When Do Doctors Retire? How to Decide if You’re Ready for Retirement?

Kristen Campbell
August 6, 2020

When Do Doctors Retire? How to Decide if You’re Ready for Retirement?

 

Physicians have some of the most variable retirement ages of all professions, and the age of physician retirement can vary by specialization, area, or practice setting. So when do doctors retire? Whether this is due to the need for the work that they do, the satisfaction they gain from the work, or the general later start to their career versus other professions, the average retirement age for doctors tends to be fairly late – 30% of physicians in the United States were over 60. This trend is increasing every year, especially in Canada, where doctor retirement age is significantly higher than the general working population. 

 

Whether this is due to economic reasons, doctor shortages, or a general desire to keep busy later in life, physician retirement is becoming more flexible than ever. With options for working fewer hours, travelling around the country, or taking on a flexible patient load, doctors have plenty of options for continuing their practice later in life. Still, physician retirement is a big decision, and one that you should give plenty of time and thought. Here are some questions to consider:

1. Are You In a Hurry?

Whether you’re working with patients or in a lab setting, chances are the practice you’re operating out of will need some time to adapt to you leaving. In the weeks, months or even years, prior to retirement, you’ll need to start thinking about what you want from your retirement and looking at how long it will take you to wrap things up.

While it might be easier if you have a little bit of notice, there are many situations – like illness, bereavement, or the responsibilities of caring for a loved one – where retirement comes quicker than you planned. Doctors retiring early or doctors who are in a hurry to retire have plenty of options, whether they’re financially ready or not. Solutions such as hiring a locum to cover part of your workload so you can go part time, transferring patients to other doctors in your practice, or taking a reduced work week are options for doctors retiring early. 

If you’re not in a rush, it may be worthwhile to do more detailed planning for your physician retirement. You have to consider whether or not you’ll be selling your stake in the practice you own, transferring patients, or simply leaving your role. In the latter case, a goodbye to your patients and colleagues might be all you need. If you have a more complex practice setup though, it’s a good thing to start planning for retirement a few years in advance, especially if you’re planning to sell your share and relying on that income as part of your nest egg.

 

2. Do you Own Your Practice?

In addition to determining your timeframe for retirement, your ownership stake in your practice can impact your financial readiness to retire. Even if you own your practice outright, it’s a good idea to look into other factors that might impede your ability to sell, like having paper based records vs. an EMR system. If you’re counting on the income from selling your practice to jumpstart your retirement, you might need some help making a careful appraisal of the business’ value and the best time to seek out potential buyers.

If you’re part of a partnership or you share things like patients, records, and office space with other doctors, you will need to think about the impact your retirement will have on the other physicians in your practice – will the practice continue as normal following your retirement, or do you offer an area of expertise that your current practice will need to seek out later on? Will you be selling off your interest to one of the other doctors in the clinic, or will you need to look for outside buyers? The answer to these questions will help determine whether or not you’re ready for retirement. 

So what age do doctors retire? The average retirement age for doctors varies, but generally, the time to retire is when you have a good handle on the business side of leaving your practice. This is something that you could think about for months or even years leading up to retirement. Don’t worry though – there are plenty of options for flexible retirement if you’re not willing to make the leap right away. 

3. What are Your Lifestyle Goals?

What does retirement look like for you? Do you see yourself relaxing on a beach or in a secluded property? Is it feasible for you from your current financial standpoint? It’s important to try to plan for the lifestyle you hope to have prior to retirement, and find any gaps in your financial means ahead of time. These might be easy to fix – continuing practice through locum work, teaching, or a lowered workload would allow you to keep a steady paycheque and spend your retirement savings more cautiously. 

It’s also important to think about not just your financial goals but also what you enjoy doing and find satisfying, so you don’t face some of the negative effects of retiring early, like loneliness or loss of identity. Think about the needs of both you and your spouse, your family, and your community – will there be plenty of opportunities to continue your professional growth and development in a different field? Is it time for you to explore these options? If there are hobbies or interests you’ve always wanted to explore, areas you’ve wanted to live, or other lifestyle things you might enjoy, the years before retirement are a good time to ‘dip your toes in’ and test the waters. 

Doctor retirement age varies across specialization and there is no set deadline for physician retirement. If you see yourself as very active in your later years, it might be a sign that you should avoid delaying your retirement!

 

4. What are Your Financial Goals?

Another factor that impacts when you’ll be able to retire is whether or not you have enough savings or have fulfilled your financial responsibilities. Because doctors start their careers later in life, they often have considerably more student debt than those in other professions, which means they might be later to pay off things like mortgages, children’s college tuition, or other large expenses. If this is the case, when do doctors retire? 

The answer might be different for everyone, but a big part of this comes down to financial readiness. Good saving, planning, and investment in the years prior to retirement will assist you and your family in reaching your financial goals, but many doctors are retiring later simply because they want to. 

If this isn’t the case for you, think about staging your retirement process to help you financially on the process to full retirement. Locum work or a reduced workload would allow you to have a steady paycheck to save up for the years ahead, or you could take a reduction of hours each year, which will also help to give your existing practice notice. 

If your financial goals depend on the income from selling your practice, you should start thinking about this sale a few years in advance in order to get your patient book, medical records, and other crucial pieces of the puzzle together. Do you own the building your practice is in? How much of an ownership stake did you take? Will you be taking advantage of the tax credits for the sale of your business? Careful consultation with a professional can help you clear up all of these details and give you a timeframe for your financial readiness.

 

5. Do You Want to Continue Working?

Besides financial, part of the reason for doctor retirement age being higher than other professions is the satisfaction and identity they gain from their job – after all, being part of the medical profession often means you’re well respected in your community, get a chance to impact patient’s lives, and carry a lot of responsibility for your own career. For many doctors, this part of their life is difficult to give up. 

Even more than the financial aspect of retirement, one of the biggest things to think about is whether or not you’re ready to retire. Do you have a strong network of relationships and hobbies to keep you busy, or will you be missing the challenge and satisfaction of seeing your patients? There’s no right answer – how you choose to retire will be up to you, and options for physician retirement are becoming increasingly flexible. 

Doctors retiring early might not leave medical practice entirely, as there are plenty of options for physicians who want a lighter workload or more flexibility, like locum work or part time practice. This could be a good fit in the years leading up to your retirement as you balance your financial priorities with your goals for more downtime. 

 

Thinking about retirement is a big decision, but you don’t have to make it overnight – in fact retiring gradually, doing plenty of prep work, and planning carefully can make your path to retirement smooth and enjoyable!

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