How to help ease physicians' retirement anxiety

How to help ease physicians' retirement anxiety

How to help ease physicians

Advisors have to “understand the life and world” of a physician in order to help them with their financial pressures.

That’s the view of MD Financial Management, whose recent report – The MD Physician Retirement Study – revealed that half of Canada’s physicians over 40 years old don’t have a plan and that many of them struggle with day-to-day money worries and retirement anxiety.

The study also found that 20% worry about making ends meet month-to-month, 49% are finding it hard to save for retirement and two in three worry about unexpected expenses impact their financial plans. It also discovered that financial anxiety is particularly acute for those between the ages of 40-50 who have children living at home and/or are struggling with consumer debt and mortgages.

MD’s national financial planning lead Stephen Hunt told WP than many advisors know these issues around physicians but this is the first time there’s been a collective look at the group. He added that, in many ways, they have the same concerns as the average Canadian like aging parents, debt, children – but that there are significant differences.

A primary one is the level of debt a physician has to deal with when they finally leave school and the shorter window they have between the earning years and potentially thinking about retirement. After spending years studying and then maybe starting their working life at 35, retirement is not something they are ready for.

Hunt said: “Start the conversation, that’s the most important thing. Financial planning is not a one-time thing, it’s little pieces and there are little bits of planning someone can do early on that they can build on over time.

“Whether that is advice on paying down debt, putting a bit of a plan or strategy in place will help them move over to some of the other conversations like wealth accumulation. The study said that 88% of those who have a plan in place are actually quite confident about their retirement but only about 50% have even considered retirement, so there’s a large group that hasn’t even considered it.”

Another difference is that 55-65 is not necessarily their sweet spot in terms of when they want to retire. Many go on a lot longer, in part because they don’t get started until relatively late but also because the profession is less of a job and more of a calling.

Hunt added: “When I was an advisor, I served more than 200 physician households and I could count on one hand the number that actually retired at 55.

“From an advisor perspective, that conversation is a little deeper than they typical retire at 65. There are a lot of physicians that work well into their 70s and they’re doing it not necessarily because they have to but because they love it and it’s what they were born to do. It’s about digging a little deeper around those questions.”

Meeting this group of professionals on their terms is also vital as is an understanding that their time is precious. Hunt said that, like MD has been doing for the past 50 years, advisors who want these types of clients have to specialise and understand their world.

He said: “There are significant differences, not just financially but just in the way they approach their lives. Our advisors primarily have physician books of 200 families or more. If you are dealing with them every single day, you get to know their challenges, what their dreams are and how the medical community works.

“If I was a physician, I would be looking for someone who really understands the life and the world of a physician. That’s what has made our firm so successful.”

 

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