A physician’s financial life journey
As you move through life, your needs change.
So do your financial goals.
You’ve already achieved some big milestones and are well on your way to achieving more. Now is the time to establish good financial habits and to develop some long-term goals.
Start medical school
Congratulations! A career in medicine is rewarding, but it can leave you with a large debt if you’re not careful about managing your expenses and your borrowing costs.
About 30% of medical students expect to leave school with a debt of more than $100,0001
Graduate from medical school and start residency
Good news: you’re earning a salary. Bad news: you likely have student debt.
The average resident salary in Canada is $63,0002
Start tackling your debt
Determine how much you own, and how much you owe. This will help you set realistic goals to pay down current debt and avoid accumulating more.
Start your practice
Go it alone or join a group?
17% of Canadian physicians have a solo practice
40% have a group practice with other physicians or other health professionals
41% are based in a hospital setting3
Ready to settle down?
Canadians are waiting longer to get married. Between 1972 and 2008, the average age at first marriage increased to
29.1 (from 22.5) for women
31.1 (from 24.9) for men4
Buy your first home
The average price of a house in Canada is $433,649.5
Start a family
Women are waiting longer to have children. Over half of all births in Canada in 2011 were to women aged 30 and older.6
Early Career – Financial Focus
• Start investing
• Create a debt repayment plan
• Purchase insurance
Career. Family. Aging parents. This may be the busiest stage of your life. A comprehensive financial plan will help keep your short- and long-term goals on track.
Set up a retirement plan
Now that you’ve paid off all or most of your student debt and are earning a salary, your MD Advisor can help you create an investment plan for retirement. As you progress through your working years, you’ll be able to set aside even more money.
Education costs keep rising
Start preparing now for your kids’ post-secondary education. Save a little every month in an MD registered education savings plan (RESP).
Undergrad tuition costs increased by 3.9% per year, on average, between 2010 and 20157
Blended families often mean more complicated financial considerations when it comes to estate planning—start by making sure your will is up-to-date.
In 2011, stepfamilies made up 12.6% of Canada’s 3.7 million families with children8
Managing the needs of both adult children and aging parents can contribute to financial stress.
28% of Canadians provide care to family members or friends with long-term health conditions, disability needs or age-related needs9
More than 42% of Canadians in their 20s currently live in their parents’ homes10
Thinking about incorporation?
Most physicians who incorporate their practice do so primarily for the tax advantages.
Set up an estate plan
To make sure your legacy is passed on according to your wishes, your plan should include an updated will, provisions for minor children and any necessary changes to beneficiaries.
Mid Career – Financial Focus
• Consider incorporation
• Initiate retirement planning
• Begin estate planning
You’ve worked hard to get to this point, but you still have some big decisions ahead. How will you transition into retirement? How will you spend your time: travelling, volunteering or continuing to work part-time?
Take time to consider what’s most important to you.
38% of Canadian physicians are semi-retired before they retire fully
23% of Canadian physicians remain semi-retired for more than 10 years11
Physicians’ top five retirement goals12
1. Be financially secure
2. Spend more time with family
3. Prepare for non-financial aspects of retirement
4. Give back to community
5. Volunteer/help others
Wind down your practice
Closing your practice requires just as much care as opening it did. MD can walk you through the steps required to dissolve your corporation and ensure a seamless transition into retirement.
Late-career – financial focus
• Set retirement goals
• Optimize retirement income
• Manage estate planning
We’re here for you every step of the way.
MD offers personalized and objective financial advice at every stage of a physician’s career—from medical school right through to retirement.
1. 2012 National Physician Survey. 2Canadian Resident Matching Service (www.carms.ca) – Program Year 3. 32014 National Physician Survey. 4Statistics Canada. 5Canadian Real Estate Association, September 2015. 6Statistics Canada, 2011. 7Statistics Canada. 8Statistics Canada Census 2011. 9Statistics Canada, 2012. 10Statistics Canada, 2012. 11Canadian Medical Association Baseline Research 2010. 12 Canadian Medical Association Baseline Research 2010.
The information contained in this document is not intended to offer foreign or domestic taxation, legal, accounting or similar professional advice, nor is it intended to replace the advice of independent tax, accounting or legal professionals. Incorporation guidance is limited to asset allocation and integrating corporate entities into financial plans and wealth strategies. Any tax-related information is applicable to Canadian residents only and is in accordance with current Canadian tax law including judicial and administrative interpretation. The information and strategies presented here may not be suitable for U.S. persons (citizens, residents or green card holders) or non-residents of Canada, or for situations involving such individuals. Employees of the MD Group of Companies are not authorized to make any determination of a client’s U.S. status or tax filing obligations, whether foreign or domestic. The MD ExO® service provides financial products and guidance to clients, delivered through the MD Group of Companies (MD Financial Management Inc., MD Management Limited, MD Private Trust Company, MD Life Insurance Company and
MD Insurance Agency Limited). For a detailed list of these companies, visit md.ca. MD Financial Management provides financial products and services, the MD Family of Funds and investment counselling services through the MD Group of Companies.
Estate and trust services are offered through MD Private Trust Company.