Retirement planning for women physicians is really not a prevalent topic in the financial planning world, but it should be. As per the last edition of the AMA Insurance Report on U.S. Physicians’ Financial Preparedness: Women Physicians Segment, it appears the number one concern among women physicians is their readiness for retirement. For most of them, they felt comfortable that they had what they needed, but clearly the other half did not.
This is a curious situation: women physicians are earning more than they ever did, now that they are accepted by their peers to practice in specialties and sub-specialties, but they are accumulating less for their own retirement. It seems contradictory.
On the face of it, it is. But a deeper look reveals an interesting set of facts: women earn less than their male counterparts in all areas of medicine, including these specialties; women physicians move to a part-time position or take themselves out of the workplace for a few years as caregivers to parents and/or children; they are less savvy about the world of personal finances; and they have a greater percentage of divorce than the population at large. All are issues which can impact the financial condition at or near retirement.
So how do you catch up? These retirement planning guidelines are true for women physicians as well as for all women professionals.
Retirement Planning for Women Physicians
First, do not ignore it. It will not go away by itself. Yes, your free time is very limited and the demands for personal time are great, money issues being low on the list. If you will take some chunks of time to devote to it, most financial planners will be willing to segment the issues and tackle bits of it rather than all of it at once. It does not need to be an all-or-nothing proposition.
Secondly, find a retirement planner who has some experience working with women physicians and those who have little time to devote to this endeavor. Those who are committed to hours of time to sit with you to prepare and execute a financial plan are probably not a good match for you. Find out from your peers who they work with and make an appointment after office hours (use that as a barometer of their willingness to work with you!) or on your day off (Right!). Use that time to determine how the planner is compensated (opt for fee-only), how often you will need to meet with them, when they can meet with you, and how long it will take to get the plan implemented. Can the planner take responsibility to minimize the time you need to be involved and maximize the time you do have to physically meet? Is she willing to come to your office or would you prefer to meet outside your office for focus and less distractions?
Thirdly, is the planner self-directed, meaning can they anticipate what your needs are as to the timing of actions you need to take based on what the calendar says? Can they remind you of your need to make that contribution to your 401k by the end of the year and they are keeping track of the contributions to date? Are they looking out for your greatest tax deductions and advising you when to buy or lease a car? Will they act as your personal CFO (chief financial officer)? Is that what you want in a relationship?
I hope this helped those of you out there that are looking for advice on retirement planning for women physicians. Keep these thoughts in mind and do not be afraid to ask these tough questions. Your financial security is at stake.
Lynn S Evans, CFP is the author of Power of the Purse, Fear-Free Finances for Baby Boomer Women, available on amazon.com