| NRM Personal
Finance Survey Results 2006 |
| 9%
of physicians plan to work until they die |
| I
plan to retire at: |
|
| 55
or less |
7% |
| 56-60 |
25% |
| 61-65 |
31% |
| 66-70 |
28% |
| never |
9% |
| Most
of you stick to mutual funds and stocks for
your investments |
| Mutual
Funds |
52% |
| Stocks |
49% |
| GICs |
15% |
| Bonds |
12% |
| 35%
report a net worth of $1 million or more |
| less
than $250,000 |
16% |
| $251
- 350,000 |
10% |
| $351
- 500,000 |
13% |
| 501,000-1,000,000 |
26% |
| $1,000,000
- 2,000,000 |
25% |
| over
$2,000,000 |
10% |
|
The profession is making some progress
in managing the money practices bring, according to
the second annual National Review of Medicine
Personal Finance Survey.
That said, the most pressing financial
challenge faced by doctors right across the country
is accumulating sufficient funds for retirement. Fully
a quarter of all doctors are concerned that their nest
egg may fall short of their post-practice needs (see
"Five retirement planning
gaffes to avoid"). Related to that concern are another
17% who worry that their investments are not earning
sufficient income (see "Small
investment plans with big returns"). One of the
reasons for concern here has been low interest rates
— 15% of respondents reported that they held bonds,
while a scant 3% had funds in the money market.
RETIREMENT
WOES
One of the reasons physicians are concerned about retirement
funding is that more of you hope to retire earlier.
A whopping 63% of you reported that you wished to retire
by age 65, up from 57% a year earlier. Seven percent
of respondents were looking to get out of medicine before
age 55; a significant 25% wish to hang up the shingle
between age 56 and 60, with 31% prepared to wait until
age 65. Despite the idle talk that 70 is the new 60,
all but 9% of respondents are planning to be out of
practice by the start of their seventh decade.
The numbers, which show a determined
trend toward lower retirement ages, could clearly have
a significant effect on healthcare policy. The pressures
on the profession in the last decade have reduced the
pleasure many practitioners find in the practice of
medicine.
Commented one Hamilton, ON, respondent,
a 52-year-old FP: "The number of patients I see in an
average day is about 25% higher than it was 10 years
ago. I'm making better money, but I'm tired. My kids
are older. The family hasn't spent enough time together.
On bad days I'm beginning to wonder if I made the right
career choice. I'll be extremely disappointed in myself
if I'm not out of practice in the next 10 years. My
wife will be too."
There's the rub. Increased patient
loads have bolstered physician investments and at the
same time taken a toll on individual lifestyles. More
doctors than ever not only want to retire, they are
more confident that they have the savings to do so.
|
Who completed the survey?
Just over 800 of you sent in
the completed form. The effort you put in is much
appreciated by the editors and, judging from the
popularity of last year's survey results, will
be most helpful to your colleagues as well. Thank
you.
A typical respondent was between
ages 46 and 60 (62%), male (74%); lived in Ontario
(39%) and was married or its equi-valent (89%).
Other regions of the country were well represented
with 19% coming from Quebec; 31% from Manitoba
and further west. Eleven percent lived in the
Atlantic provinces. Looking more closely at the
age breakdown, 32% of physician respondents were
age 45 or under, with 60% of those under age 40.
Twenty-seven percent of respondents
were specialists, 73% were in general or family
practice.
|
NET
WORTH
That said, only 10% of respondents reported a net worth
of over $2 million, a figure many financial advisors
might consider a minimum for a physician hoping to maintain
the same standard of living after stopping practice
as they did before. On a brighter note, 61% reported
net worth of $500,000 or more and there was a clear
correlation between age and net worth. More than 90%
of physicians over age 50 reported a net worth of more
than $1 million. Are things getting better? Absolutely.
Fully 67% of you reported that your net worth had increased
in the last 12 months with only 5% reporting a decline.
The rest of you said things stayed about the same.
Nearly all respondents put their
faith and their money in RRSPs, though 2% indicated
they shunned the plans that virtually every financial
advisor says you must have. More MDs than ever contribute
to a plan every month, 40%, though the majority of you,
52%, sock away dough into your plan once a year —
toward the end of February as the deadline for taking
the deduction for the previous year looms. Eight percent
of respondents indicated they had plans to, but didn't
contribute every year. A solid 82% of MDs said they
used spousal RRSPs, which make good sense. They've been
growing in use (For more on RRSP contributions, see
"Are you paying more income
tax than you should?").
Mutual funds and stocks are by
far the most popular investment vehicles, with most
physicians favouring both equally. Despite low interest
rates GICs receive 15% of your money, with another 12%
also using bonds.
RRSPs and homes make up the bulk
of most nest eggs and share about equally in their contribution
to overall net worth. RRSPs are slightly ahead to represent
32% and homes a close second at 29%. Third on this list
was stock holdings at 13% of the value of holding on
average. Vacation homes accounted for 8% of net worth
on average.
WHAT
TROUBLES YOU, DOC?
While saving for retirement was the most pressing financial
concern, you listed several other areas that you found
challenging. Twelve percent of respondents were concerned
that they would not be able to adequately fund their
children's' education; 11% struggled to meet rising
living expenses; and a significant 10% indicated they
had maxed out their lines of credit and were concerned
about paying them off. Student debt was a significant
factor in the lives of physicians under age 35 with
25% reporting that it represented a significant financial
challenge. Taxes were less of a concern than they have
been with only 2% of MDs reporting trouble meeting them.
The conclusion: For most physicians,
things are going well financially — at least for
the time being.
|
PERSONAL FINANCE
