine when you start earning attending wages. This assumes you have the minimum-length residency with no fellowship...add on to this if that isn't the case. Depending on your specialty and the future of reimbursements, where you work, etc. you could be earning anywhere from a little more than 100k to 300k + each year. Assuming 200k a year, ignoring taxes (which will be a factor, of course) you would break even after ~5 years of work as an attending. That is NOT factoring in investments you could make between now and then if you didn't pursue medicine, interest you are paying on your loans, the fact that you will be taking home a smaller portion of your gross income due to taxes, etc.

    Obviously this is a very simplistic and quick calculation, but it gives you a feel for how long it will take to break even, and THEN you can START saving for eventual retirement, living like a doctor, etc.
  8. ucbsmd

    ucbsmd 5+ Year Member

    Sep 28, 2010
    Right now there is Income Based Repayment(IBR) for Stafford and Gradplus loans where you pay 10% of your disposable income once you graduate. If you work for a nonprofit 503b for 10 years (many residencies and fellowships will work for this during that period of your training) and don't miss any payments, the remainder of your loan is discharged w/o tax penalty. If you don't work for a nonprofit, but make all your payments for 20 years, the remainder is discharged w/ tax penalty (you must pay income tax on the discharged amount). This program may not be around in 14 or 24 years when your would be finish the program, but it is an option at this time for loan repayment.
  9. chienkuo


    May 2, 2012
    Thanks for everyone's reply. If I do go to med school, based on the job market and the trend, is it fair to say that it is pretty secure that after graduating from med school and finishing the training I can find a job that pays ~$200K?
  10. theseeker4

    theseeker4 PGY 1 5+ Year Member

    It depends on a ton of things. What specialty? What location? Academic or private practice?

    For some specialties, it will probably be difficult to maintain 200K per year if you are in certain desirable locations. For some specialties, you won't reach 200k even now if you are in certain locales.

    For other specialties, it is not likely that they will decrease to that level in the foreseeable future, though in some locations salaries might. It is nearly impossible to say without a set specialty and location.

    Overall, there is nothing to indicate the number of doctors entering the workforce is going to jump up any time soon, so there isn't likely to be an over-saturation of doctors in general (there is already in some specialties), but all evidence points to across the board decreases in reimbursement, especially for certain specialties (probably less so for primary care).
  11. ChickasawPup


    May 4, 2012
    Tough call man. I hear you. What made you want to switch from PhD career?
  12. FutureCTDoc

    FutureCTDoc 7+ Year Member

    Jan 17, 2009
    Sunny South Florida
    The NPV is higher for medicine, but it depends on discount rates, specialty etc. Here is a conservative analysis:
    Increase of 5% Per Annum in science salary up to 105K, 3% to 140, 1% there after
    Cost of medical school 70,000
    Practice until 67
    Remain in current position for same amount of time
    Match a moderately competitive/moderately well remunerated specialty
    Discount Rate of 7%
    Residency is 5 Years
    Residenct salary increases by 5% Per Annum
    Medical Salary is flat:
    Age Sciences Med School
    37 $70,000.00 $(70,000.00)
    38 $73,500.00 $(70,000.00)
    39 $77,175.00 $(70,000.00)
    40 $81,033.75 $(70,000.00)
    41 $85,085.44 $45,000.00
    42 $89,339.71 $47,250.00
    43 $93,806.69 $49,612.50
    44 $98,497.03 $52,093.13
    45 $101,451.94 $54,697.78
    46 $104,495.50 $250,000.00
    47 $107,630.36 $250,000.00
    48 $110,859.27 $250,000.00
    49 $114,185.05 $250,000.00
    50 $117,610.60 $250,000.00
    51 $121,138.92 $250,000.00
    52 $124,773.09 $250,000.00
    53 $128,516.28 $250,000.00
    54 $132,371.77 $250,000.00
    55 $136,342.92 $250,000.00
    56 $140,433.21 $250,000.00
    57 $141,837.54 $250,000.00
    58 $143,255.92 $250,000.00
    59 $144,688.48 $250,000.00
    60 $146,135.36 $250,000.00
    61 $147,596.72 $250,000.00
    62 $149,072.68 $250,000.00
    63 $150,563.41 $250,000.00
    64 $152,069.05 $250,000.00
    65 $153,589.74 $250,000.00
    66 $155,125.63 $250,000.00
    67 $156,676.89 $250,000.00
    NPV $1,319,132.90 NPV $1,421,576.56
  13. chienkuo


    May 2, 2012
    The decision is driven by several things. Over the years, the research became less satisfying. Research funding is difficult to secure and the competition is fierce. There is not a great job security. As I get old the lifestyle I want also changed. Also there is a lot of politics in sciences (as other professions) and I am a back of the room guy and networking did not come natural to me.

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