Is your doctor client worried about finances?

If your client is a doctor, they might be more worried about finances than you realize.

A survey conducted for MD Financial Management found that almost two-thirds of doctors (64%) worry about unexpected expenses. Those most likely to worry were physicians under age 50, those with children at home, those with fewer assets and those with no concrete planning.

Only about one-third of survey respondents said they have concrete plans and goals for retirement. That’s a problem, because the survey found that retirement plans (what to do in retirement) correlated with the creation of financial plans. For example, doctors with concrete plans were more likely to say they have long-term financial plans for retirement that they’re working toward (96%) and that they’re confident in their ability to retire comfortably (88%).

However, helping doctors get financial plans in place will be challenging if these clients avoid thinking about retirement. Besides finances, other top retirement worries included aging (52%), awareness of being in the final years of life (39%) and losing an important part of one’s identity (36%).

Read: Learning to love your future self

To help doctors plan, advisors might want to remind them of what they look forward to in retirement, including travel (cited by 75% of respondents), hobbies (75%) and time with family and friends (73%).

Planning in progress

The survey found that half of respondents have amassed financial assets of $1 million or more, with one-third holding $2 million or more.

Nest-egg size correlated with age and practice type: older physicians were more likely than younger ones to have $2 million or more in financial assets, and specialists were more likely to have this amount relative to general practitioners.

But these amounts weren’t necessarily considered adequate for retirement. More than one-third of respondents (35%) said they require a retirement nest egg of $3 million or more, and one-third (33%) cited an amount of $1 million to $3 million. (The survey found that the greatest proportion of respondents—43%—had annual household incomes between $250,000 and $500,000.)

Other planning included the following:

• 80% of respondents have life insurance and disability insurance
• 70% have up-to-date wills
• 60% have powers of attorney
• about 50% have critical illness insurance
• 30% have a trust for tax and estate planning

The survey also found that doctors vary when it comes to expected retirement age, with fewer than half of respondents having a specific age in mind. The factor most likely to influence retirement age was health/energy (73%). Only 14% expected to retire before age 65, and 4% didn’t expect to retire at all.

For full details, the survey can be requested.

About the study: Environics Research conducted the online study between Aug. 12 and Sept. 4, 2018, with 402 doctors across Canada who were over age 40 and working full time.

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