Primary Care Physicians vs. Specialists: The Impact of Fees

Updated on August 10th, 2021

With rising tuition prices, people are starting to ask whether it’s still worth it to be a physician. In fact, I was asked last week by a physician if a matriculating medical student can become a pediatrician and still “survive.”

To me, the answer is still an emphatic “YES!”. Sure, the pediatrician may not be able to live the lavish lifestyle of the neurosurgeon, but they can definitely pay off their loans in an efficient manner and build a healthy retirement. If they desire, they could even retire early.

In fact, I believe that if a primary care physician can nail four key investing principles, they’ll do better than the average specialist physician that does not follow these principles:

  1. Do a “financial fellowship” of 2-5 years following residency (living like a resident on an attending income)
  2. Save an appropriate amount (20-25% of gross income)
  3. Avoid short-term trading
  4. Invest in mutual funds with low fees

I’ve talked about the impact of a financial fellowship and short-term trading on the long-term health of your portfolio. In each model scenario, the primary care physician actually ends up with more money than the specialist in retirement, despite making significantly less.

Let’s look at how fees can impact the retirements of physicians.

The Impact of Fees

Consider a pediatrician, who finishes residency at age 29 and makes the average pediatrician salary of $205,000 a year. Compare her to a specialist, who finishes residency at age 32 and makes the average specialist salary of $360,000 a year.

Both physicians save 20% of their gross (pre-tax) income, or $41,000 for the pediatrician and $72,000 for the specialist.

Each physician makes 8% before fees on their returns, but the difference is that the pediatrician loses 0.1% of her fees to returns because she invests in index mutual funds, while the specialists lose 1.25% in fees each year to returns because he invests in actively managed mutual funds.

Both physicians will retire at age 65.


In our model, the pediatrician ends up with $8.13 million in retirement, slightly less than the specialist, who ends up with $8.76 million. In our hypothetical scenario, the specialist makes over $4 million more in salary over his career compared to the pediatrician, yet ends up with approximately the same amount of money in retirement.


  1. Student loans are ignored. This would widen the gap between the pediatrician and the specialist in retirement, as well as lower the final retirement numbers (by more than you would think, given the power of compound interest).
  2. Since each physician is saving 20% of their gross income, the specialist is able to live a better lifestyle during his working years than the pediatrician.

What do you think? Can a new medical student still become a pediatrician and “survive”?


  1. Saving is key…and living like a trainee but at the end of the day it is much easier as a specialist (Says the cardiologist). In fact, I am thinking about going part-time (60%) in the next 5 years and even at part-time will be earning similar to what a full time PCP earns. So there is benefit. That being said, you gotta do what interests you (whether it is peds, primary care, or cards) because otherwise it is too long of a haul.

  2. This is a great point. The pediatrician with a 4 or more year head start on the specialist could really make some hay while the sun shines in those first few years after residency. It has to be tough though watching the neurosurgeons, orthopods and interventional cardiologist drive their Ferrari’s into the hospital each day. As long as you can be content not inflating your lifestyle to compete with the specialists, it could be a very financially rewarding career choice.

    Tom @ HIP

  3. I agree with the numbers being able to work out for PCP’s and such, but my bigger concern would be job security and the encroachment of mid-levels. While I don’t think there’s much to worry about in the near future, I’d be concerned as a 20-something year old med student as to what the landscape will look like in 20+ years when they are in their 40’s and beyond.

    • There will always be some job uncertainty in the future for all specialties. In anesthesia, CRNAs have been a threat to the specialty for years, but you can still make a great living being an anesthesiologist.

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