For many physicians pondering retirement, age itself isn’t the number one driver of their desire to continue practicing medicine. Rather, they feel deeply drawn to care for their patients for as long as they’re willing and able, while others plan to reclaim those years “lost” to med school, residency, and fellowship by retiring as soon as possible to enjoy life. Whether or not you decide to retire early or retire late, the volume of physicians nearing this stage of life has never been higher.
According to a 2020 report published by the Association of American Medical Colleges (AAMC), 45% of practicing physicians are over 55. This means more than 2 of every 5 active physicians will be over 65 in the next decade. With 65 the reported median physician retirement age, this would suggest nearly half of all physicians who are currently practicing will be retired by 2030. However, this may be a conservative estimate. According to a 2019 study published by AMA Insurance and highlighted by the American Medical Association, 30% of physicians retire between the ages of 60 and 65 and 12% retire before the age of 60. These looming retirements are one factor contributing to the much-discussed physician shortage.
You’ve heard it before, the aging Baby Boomer population combined with a significant percentage of physicians at or nearing retirement age amounts to an upcoming physician shortage of a magnitude for which no one has adequately planned. And now, COVID has introduced yet another factor likely worsening (or at least, speeding the arrival of) the shortage.
According to a 2021 Jackson Physician Search Whitepaper: On the Verge of a Physician Turnover Epidemic, the COVID-19 pandemic has made half of today’s physicians reconsider their career plans. Of those, 21% of physicians are considering early retirement and another 15% are considering changing professions altogether. A March 2021 poll conducted by MGMA appears to confirm the trend. In the poll, 28% of healthcare administrators said a physician at their organization had unexpectedly retired in the past year.
The pandemic has certainly placed a strain on physicians, but it has only fanned the flames of an already significant physician burnout problem. Pre-COVID data found 44% of physicians experienced burnout, and more recent studies suggest the pandemic has exacerbated the problem. To what degree does burnout cause physicians to retire early? And what other factors contribute to early retirements? On the other hand, some physicians may have delayed retirement due to the pandemic – citing economic instability or logistical concerns. Others felt a heightened sense of obligation to their patients or to the broader community during these troubling times.
This article will explore the factors contributing to both early and late retirements and perhaps help you identify with which path you are aligned.
What Causes Physicians to Retire Early?
As noted above, stressful circumstances – such as a global pandemic – certainly contribute to physician retirement decisions. Beyond the stress and burnout caused by the pandemic, personal health concerns were also a common factor, especially for older physicians who were at a higher risk of severe illness and death from the new virus. In an October 2020 article, the Washington Post featured several physicians for whom this was the case. Whether driven by their own fears or the fears of loved ones, these physicians opted to retire rather than put themselves at risk.
Stress and Burnout
While these stories are not uncommon, it’s rare for a single event to evoke such a response. More often, it’s the ongoing stress experienced by physicians that drives them to retire early. In looking at the AAMC data on physician age by specialty, several of the specialties noted to have high levels of burnout, such as critical care and emergency medicine, have a lower percentage of physicians practicing over 55 (21% and 35%, respectively) compared to the average for all specialties (45%). So, one might conclude physicians working in high-stress fields are more likely to retire early.
Perhaps most importantly, physicians make retirement decisions based on their perceived financial preparedness for this next stage of life. Of course, as discussed in an article for Medical Economics, financial readiness is largely subjective – that is, the figure required to retire comfortably depends on the level of comfort one requires. Still, median physician salaries are considerably higher than the national median, so even after factoring in hefty student loan debt, some physicians will reach financial readiness at a younger age and may therefore opt to retire early. Physicians in the highest-earning specialties may reach this stage even earlier.
Being financially ready to retire doesn’t mean you have to retire or even want to retire. However, sometimes early retirement is forced upon you. Physicians may find themselves facing health challenges that force them into early retirement, or they may feel obliged to retire to care for a parent or spouse in poor health.
Some physicians retire from medicine early to pursue a “second act,” be it a new business venture, a teaching career, or non-profit work. Physicians are highly driven individuals, and once they achieve success in their given field, they may be drawn to pursue a new challenge. While the movement to achieve “financial independence and retire early” (FIRE) is not unique to physicians, it has received significant attention. An article for HCP Live outlines how the FIRE idea impacts different types of physicians.
Why Do Physicians Delay Retirement?
While there is much discussion about the impact of physicians retiring early, if the AMA Insurance report is correct, 58% of physicians will retire after 65. So, what causes physicians to extend their careers? At a high level, the answers look oddly familiar.
While some physicians took the pandemic as a reason to retire early, others saw it as a reason to put retirement plans on hold. Some felt a sense of obligation to patients in need, some worried about how economic instability would impact retirement funds, while others knew the logistics of selling a practice or recruiting their replacement would be next to impossible during a pandemic.
While high-stress physician jobs can certainly drive a physician into early retirement, the stress of retirement planning may cause some physicians to put off retirement indefinitely. This is especially true for physicians who own a practice and must address additional details of retirement planning such as selling their stake and transitioning long-term patients. Primary care physicians, who cultivate relationships with patients over the course of a lifetime, may find the concept of transitioning patients to a new provider particularly difficult.
The aforementioned Medical Economics article notes that while physicians’ affluence allows them to save more than the average working professional, many of them also spend more – and will likely continue to do so in retirement. Thus, the “magic number” that a physician feels he or she needs to save in order to retire comfortably will likely be relatively high, and depending on how much of their income they are able to save for retirement, it may take longer to achieve it.
According to a systematic review of 65 retirement studies, published by Human Resources for Health, one of the primary reasons physicians delay retirement is out of concern for their patients. They may also feel a broader moral obligation to provide care to communities in crisis – either due to the global pandemic, a physician shortage, or other difficulties – leading many to work past retirement age or even come out of retirement to serve.
The hardworking, high-achieving individuals who pursue physician careers don’t achieve their goals by sitting around and relaxing, and many physicians approaching retirement age have no desire to start now! They can’t imagine a future without work in some capacity. In fact, a 2019 retirement survey conducted by Jackson Physician Search, found nearly a third (28%) of respondents planned to continue working part-time post-retirement. Only 17% expected to take full retirement. As long as they are able, they will practice medicine.
Regardless of physicians’ reasons for retiring, the looming mass exodus could not come at a worse time. The most recent AAMC study on the physician shortage projects a deficit of 37,800 to 124,000 physicians by 2034. That shortage includes shortfalls of 17,800 to 48,000 primary care physicians and 21,000 to 77,100 specialists.
What does this mean for physicians approaching retirement? Are you morally obligated to keep working? Breathe easy. According to AAMC President and CEO David J. Skorton, MD, the multi-pronged solution doesn’t rest on aging physicians, but rather, it starts with educating and training enough new physicians to meet the increasing demand, diversifying the physician workforce, and improving the nation’s preparedness for future public health crises.
That said, while the problem cannot be solved at an individual level, physicians who worry about boredom or losing their sense of purpose post-retirement may want to consider ways to continue to provide care in some capacity – via telemedicine or significantly scaled back hours – as long as they are willing and able. Your community will thank you. And to those who are ready to hang up the white coat for good, you too should be thanked for your service and wished well in retirement!
If you are approaching retirement and looking for a job opportunity that allows for more flexibility as you make the transition, a conversation with a Jackson Physician Search recruiter may be just what you need. Contact us today or search our open positions now.
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