In a broad survey of U.S. physicians by Merritt Hawkins in 2014, nearly 42 percent of those surveyed aged 46 and older said they plan to accelerate their retirement due to current changes in the healthcare industry. In the same survey, more than 55 percent of physicians reported their current morale as somewhat or very negative.
Numbers like those suggest some physicians could be rushing for the exits before their retirement ducks are in a row, which can lead to some regrettable outcomes, experts say. Among them: nest eggs that are too small or too heavily invested in risky assets, missed opportunities for disposing of practice assets, and depression resulting from a lack of purpose once work ends.
Ophthalmologist Arnold Pearlstone retired nearly five years ago at age 80, not because he failed to plan for retirement, but precisely because he planned so well for so long.
He and his practice partners started up a 401(k) plan decades ago when the concept was still new, and Pearlstone learned all he could about investments.
"We were all pretty conscientious about saving and we really had a pretty good amount put away, so we didn't have to worry," he says.
What did concern him was how he was going to spend his time in retirement. He loved practicing medicine and knew he wanted to do it as long as possible.
And so 23 years ago, about the time many people start retiring, Pearlstone and his wife, Marion (now deceased), established a foundation they called Eye Care for the Underprivileged. Through that foundation they received donations in addition to their own and established a clinic in Jamaica while Pearlstone was still actively practicing.
"I didn't limit the foundation's scope to Jamaica, because I thought I might one day need it for other clinics I wanted to open," he says. "I didn't know what I was going to be doing, so when I set up the fund I left it open-ended in case later on I wanted to volunteer and needed to purchase equipment."
Sure enough, as Pearlstone finally started winding down his practice, he contacted AmeriCares, a humanitarian aid organization. He began working at an AmeriCares free clinic in Bridgeport, Conn., two weeks after he retired in 2010, taking most of his office equipment with him and donating it to the clinic. Later, he used money from his foundation to add equipment to other AmeriCares clinic locations. He keeps his Connecticut medical license current with 50 hours of continuing medical education every two years.
"My advice is to not just quit when you retire," he says. "Find someplace to use those skills where they can make a difference. It's good for you to keep the brain going."
As for the more practical aspects of retirement planning, getting going on those is equally important, experts say.
"Start early, because everything seems to take longer than you think it will," says Roy Bossen, a partner at Hinshaw & Culbertson LLP, with experience in medical office sales and acquisitions.
Increasingly, finding a junior partner willing to buy you out and continue the practice as it was is a rare find, Bossen says. Instead, you might have to consider a multi-year process where you join a hospital network for a few years at the end your career.
"If a hospital really wants a physician, it will often assume the lease or buy the building as part of the transaction," says Bossen. "They won't pay more than fair-market value," but having that obligation off your plate before you retire could be worth it if finding and keeping a tenant is difficult in your market, he says.