Doctors, their money, and their future. What will retirement look like?

Issue: BCMJ, vol. 59 , No. 7 , September 2017 , Pages 362-363 Premise

The old adage “it’s never too late” does not always apply when it comes to saving and investing. 


My mother had a massive heart attack a few years ago and I can’t express enough gratitude to the medical professionals who saved her life. To this day the complexity of the surgery they performed and the level of education, training, and expertise they demonstrated humbles me. 

Having spent most of my career helping doctors, dentists, surgeons, and specialists navigate the complexities of the financial world, I am still baffled by one thing—how few assets many medical professionals have at the end of their careers. While I have encountered situations where doctors have done a stellar job managing their affairs, and I always show my appreciation for this, it is usually an exception to the rule. 

According to a 2013 McLean’s article, “Average Doctor Salaries by Province,” the average annual salary for a physician in BC was $272 795 at the time. Assuming 2% inflation, this means gross earnings of $8 634 208 over a 25-year career. Yet I can’t tell you how many times I have sat down with doctors approaching retirement to review their financial situation and found they have less than they need in savings to maintain their current lifestyle through a 20- to 30-year retirement. What happened? My thoughts . . . 

• You go to school for years and years to learn about medicine, not finances. You graduate, sometimes with a substantial amount of student debt. You spend several years as a resident, earning $50 000 to $80 000 a year, then you start practising and earn $200 000 to $500 000 or more a year. 

• You spend much of your career “earning and burning,” and many of you try to live up to a “benchmark lifestyle.” I have seen it all. Lamborghinis, helicopters, yachts, lavish trips—all depreciating assets for the most part. Your financial situation takes a backseat while you are busy with your practice and “living the dream.” 

• You have no clue where your money is going. It comes in and it goes out in myriad financial transactions. Many of you become so overwhelmed by this you don’t know where to start with making and following a budget. 

• When you do decide to do some financial “planning,” it often takes the form of an error—a real estate purchase a friend talks you into or an investment based on a “flavor of the week” stock tip from Bob’s brother’s uncle. Meanwhile you aren’t paying any attention to the debt you are incurring personally and inside your corporation. 

• You are a doctor. You are smart. There is no doubt about it. But you don’t know as much about finances and investing as an experienced accountant and an established certified financial planner. Just as these financial professionals trust you to provide medical advice, you should trust them to do their jobs.

• As you mature in your career you start to hear about colleagues wanting to retire who are shocked to realize that their lifestyle will change drastically because they don’t have enough money tucked away. You see doctors working well into their 70s and wonder why. You hear about the distress in families caused by the passing of a colleague whose financial affairs weren’t in order. The list goes on.

The old adage maintains that “it’s never too late.” Sadly, with money it can be. You can’t get years of saving, investing, and compounding back. This could have profound consequences for your financial future, especially in your retirement. This is not to say you shouldn’t enjoy your money during your earning years. You should. You worked hard and deserve a reward. But exercise caution. Pay yourself first. If you are not going to make the time to get your financial affairs in order now you may wake up one day and ask yourself, “What happened?” I have heard more times than not, “I wish I had done this years ago!” 

Based on my experience as a financial advisor, here are some suggestions:

• Make getting your financial affairs in order a priority. As soon as possible, interview a few certified financial planners who specialize in working with medical professionals. Ask your colleagues or your accountant for a recommendation. But remember, just because your friend works with someone doesn’t necessarily mean that person is right for you. Shop around. 

• Consider hiring an independent fee-based financial planner who provides unbiased advice. You can usually find such an advisor at less well known private firms, but there are many great planners out there.

• Introduce your advisor to your accountant and ensure there are open lines of communication. You really can’t maximize your financial situation if there is no communication between the two. The education and licensing of a financial planner and an accountant differs and allows one to do things the other can’t. Both should put your needs front and centre. 

• Ask your advisor for a comprehensive financial plan with an emphasis on tax efficiency. A “hypothetical analysis” is useless in the long run. Taking advantage of provisions in the tax code of Canada can be a surefire way to put a few more dollars in your pocket. 

• Make sure that your advisor reviews your financial and cash flow statements and provides you with a corporate budget, a personal budget, and a monthly income allocation budget. If you do not know what is coming in and what is going out you can end up with tens if not hundreds of thousands of dollars in missed opportunities over your lifetime. 

• Don’t get too hung up on the investment side of things. Once your risk tolerance and time horizon have been established, your advisor can determine the right asset mix for you. Be realistic. Keep it simple. 

• Make sure your advisor is in regular contact with you. I usually speak to clients by phone four times a year and meet in person at least once to review everything. However, people’s situations are unique and any servicing agreement can be customized.  

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The information in this article is intended to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity. As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal, or other professional advisor. Laws and regulations are continually changing and their application and impact can vary widely based on the specific facts involved and will vary based on the particular situation of an individual or entity. Prior to making any decision or taking any action, the reader should consult with a professional advisor. 

The information is provided with the understanding that Harbourfront Wealth Management Inc., which is a member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund, is not herein engaged in rendering legal, accounting, tax, or other professional advice. Any opinion expressed herein is based solely on the author’s current analysis and interpretation of such information, is subject to change, and does not necessarily represent the opinions of Harbourfront Wealth Management.

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Mr Murray is an advisor with Harbourfront Wealth Management Inc. and has specialized in providing advice to medical professionals, business owners, and high net worth investors for most of his career. He has been a guest speaker at the University of British Columbia, hospitals, medical practices, and private functions throughout BC.

Bill Murray, CFP. Doctors, their money, and their future. What will retirement look like?. BCMJ, Vol. 59, No. 7, September, 2017, Page(s) 362-363 - Premise.



Above is the information needed to cite this article in your paper or presentation. The International Committee of Medical Journal Editors (ICMJE) recommends the following citation style, which is the now nearly universally accepted citation style for scientific papers:
Halpern SD, Ubel PA, Caplan AL, Marion DW, Palmer AM, Schiding JK, et al. Solid-organ transplantation in HIV-infected patients. N Engl J Med. 2002;347:284-7.

About the ICMJE and citation styles

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