How does your state rank when it comes to opportunities, risk and financial stability specifically for doctors? First of all, let’s think about the things that doctors tend to have in common:
- Doctors are entrepreneurial. They are either in private practice or would like to have a private practice someday. Many who are W-2 employees are employees of private practices and therefore benefit when their private practice does well. They therefore benefit from environments in which it is comparatively easy to form a business, with relatively low regulation.
- Doctors have high incomes. Yes, it may not be high relative to the education, tuition expenditure, effort and talent it takes to become a doctor and remain in practice. But in raw dollar terms, doctors earn decidedly more than the median worker, in just about any state or specialty. They would benefit from states with a relatively low income tax burden.
- Doctors are sued a lot. Yes, there are pros and cons to the kind of tort reform most physicians’ advocacy organizations would like to see (and which the Trial Lawyers Association vociferously opposes). But they are frequent targets for lawsuits, and not just for medical malpractice. Doctors therefore benefit from living in states where there is substantial bankruptcy protection against creditors, and which have high hurdles in place before a lawsuit can turn into a court order actually attaching personal assets.
Best States for Doctors
So what are the top states where doctors can prosper? Here are a few nominations for best states for doctors:
Texas. Texas has no state income tax, and allows those in bankruptcy to shelter an unlimited amount of assets in home equity – (provided you’ve lived in the home long enough). Texas has relatively high property tax rates, but it also boasts a number of the top-growing real estate markets in the country.
Meanwhile, Texas has done a good job of holding punitive malpractice judgments down. The trial lawyers don’t like that, but it helps to limit the cost of malpractice insurance.
The cost of living in Texas is very low, for the most part, so if you’re looking to hold your lifestyle costs down while you pay off your student loans or meet other financial goals, Texas is a good choice.
Florida. Like Texas, Florida has no state income tax. It also has very debtor-friendly asset protection laws – you can shelter an unlimited amount of assets in equity in your primary home, and also in life insurance cash value and annuities. They are not considered personal assets in Florida and therefore creditors cannot seize them, even with a judgment in hand. Permanent (cash value) life insurance is frequently a solid financial strategy for physicians for this reason.
Florida also has a very large elderly population – which blossoms anew each fall as the ‘snowbirds’ arrive from the north in droves to enjoy Florida’s beautiful winter weather. Naturally, these older folks need doctors, and so their presence contributes to increased demand for medical services. Furthermore, you can’t beat the golfing!
Mississippi. Your earnings will go a long way in Mississippi. The state ranks extremely high for having a low cost of living and an overall low tax burden. Malpractice payouts are also among the lowest in the country, which, in turn, helps hold down medical malpractice insurance premiums.
Overall, it’s a relatively business-friendly state. It’s also a relatively poor state, however. So perhaps this isn’t the state where a plastic surgeon is going to get rich doing celebrity preservation. But in any other field you’ll be well-compensated, given the low cost of living, for doing a lot of good.
Alaska. Alaskan doctors make money. The average annual compensation for primary care physicians tops $310,000, according to Medical Economics. Medicaid fees are over twice the national average. And the state literally pays you to live there: There’s no state income tax. Instead, every Alaskan resident receives surplus revenues from the Alaskan oil industry.
If you have a spirit of adventure and you enjoy the great outdoors, there’s nowhere better. Outdoor recreational opportunities abound. Furthermore, doctors are frequently earning substantial relocation bonuses – up to $50,000. That will take a chunk out of your student loans, or it will more than take care of a down payment on a house, walking right in the door. On the other hand, chances are you’re going to want a solid SUV.
And don’t buy too much house with your money. Remember, you’re gonna have to heat it.
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