U.S. Physicians’ Respondent Preparedness 2018 Report on US... · 2018-12-03 · Brokerage...

Introduction/Methodology

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Satisfaction withRetirement

Financial Journey& Longevity

Top Considerations Ahead of Retirement

Advice from Retired Physicians

Resources

Life inRetirement

| 1 | 2018 Report on U.S. Physicians’ Financial Preparedness©

2018 Report on U.S. Physicians’ Financial Preparedness©

Retired Physicians Segment

©2018 AMA Insurance Agency, Inc., a subsidiary of the American Medical Association


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Study Objective

The 2018 U.S. Physicians’ Financial Preparedness: Retired Physicians Segment is the latest data release from AMA Insurance, designed to understand the attitudes and corresponding behaviors of physicians related to personal finance and retirement readiness. This is the first time we are sharing responses specifically from physicians who have entered retirement.

Study Methodology

The national email survey was sent to retired physicians as part of a national physician survey in 2016.

This report features insights specific to the retired physician respondents [N=1,202] and to practicing physicians over age 60 [N=714], of which 34 percent [N=240] plan to retire in the next two years. Results were analyzed in the aggregate and by gender, age and specialty. Survey data collected through Qualtrics®. Results analyzed at a 95% confidence interval; total sample of N=1,916, +/- 2.24% margin of error.

2018 Report on U.S. Physicians’ Financial Preparedness©

Retired Physicians Segment

Study Sponsor

For 30 years, AMA Insurance Agency, Inc., a subsidiary of the American Medical Association, has been helping America’s physicians and their families obtain the support and insurance protection they need for a healthy financial future.

AMAI conducts national surveys to share insights with U.S. physicians in order to help them secure their personal financial futures.

Additional financial preparedness reports focused on Women Physicians, Employed Physicians, Young Physicians, Residents and Medical Students can be found at amainsure.com/usphysiciansresearch.

https://www.amainsure.com/physicians-in-focus.html?category=RR


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Pamela MoyPresident and General ManagerAMA Insurance

Introduction

Today’s Retired Physician: Insights and Conclusions

Welcome to AMA Insurance’s first financial preparedness report focused on retired physicians in the U.S. Our goal is to provide a close look at how physicians in their retirement years are faring and just what characteristics have determined whether or not they feel secure in their financial situation.

1,202 retired physicians participated in our survey, and most (80 percent) retired physicians living today are generally satisfied with their retirement and confident that their retirement savings will last.

Benchmarks and Advice

While most retired physicians are in their 70s and 80s, the retirement age for physicians spans a wide range: some respondents retired before reaching the age of 60; others worked until they were 75 or older.

Our goal is to provide benchmarks that can assist with your strategies, whether you are preparing for, settling into or actively living your retirement dream. The report also offers valuable insights and expert tips from independent financial professional, Marti Mason, CEO of Taylor Wealth Solutions, a member of AMA Insurance Physicians Financial Partners program since 2010.

A special thank you to the 1, 200 retired physicians who so generously shared their experience in retirement and their sage advice to those getting ready to retire.

Top Considerations for Soon-to-Retire Physicians

Within the report is a special feature specifically developed for physicians who are planning to retire in the next few years. We found 8 factors among practicing physicians over age 60 that have an impact on financial preparedness ahead of retirement.

For physicians, retiring can be a complex and bittersweet process. We trust this report will provide insights to help simplify that process and help you get the most enjoyment out of your retirement years.

J. Michael HegwoodAssistant Vice PresidentBrokerage MarketingAMA Insurance


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Married


U.S. Retired Physicians: Respondent Profile Base: 1,202

This report includes responses from more than 1,200 retired physicians from across the country, who practiced in a variety of settings and specialties. Here’s what today’s retired physician looks like:

Age Gender

Marital Status Medical Specialty

Age at Retirement

Widowed DivorcedSingle Partnered

85%

5% 3% 4% 2%

Married

Widowed

Single

Divorced

Partnere

d

13%Female

87%Male

SPECIALTY12%

11%8%

7%6%

5%5%5%

4%3%

34%

General Internal Medicine

Family Medicine

Obstetrics and Gynecology

Pediatrics

General Surgery

Orthopedic Surgery

Anesthesiology

Radiology

Psychiatry

Pathology

Other

12%11%

8%7%6%5%5%5%4%3%

34%

General Internal…

Family Medicine

Obstetrics and…

Pediatrics

General Surgery

Orthopedic Surgery

Anesthesiology

Radiology

Psychiatry

Pathology

Other

Under age 6060-65

66-70

71-74

75+

Under age 60 60-6566-70 71-7475+

24%41%

3%12%

20%

12%4% 1% 4% 4% 4%

12% 8% 6% 5% 4% 8%3% 4% 3% 3%

14%

Under60

60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75+Total may not equal 100% due to rounding

General Internal Medicine

Family Medicine

Obestrics and Gynecology

PediatricsGeneral Surgery

Orthopedic Surgery

Anesthesiology

Radiology

Psychiatry

Pathology

Other


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Life in Retirement


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Life in Retirement

Most retired physicians lead full, active lives. In addition to the most common retirement activities – spending time with family and friends, in leisure activities and traveling – many physicians are engaged in activities that are a natural progression from their full-time work in the medical profession.

While the vast majority of physicians are satisfied with their retirement, factors beyond finances can cause retirement years to be less than satisfying. A number of physicians reported that they do not spend their time in retirement as they envisioned because they are now disabled, have been diagnosed with a chronic illness or are caring for a loved one with poor health.

Advice from Successfully Retired Physicians: “Do your best to maintain good health. Money will never buy happiness, and certainly not if your health is poor.”

“Make sure you have an advisor who is a fiduciary.”

“Live within your means.”

How Physicians Are Spending Their Retirement

Time with family and friends

Leisure activities

Travel

Volunteer

Work part time

Teach

Consult

Started a new business

OtherTOTALBase: 1,202

82%

76%

60%

41%

17%

16%

15%

4%

14%


Leisure activities

Travel

Volunteer

Work part time

Teach

Consult


Other

82%

76%

60%

41%

17%

16%

15%

4%

14%


Leisure activities

Travel

Volunteer

Work part time

Teach

Consult


Other (Please specify)


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Advice from Successfully Retired Physicians: “If one has the opportunity, take it—the future is unpredictable, and I have already seen colleagues’ retirements changed for the worse by continuing to work when they might have taken advantage of the ‘gift’ of retiring earlier [before health-related events changed their lives].”

“Make sure you know what you will be doing in sickness and in health when you are not working.”

“It is all about health and wealth. If you have those two things, then you can enjoy life and do the things you want to do.”

Life in Retirement (continued)

Continued education is also a priority. Retired physicians shared that they are taking adult education classes or even returning to school for a degree in another field. Others are staying abreast of the latest scientific, medical and political developments with intensive daily reading.

Many physicians have made time for activities that are as unique as they are:

• Sculpting and creating other visual arts

• Performing music

• Breeding Standard Poodles

• Beekeeping

• Ranching

• Farming

• Guiding duck hunts

• Scuba diving

• Flying ultralights

• Racing triathlons

• Participating in amateur radio

• Playing competitive bridge

• Writing books

• Founding and running a nonprofit

• Serving as a health policy fellow and columnist


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Satisfaction with Retirement


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Satisfaction with Retirement

Overall, most retired physicians (80 percent) say they are satisfied or very satisfied with their retirement.

5 Factors That Impact Satisfaction in Retirement

Not all retired physicians are equally satisfied with the retirement stage of their profession. Among those physicians who are very satisfied with their retirement, we identified 5 factors that differ from those who are less satisfied.

43%

41%

51%

44%

36%

30%

37%

34%

34%

38%

41%

41%

11%

13%

8%

10%

11%

18%

5%

4%

3%

5%

5%

7%

4%

8%

4%

3%

7%

4%

TOTAL

Under age 60

60-65

66-70

71-74

75+

Very satisfied Satisfied Neutral Dissatisfied Very dissatisfied

Base: 1,202

Base: 144

Base: 366

Base: 373

Base: 151

Base: 168

43%

41%

51%

44%

36%

30%

37%

34%

34%

38%

41%

41%

11%

13%

8%

10%

11%

18%

5%

4%

3%

5%

5%

7%

4%

8%

4%

3%

7%

4%

TOTAL

Under age 60

60-65

66-70

71-74

75+


Base: 1,202

Base: 144

Base: 366

Base: 373

Base: 151

Base: 168

43%

41%

51%

44%

36%

30%

37%

34%

34%

38%

41%

41%

11%

13%

8%

10%

11%

18%

5%

4%

3%

5%

5%

7%

4%

8%

4%

3%

7%

4%

TOTAL

Under age 60

60-65

66-70

71-74

75+


Base: 1,202

Base: 144

Base: 366

Base: 373

Base: 151

Base: 168

AGE ATRETIREMENT

Base: 514, Top Box Q4.20

FINANCIAL STATUS


FINANCIAL UNDERSTANDINGBase: 514, Top Box Q4.20

STARTED SAVING


USE FINANCIAL PLANNER


Under age 60 11%

60-65 36%

66-70 32%

71-74 11%

75+ 10%

Ahead of schedule 14%

On-track 78%

Behind where I'd like it to be 8%

Very knowledgeable 31%

Knowledgeable 50%

Somewhat knowledgeable 15%

Not very knowledgeable 3%

In medical school 4%

In residency 10%

In the first few years practicing 71%

Mid-career 13%

Later in my career 2%

Yes 72%

No 28%

43% Very Satisfied


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Factor 1: Age at Retirement

Physicians who are most satisfied with retirement are those who retired between the ages of 60 and 65. Those who retired early, under age 60, are more likely to say they are dissatisfied or very dissatisfied with their retirement.

Factor 2: Overall Financial Status

We asked physicians to describe the overall status of their retirement financial plans. The largest group of physicians who view themselves as behind where they’d like to be financially for retirement are those who retired before age 60 — nearly 30 percent.

10%

8%

14%

7%

8%

8%

73%

63%

70%

76%

75%

77%

18%

29%

16%

17%

17%

15%

TOTAL

Under age 60

60-65

66-70

71-74

75+

Ahead of schedule On-track Behind where I'd like it to be

43%

41%

51%

44%

36%

30%

37%

34%

34%

38%

41%

41%

11%

13%

8%

10%

11%

18%

5%

4%

3%

5%

5%

7%

4%

8%

4%

3%

7%

4%

TOTAL

Under age 60

60-65

66-70

71-74

75+


Base: 1,202

Base: 144

Base: 366

Base: 373

Base: 151

Base: 168

43%

41%

51%

44%

36%

30%

37%

34%

34%

38%

41%

41%

11%

13%

8%

10%

11%

18%

5%

4%

3%

5%

5%

7%

4%

8%

4%

3%

7%

4%

TOTAL

Under age 60

60-65

66-70

71-74

75+


Base: 1,202

Base: 144

Base: 366

Base: 373

Base: 151

Base: 168

10%

8%

14%

7%

8%

8%

73%

63%

70%

76%

75%

77%

18%

29%

16%

17%

17%

15%

TOTAL

Under age 60

60-65

66-70

71-74

75+


- Base: 1,202

- Base: 144

- Base: 366

- Base: 373

- Base: 151

- Base: 168

10%

8%

14%

7%

8%

8%

73%

63%

70%

76%

75%

77%

18%

29%

16%

17%

17%

15%

TOTAL

Under age 60

60-65

66-70

71-74

75+


- Base: 1,202

- Base: 144

- Base: 366

- Base: 373

- Base: 151

- Base: 168

Total may not equal 100% due to rounding


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Factor 3: Understanding of Personal Finances

Overall, 71 percent of retired physicians say they are somewhat or very knowledgeable about personal finance. Those who are the most knowledgeable also tend to be the most satisfied with their retirement.

Factor 4: When They Started Saving

Most retired physicians today started saving for their retirement in their first few years as a practicing physician; those who started saving mid- or later in their career are less satisfied.


21%

50%

24%

5%

3%10%

66%

16%4%

In medical school In residency In the first few years as apracticing physician

Mid-career Later in my career

TO

TA

L

Bas

e: 1

,202

Very knowledgeable

Knowledgeable

Somewhat knowledgeable

Not very knowledgeable

UNDERSTANDINGVery

knowledgeableKnowledgeable



Base: 256 595 290 61

SA

TIS

FAC

TIO

N

T2B (Net) 83% 85% 73% 59%

Very Satisfied 62% 44% 27% 26%

Satisfied 21% 41% 46% 33%

Neutral 9% 8% 19% 15%

Dissatisfied 3% 3% 7% 16%

Very dissatisfied 5% 5% 2% 10%

Base

In medical school In residency In the first few years as a practicing physician

Mid-career Later in my career



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Advisor Insight

“Look for an advisor who will serve as a fiduciary. The advisor needs to be a good listener and ask the tough personal questions to help you stay realistic, putting your best interests ahead of their financial gain.”

For those who enjoy and plan to continue navigating their own personal finances and investments, you’ll need to be extra diligent in your efforts.

“Make sure you have a plan—be confident of it, and stick with it,” urges financial advisor Marti Mason. “Read deeply, and keep up with changes in the financial markets and products.”

Even if you’re not using a professional advisor, Mason advises against flying solo. She recommends finding an attorney to work with who can establish the legal instruments needed and make sure beneficiaries and account ownership coordinate with your estate plan. And it’s important to involve your spouse and loved ones early, so they have a clear idea of your financial picture.

Factor 5: Use of a Professional Financial Advisor

Nearly 3 out of 4 retired physicians work with a professional financial advisor. These physicians are more likely to be satisfied with their retirement than those who don’t (82 percent, versus 75 percent).

72% of retired physicians work with a financial advisor

Advice from Successfully Retired Physicians: “Be realistic about your spending. If you don’t have a good financial advisor, find one who can save you from yourself when you get anxious about the stock market.”

47 percent of physicians who do not use a professional financial advisor say they prefer to handle their finances themselves. Many have strong financial acumen and enjoy finance and investing as a hobby.

About the Advisor

Marti Mason has more than 35 years of experience in the financial services industry. She is CEO of Taylor Wealth Solutions, a fiduciary group with a rich history of serving physicians and other individual clients. Taylor Wealth Solutions has been a member of the AMAI Physicians Financial Partners program since 2010.

https://www.amainsure.com/financial-strategies/Financial-Planning.html



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Financial Journey & Longevity


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Financial Journey and Longevity

Ultimately, satisfaction comes down to a retired physician’s confidence that their savings will weather the unpredictable and last throughout their retirement.

That confidence depends on a number of financial responsibilities and decisions—including when a physician retired, as well as their health and longevity.

AG

E A

T R

ETIR

EM

EN

T

Confidence That Retirement Funds Will Last

Why Not Confident?Why Confident?Live within my means

Made wise investment choices

Have plenty of savings

My advisor told me I’m on track

82%

53%

49%

40%

8%

Live within my means



My advisor told me I'm on track


52%

43%

60%

53%

45%

51%

40%

42%

33%

41%

49%

43%

5%

7%

5%

4%

3%

5%

3%

8%

2%

2%

3%

2%

TOTAL

Under age 60

60-65

66-70

71-74

75+

Very confident Somewhat confident Not very confident Not at all confident

Base: 1,191

Base: 142

Base: 363

Base: 369

Base: 150

Base: 167

52%

43%

60%

53%

45%

51%

40%

42%

33%

41%

49%

43%

5%

7%

5%

4%

3%

5%

3%

8%

2%

2%

3%

2%

TOTAL

Under age 60

60-65

66-70

71-74

75+

Very confident Somewhat confident Not very confident Not at all confident

Base: 1,191

Base: 142

Base: 363

Base: 369

Base: 150

Base: 167

82%

53%

49%

40%

8%






50%

43%

28%

27%

27%

16%

19%

Volatile market conditions depleting savings

Didn't save enough

Started saving too late

Major health issue/costs rapidly depleting savings

Financially supporting family members

Spent too much early in retirement


Volatile market conditions depleting savings

Didn’t save enough

Started saving too late

Major health issue/costs rapidly depleting savings

Financially supporting family members

Spent too much early in retirement

82%

53%

49%

40%

8%





Other (Please specify)Total may not equal 100% due to rounding


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Looking Forward to Retirement: Physician Advice

Retired physicians describe this phase of life as one of enjoyment and personal fulfillment.

Advice from Successfully Retired Physicians:

“I am able to enjoy the ‘harvest’ time of my life. I can still learn new things, am happy and share my happiness. I worked until 78 years of age in a happy job.”

“Retirement is a natural progression in one’s career… I am enjoying feeling in touch with the rhythms of the season and with my own rhythms and having the time and energy to do things I haven’t had the chance to do.”

“Retire early enough to enjoy it.”

“Remember that some of the most enjoyable things are free or cost little. Stay physically and mentally active. Laugh often, love much, live well.”

“Go ahead and retire. You will never regret it.”


Read on for more physician advice, and personal financial strategies for physicians planning to retire in the next two years.


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Additional Articles and Resources for Physician Retirement

Financial and Insurance Planning

“Bear proof” your retirement: How to protect your finances

5 ways to partner with a physician-friendly financial advisor

6 top financial planning mistakes physicians make

Costly IRA mistakes physicians should never make

4 IRA questions for which you need answers

The three phases of physician insurance planning—who needs what and when?

https://www.amainsure.com/physicians-in-focus/Bear-proof-your-retirement-How-to-protect-your-finances.html

https://wire.ama-assn.org/practice-management/5-ways-partner-physician-friendly-financial-advisor

https://wire.ama-assn.org/life-career/6-top-financial-planning-mistakes-physicians-make

https://www.amainsure.com/physicians-in-focus/6-costly-IRA-mistakes-physicians-should-never-make.html

https://wire.ama-assn.org/life-career/physicians-retirement-planning-get-answers-these-4-ira-questions

https://www.amainsure.com/physicians-in-focus/three-phases-of-insurance-planning.html

https://www.amainsure.com/physicians-in-focus/three-phases-of-insurance-planning.html

https://www.ama-assn.org/sites/default/files/media-browser/public/sps/the-aging-physician-gabbard-slides_0.pdf


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Top Considerations Ahead of Retirement: A Guide for Physicians An excerpt from: 2018 Report on U.S. Physicians’ Financial Preparedness: Retired Physicians Segment


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Advisor Insight from Marti Mason:

Be sure you retire to something…. You are coming out of a field with great purpose, and your retirement should be purposeful as well.

About the Advisor

Marti Mason has more than 35 years of experience in the financial services industry. She is CEO of Taylor Wealth Solutions, a fiduciary group with a rich history of serving physicians and other individual clients. Taylor Wealth Solutions has been a member of the AMAI Physicians Financial Partners program since 2010.


When it comes to such a personal decision as when and how to retire, no two physicians are alike. Physicians’ satisfaction with continuing to work, their financial portfolios, their family situations, their personal health and many other factors come into play. That means each physician’s situation is unique, regardless of age or length of time in the profession.

At the same time, many of the complexities of physicians’ financial journeys (such as paying off hefty medical school debt, securing sufficient insurance coverage, paying for children’s education and investing for the future) are often very similar, so there are important concepts that all physicians can take to heart before making firm decisions about retirement.




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AGE

61 - 65 Over 65

GENDER

MARITAL STATUS YEARS IN PRACTICE

81%

8% 5% 3% 3%

Mar

ried

Divor

ced

Sing

le

Widow

ed

Partn

ered

52%48% 81%19%

THOSE PLANNING TO CONTINUE PRACTICINGBase: 474

AGE

61 - 65 Over 65

GENDER

MARITAL STATUS YEARS IN PRACTICE

86%

3% 5% 3% 2%

Mar

ried

Divor

ced

Sing

le

Widow

ed

Partn

ered

31%

69%85%15%

THOSE PLANNING TO RETIREBase: 240

-

-

-

1%

3%

15%

81%

1-5

6-10

11-15

16-20

21-25

26-30

More than 30

-

-

1%

3%

7%

19%

70%

1-5

6-10

11-15

16-20

21-25

26-30

More than 30

Physician Respondents over Age 60

For this special report, AMA Insurance looked at practicing physicians over age 60, and compared those planning to retire in the next 2 years (N=240) with their peers who plan to continue practicing (N=474).



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Physician Respondents over Age 60

Among practicing physicians we surveryed, having enough money to retire is their top financial concern, followed by the ability to fund their long-term care and having the right estate plan.

Status of Financial Plans

Physicians planning to retire in the next two years are more likely to say their financial plans for retirement are on-track or ahead of schedule, compared to those who are more likely to say they are behind where they’d like to be.

Concern about Personal/Family Financial Issues

19%

11%

11%

5%

4%

4%

2%

1%

36%

31%

27%

13%

11%

7%

4%

1%

14%

18%

17%

17%

14%

6%

5%

3%

20%

18%

17%

22%

25%

16%

13%

9%

12%

22%

27%

42%

47%

67%

76%

87%

Having enough money to retire

Able to fund long term care expenses (i llness or disabili ty)

Having the right estate plan

Having enough or the right disability insurance

Having enough life insurance for my family

Funding college expenses for my ch ildren

Financially providing for elderly parents

Paying off medical school debt

Very concerned Somewhat concerned Neutral Not concerned Not at all concerned

Base 712

19%

11%

11%

5%

4%

4%

2%

1%

36%

31%

27%

13%

11%

7%

4%

1%

14%

18%

17%

17%

14%

6%

5%

3%

20%

18%

17%

22%

25%

16%

13%

9%

12%

22%

27%

42%

47%

67%

76%

87%

Having enough money to retire

Able to fund long term care expenses (i llness or disabili ty)

Having the right estate plan

Having enough or the right disability insurance

Having enough life insurance for my family

Funding college expenses for my ch ildren

Financially providing for elderly parents

Paying off medical school debt

Very concerned Somewhat concerned Neutral Not concerned Not at all concerned

Total may not equal 100% due to rounding12%

11%

67%

55%

20%

34%

THOSEPLANNIN

G TORETIRE

THOSEPLANNIN

G TOCONTINU

EPRACTICI

NG

Ahead of schedule

On-track

Behind where I'd like it to be

12%

11%

67%

55%

20%

34%

THOSE PLANNING TO RETIRE

THOSE PLANNING TO CONTINUE PRACTICING


Base: 240

Base: 474



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We analyzed 8 characteristics that physicians getting ready to retire share.

They plan to retire at a younger age.1

They have adequate savings.2Many of those planning to retire in the next two years have built up a significant nest egg—nearly one-third of this group already has more than $3 million saved in their retirement portfolios, versus 20 percent of those planning to continue practicing.

Advisor Insight:

Even if you’re a physician who has saved well, it’s important to temper expectations for retirement with an eye to the realities of what you may need in retirement, how long that retirement may last and what kinds of market conditions you must weather during that time, Mason notes.

“What may seem like a significant sum in the bank now may not seem all that significant when compared to your current annual income,” says Mason. “Those working with a financial advisor are likely having discussions around expectations and whether or not those expectations line up with where they really are.”

Not all physicians plan to—or even want to—retire in their 60s. In fact, 35 percent of physicians retire in their 70s and beyond. However, physicians planning to retire in the next two years are more than twice as likely as their practicing peers to retire between the ages of 65 and 67 (21 percent, versus 10 percent).

Physician Retirement Savings Portfolio

More than $3,000,000

$1,000,001 - $3,000,000

$500,001 - $1,000,000

$100,001 - $500,000

Less than $100,000

14%17%

43%42%

2%

Those planning toretire in 2 yearsBase: 240

Those planning tocontinue practicingBase: 474

31%20%

9%10%

10%Total may not equal 100% due to rounding


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“In deciding when to retire, ask how you will use your time and your savings. Consider your age, health and interests.”

“Be certain you know how to handle your money in savings and investments, and live within your means.”


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They carry little (if any) business or consumer debt.

3Advisor Insight:Do You Have Enough Money to Retire?

“A common rule of thumb is the ‘4 percent rule,’ which says a safe withdrawal amount from retirement portfolios is 3-4 percent of the account balance per year,” says Mason. “While this is a useful ‘back-of-napkin’ assessment, it should only be used as a starting point.”

When thinking about whether you could live off that 3-4 percent, debt can weigh you down if you have a good deal to pay off or have grown accustomed to relying on credit or loans, says Mason.

Other Factors You Need to Consider

How long your retirement could last. “If you end up living 30 years into retirement, you’ll likely have a much more difficult time making this rule work than if your retirement spans 20 or fewer years.”

How well you have allocated your assets.“You don’t want to be so risk-adverse that your funds don’t grow, but you also don’t want to be so risky that you’re in serious trouble if the market delivers a shock.”

What your plans are for when the market does drop—because it will. “You need to be prepared for the adjustments you might make, whether temporary or permanent.”

Practicing Physicians over Age 60: Debt

While the amount of savings is important in evaluating retirement readiness, so is the amount of debt a physician has accumulated. Here is another significant divergence between the two groups of physicians: 46 percent of those who are about to retire have no personal debt, compared to 33 percent of physicians who plan to continue practicing. Similarly, 86 percent of soon-to-retire physicians have no professional debt, versus 77 percent of their peers who are not yet retiring.

5%

9%

2%

86%

8%

17%

5%

77%

Business loan

Line of credit

Other business/practice debt(Please specify)

None

Those planning toretire in 2 years

Those planning tocontinue practicing

BUSINESS/PRACTICE DEBT

Base: 240

Base: 474

37%

22%

19%

12%

2%

2%

46%

49%

28%

22%

19%

4%

4%

33%

Mortgage

Car loan

Credit card balance

Home equity loan/Line of credit

Refinance loan

Other consumer debt (Please specify)

None

Those planning to retire in 2years

Those planning to continuepracticing

CONSUMER DEBT

Base: 239

Base: 474

CONSUMER DEBT

Business loan

Line of credit

Other business/practice debt (Please specify)

None

5%

9%

2%

86%

8%

17%

5%

77%

Business loan

Line of credit


None



Base: 240

Base: 474

Mortgage

Car loan

Credit card balance

Home equity/Line of creditRefinance loan

Other consumer debt (Please specify)

None

5%

9%

2%

86%

8%

17%

5%

77%

Business loan

Line of credit


None



Base: 240

Base: 474

5%

9%

2%

86%

8%

17%

5%

77%

Business loan

Line of credit


None



BUSINESS/PRACTICE DEBT

Base: 240

Base: 474


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Life inRetirement


“Start to simplify your lifestyle. Critically evaluate your savings for retirement. Focus on maintaining and/or improving your health. Eliminate, or at least minimize, your debt.”

“Avoid debt, and live modestly.”

“Pay off all debt that you can—in particular, credit card debt and mortgage.”



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They have completed their obligations for financially supporting others.4

Physicians who are about to retire are less likely to be financially supporting others, including elderly parents and older children. 26 percent of those soon to retire report that they are still financially supporting children who are 18-26 years old, versus 35 percent of those who plan to stay in practice longer.

Similarly, physicians who are divorced are less likely to be among those who are getting ready to retire (divorcees make up 3 percent of soon-to-retire physicians but 8 percent of those waiting longer).

Advisor Insight:

Make sure you are accurately accounting for how your financial support of other people will affect your retirement savings, says Mason.

“Divorce is a factor that must be built into effective planning. If alimony payments persist into retirement, that will need to be incorporated into the plan as its own goal. It’s easy to make errors in mental accounting, like double counting assets or income. This can be very damaging if you haven’t planned for it,” says Mason.

Parents also need to establish a ceiling for how much they plan to invest in their children and/or grandchildren’s educations, Mason advises.

“Have realistic expectations of how much should be spent on private education for your children,” says Mason. (Or if you’re helping pay for your grandchildren’s educations, you should ask yourself not only how much you might give toward tuition but also for how many grandchildren you will be able to do that.) “Of course you can spend as you like, but you need to understand the repercussions of these decisions.”


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“Be prepared for the unexpected (e.g., illness and family needs for your children and grandchildren).”

“Don’t get divorced at the end of your career.”

“Start early in your career to save money, and never adopt an expensive lifestyle. Get college funds for children set up and fully funded.”


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They are knowledgeable of personal finances.

5 Advisor Insight:

According to AMA Insurance’s 2018 Report on U.S. Physicians’ Financial Preparedness: Retired Physicians Segment, physicians who have already retired are statistically more likely to be satisfied with their retirement if they consider themselves “knowledgeable” or “very knowledgeable” of personal financial issues.

This correlation comes down to being realistic about goals and the steps required to achieve them, says Mason.

“In most cases, when you’re retired, you can’t maintain the same lifestyle that you had when you were actively producing income,” says Mason. “You can, however, stay firm on the things that mean a lot to you, as long as you live within your means and stick to your detailed financial plan.”

Practicing Physicians over 60: Knowledge of Personal Finances


“Two years prior to retirement, review your current expenditures and plan your retirement budget. In the year prior to retirement, live on the annual income you predict for your retirement to be sure it is comfortable for your needs.”

“Stick to safe investments, and avoid gimmicks offering large returns on money.”

Physicians who consider themselves “knowledgeable” of personal financial issues are more likely to be retiring in the next two years, while those who consider themselves to be “somewhat” or “not very knowledgeable” (37 percent) are more likely to be postponing their retirement.

23%

22%

49%

41%

25%

28%

4%

9%

THOSE PLANNING TORETIRE

THOSE PLANNING TOCONTINUE PRACTICING

Very knowledgeable Knowledgeable

Somewhat knowledgeable Not very knowledgeable

23%

22%

49%

41%

25%

28%

4%

9%





23%

22%

49%

41%

25%

28%

4%

9%





23%

22%

49%

41%

25%

28%

4%

9%





4%


22% 41% 28% 9%

23% 49% 25% 4%

23%

22%

49%

41%

25%

28%

4%

9%

THOSE PLANNING TO RETIRE

THOSE PLANNING TO CONTINUE PRACTICING

Very knowledgeable

Knowledgeable




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They get expert advice.6 Advisor Insight:

The first criteria you should have for an advisor is that they will be a fiduciary, serving your best interests above their own, says Mason.

“You need to fully understand how your advisor is compensated. The advisor should be forthcoming with that information up front,” says Mason.

Additionally, you want an advisor who can explain things well. “Look for an advisor who approaches it as a teacher would, so you fully understand the advisor’s approach and strategy for your portfolio.”

In addition to helping you work through detailed financial plans throughout your career, Mason notes

that partnering with an expert professional on retirement planning gives physicians a leg up in decision-making of all kinds.

Advisors can provide calculations for how various financial decisions would impact your retirement (such as the difference between owning your home or selling it and then renting, or buying a cheaper vehicle versus a luxury one). They can also use algorithms for different stock market scenarios to help their advisees plan for the unknown, Mason says.

Working with a financial advisor they trust also makes physicians more likely to be among those who are retiring in the next two years (74 percent, versus 65 percent of those who plan to continue practicing).


“Use a professional advisor you can trust.”

“Listen to your advisors … and inform [your family] of decisions that will affect them.”

“Get an actuary and a financial advisor who will invest for you. A good doctor who is a good investor is an oxymoron.”


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Life inRetirement

Updated Will

End-of-Life Directives

Power of Attorney

Medical Directives

Living Trust

Plan to AddressEstate Taxes

Charitable GivingProvisions

None of the above

81%

72%

70%

61%

70%

59%

69%

59%

49%

39%

38%

35%

25%

18%

8%

17%

Those planning to retire in 2 years | Base: 240

Those planning to continue practicing | Base: 473


They have updated estate plans in place.7Advisor Insight:

Just like you need to start saving for retirement early, you don’t want to put off estate planning until it’s too late, says Mason.

“People don’t think it’s going to happen to them,” says Mason. “I can think of three different doctors we helped get their wills in place over the last year when they received life-threatening diagnoses.”

“Sometimes you don’t keep your backyard in order the same as you would when helping somebody else,” says Mason. “But estate plans are essential for helping your own loved ones when your time comes.”

While many physicians across the board need to tend to their estate planning documents, physicians who are planning to retire in the next two years are much more likely to have updated estate plans in place than their peers who are planning to stay in practice longer.


“Update everything—personal directives, will, legal directives and estate distribution.”

“Hire the services of a highly respected ethical financial advisor and estate planning attorney.”

Practicing Physicians over Age 60: Estate Plans


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They map out detailed retirement plans.8More than 1,000 retired physicians passed on their words of wisdom for their colleagues still practicing full time. A recurring theme from these successful retirees was the importance of making detailed plans for retirement, going beyond financial considerations. Part of retiring to something is mapping out what you plan to do with your time—and how you will make the transition from practice to retirement.


“Plan carefully a few years ahead of time on how you will be spending your retirement time in a meaningful way. A slow transition to retirement is better than a sudden, complete termination of practice.”

“Start working half days for a year or more and then transition into full retirement.”

“Transitioning from a very busy hectic professional life to a more relaxed pace can be a challenge. Being productive is not necessarily the goal of being retired. Develop hobbies, goals or volunteer activities that aren’t tied up in being a physician.”

“If you haven’t done it already, begin spending time now in activities you plan to pursue in retirement.”

“Plan for it ... when, where, how, with whom. Identify priorities. Make sure you have your health care needs identified along with a plan to manage them.”

“There is a huge world open to you, and you should be ready to take advantage of the myriad opportunities that lie ahead.”

“Like most stages of life, retirement takes time to ‘grow into,’ perhaps as much as one or two years. But it is a wonderful time of life. My husband and I are blessed to be sharing it together!”

U.S. Physicians’ Respondent Preparedness 2018 Report on US... · 2018-12-03 · Brokerage...

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