What is the Average Optometrist’s Salary? Key Financial Insights from the 2024 Optometrist Income Report

Defocus Media Podcast Network

Get ready for an eye-opening episode on the Defocus Media Podcast with “ODs on Finance: The State of Optometry’s Financial Health.” Join Dr. Aaron Neufeld, an expert optometrist and co-founder of ODs on Finance, as he unravels the findings from the “ODs on Finance 2024 Optometrist Income Report.” This episode dives deep into the financial state of the optometry field, covering pivotal topics such as the increase in gross annual pay, the promising average net worth of optometrists, the alarming trends in retirement savings, the peak levels of student loan debt, and how practice ownership can lead to the most favorable financial outcomes.

In addition to analyzing gross pay and net worth by state and region, we explore how these metrics vary across different races and genders, shedding light on the economic disparities within the community. Furthermore, discover the most lucrative “side hustles” that optometrists are turning to to supplement their income.

This comprehensive discussion is packed with invaluable insights for any optometrist looking to enhance financial knowledge, optometry students assessing the fiscal realities of their future careers, or practice owners aiming to optimize their financial strategies. Dive into the detailed financial management lessons with Dr. Aaron Neufeld and learn how to navigate through the complexities of the financial landscape to secure a thriving career in eye care. This episode is your essential guide to understanding the future of optometry and mastering the economics of optometry—don’t miss out!

What’s Covered:

• Understanding Optometrist Income with Dr. Aaron Neufled
• Lesson 1: Increasing Gross Annual Pay for Optometrists
• Lesson 2: The Promising Average Net Worth of Optometrists
• Lesson 3: Insufficient Retirement Savings Among Optometrists
• Lesson 4: Escalating Student Loan Debt Challenges
• Lesson 5: Practice Ownership as the Optimal Route to Financial Success

Understanding Optometrist Income with Dr. Aaron Neufled

Dr. Darryl Glover:

Hey man, thank you. I’m super excited today because we’re going to dive into finances, right? You know, before we kicked off this live stream and podcast, we were chatting about how often we, as optometrists, just focus on our work in the exam lane and keep producing. But sometimes, I think we neglect to sit down and consider the future. What are we producing for? Yes, we all want a thriving practice, but what should that look like both personally and professionally in terms of our finances?

Today, I’m thrilled because we’re going to cover a couple of things. First, we’ll discuss what optometrists are currently doing with finance. We’ll also touch on an article you wrote that really woke up the industry regarding the financial state of optometry—is it a financially viable profession? Let’s kick things off by having you introduce yourself. Some might not know who you are and all the great things you’ve done, my friend.

Dr. Aaron Neufeld:

Absolutely, Darryl. I own a few private practices in the Bay Area, California—one in Los Altos, one in Mountain View, and a specialty lens clinic in Milpitas. Besides patient care and managing those practices, I also co-founded ODs on Finance in 2018. It started as just a small group of ODs talking about finance, and now it’s grown to include about 26,000 ODs, whether they’re in our Facebook group or subscribe to our newsletter. We’re here to provide financial resources to help push our profession forward.

Dr. Darryl Glover:

That’s a great overview of what this platform is all about.

Dr. Aaron Neufeld:

Yeah, the core purpose is to provide financial resources so that we can achieve financial freedom, both in our practices and in our personal lives. We started with a lot of articles and guides, and we still produce those. We’ve released two books—one back in 2018 and a recent one for students, which is now available in optometry schools across the U.S. Additionally, we host a CE event every two weeks, always via webinar, which includes about four to five hours of content and is always free. We also facilitate group buys for practice owners, offering vendor deals and practice management tools. Beyond that, we provide services like practice financing and student loan refinancing.

Our latest project, which we’re excited to announce and will launch soon, involves merchant services. We’re working directly with one of our vendors to provide what should be the most effective rate out there.

Lesson 1: Increasing Gross Annual Pay for Optometrists

Dr. Darryl Glover:

Let’s dive into this article you wrote, which is truly a game-changer. I have it right here—the state of optometry. You’ve broken down five crucial lessons that every eye care professional, especially optometrists, should be aware of and consider deeply. Let’s jump right into it, starting with the first lesson about the increase in gross annual pay. Can you elaborate on that?

Dr. Aaron Neufeld:

Absolutely. When we began this project—the income report—we knew there were already several income reports out there. However, what stood out in those reports was the relatively small sample sizes—some had 200, 300, and even one with 500 responses. Considering we have a community of 26,000 ODs, we thought, why not leverage this and try to gather more extensive data? So, we conducted a survey and initially, about 2,000 ODs submitted their data, though we had to narrow it down to 1,900 usable entries after verifying the completeness of their responses.

What was most surprising was that the average income turned out to be higher than previous reports suggested. We’re not entirely sure if this is due to the larger sample size, geographical distribution, or perhaps an inherent bias since those involved in ODs on Finance might be more proactive about their financial growth. However, the good news from our findings is that the average compensation for ODs was notably higher than previously reported. We can see from this graph that there’s a steady increase in income every five years, which could be due to optometrists advancing in their careers, negotiating better salaries, or moving into ownership roles.

This is uplifting for our industry, especially given the longstanding concern that optometrists don’t make enough money considering the debt incurred from four years of additional schooling. Thankfully, that conversation is becoming less common as compensation improves.

Dr. Aaron Neufeld:

Interestingly, the highest earnings are typically seen in the Southeast, likely due to a lot of rural optometry practices. In rural areas, where there are fewer practitioners, there’s higher demand, which often allows ODs to see more patients and potentially charge more.

Lesson 2: The Promising Average Net Worth of Optometrists

Dr. Darryl Glover:

Moving on to lesson number two from your chart here, let’s talk about the promising average net worth of optometrists. Let’s delve into that.

Dr. Aaron Neufeld:

Yeah, when we conducted the survey, I initially thought the net worth of optometrists would be lower, but it’s actually quite high. The average, if I recall correctly, was around $800,000. You might have the exact figure on your slide there, and $800,000 is pretty impressive. We also looked at a medical doctor salary survey conducted by the White Coat Investor, which mainly focuses on MDs. Their average net worth was about $1.1 million. Considering that our profession often gets pegged as earning less, we’re doing quite well, with only $300,000 off.

That’s why I emphasized this in the article. I believe we’re doing well, but we can do better. With effective saving and investing strategies, and by reducing our debt, we can increase our net worth. As we continue to educate newer ODs coming out of school on how to manage student loans, negotiate better salaries, and save and invest wisely, I anticipate seeing this average continue to rise.

Dr. Darryl Glover:

And that’s what I love about ODs on Finance. You have a diverse group of optometrists contributing different investment strategies, and it’s always enlightening to see the range of financial approaches across the United States. It opens up opportunities to discover something you might be missing out on, and it’s invaluable to have that resource for deeper exploration outside of those discussions. I really value that.

Dr. Aaron Neufeld:

Absolutely, thank you.

Lesson 3: Insufficient Retirement Savings Among Optometrists

Dr. Darryl Glover:

So, moving on to Optometry Income Report lesson number three, it appears that optometrists are not saving enough for retirement.

Dr. Aaron Neufeld:

Yes, it’s exactly as it sounds—optometrists do not save enough for retirement. This became evident a few years ago when we started ODs on Finance. I remember working at a corporate location before buying my practice, and a colleague who was an 82-year-old optometrist shared that he was still practicing because he hadn’t saved enough for retirement. That was a wake-up call for us. We realized that despite being considered high earners, too many of us were not financially prepared for retirement. Initially, we found that the average retirement savings for ODs was around $300,000, which is far from sufficient.

Ideally, we want to see a minimum of $2 million to ensure a comfortable retirement. Considering inflation and the potential increase in medical costs as we age, even $1 million, which some closer to retirement might have saved, isn’t enough. We need to aim for at least $2 million to cover all uncertainties and healthcare costs in retirement.

Dr. Darryl Glover:

Let’s discuss some strategies for achieving this.

Dr. Aaron Neufeld:

Absolutely. We advocate a four-step process. First, if you have access to a 401(k), especially with a match, make sure to take full advantage of it. That’s leaving free money on the table if you don’t. Secondly, consider a Roth IRA. Many of us will be above the income limit for a direct Roth IRA, but a backdoor Roth conversion is a viable option. You can contribute around $7,000 annually, which is tax-advantaged. Third, if available, use a Health Savings Account (HSA), which we like to call the ‘stealth Roth IRA.’ It’s another tax-advantaged way to save for healthcare or retirement.

Finally, open a brokerage account for investing in a taxable account. Stick to conservative investments, like an S&P 500 index fund. Keep it simple and let it grow over time. The key here is consistency and discipline in your investing strategy. Plan it out, stick to it, and you’ll be on your way to a secure retirement.

Lesson 4: Escalating Student Loan Debt Challenges

Dr. Darryl Glover:

I love it, man. And for those just tuning in, we’re speaking with Dr. Aaron Neufeld, and we’re diving deep into the optometrist income report. Now, let’s address another pressing issue—student loan debt is at an all-time high.

Dr. Aaron Neufeld:

Yeah, it’s a concerning situation but one we must face. When we conducted the poll, we found that the average student loan debt is around $240,000 across the board. However, for new graduates, those who are 0 to 5 years out, it averages around $300,000. That’s a significant increase compared to when I graduated—I had about $160,000 or $170,000 in debt. With rising costs, student loan debt at graduation has increased. However, students shouldn’t be scared by these numbers.

If you have a solid plan and are disciplined in your approach, you can manage even the most daunting debts. There are several options available now, including safe repayment plans introduced by the government, as well as the traditional route of refinancing. It’s about doing your research, educating yourself, and understanding what you’re getting into with the profession. And remember, the need for ODs is growing. The population is increasing both in the U.S. and globally, meaning more patients and more opportunities, which should lead to higher salaries that can help offset these higher student loan costs.

Dr. Darryl Glover:

Absolutely, and for any undergraduates thinking about entering optometry, it’s crucial to see beyond the daunting debt figures. There’s substantial job security, and the opportunity to help people with their most vital sense—their sight—is incredibly rewarding. So don’t overlook this profession; it still offers amazing potential.

Lesson 5: Practice Ownership as the Optimal Route to Financial Success

Dr. Aaron Neufeld:

Let’s pivot to our final lesson. Practice ownership leads to the best financial outlook. I want to emphasize this because there’s a common misconception that private practice is dying, but that’s far from the truth. Practice ownership on average sees an owner earning about $100,000 more than an associate. Specifically, owners of solo practices average around $200,000, while those with three to four doctors under them can take home an average of nearly half a million.

Private practice isn’t dead. However, the approach to private practice has evolved. It’s no longer just about basic eye care; specialties like dry eye, specialty contact lenses, and boutique optical are where differentiation lies. This is how you keep your patients returning and maintain high revenue per patient, ultimately leading to profitability.

Dr. Darryl Glover:

I love it, man. How can anybody reach you to consult with you, join ODs on Finance, or partner with you in some way?

Dr. Aaron Neufeld:

Absolutely, you can always email us at [e-mail]. Feel free to visit our website, and join our Facebook group as well. Whether you’re an OD or a student, we’d be happy to have you join the conversation.