Recession Forces Physicians to Rethink Retirement

The recession and its impact on investment portfolios, as well as declining Medicare and Medicaid reimbursements, are making physicians rethink their retirement dates.

Some physicians have seen their stock markets portfolios fall by as much as 50 percent.  In today’s economy, selling practices might not bring the anticipated profit, according to William Jessee, M.D., president and CEO of the Medical Group Management Association.  “I look at my 401(k) and think ‘Okay, I just turned 62, and 70 is starting to look like a better retirement field,'” Dr. Jessee said.20071003_nest_egg_18

A 2007 survey of 1,200 physicians found that 48 percent aged 50 to 65 were planning to retire, find non-clinical jobs, work part-time, close their practices to new patients and/or substantially reduce their patient load.  Since the survey was conducted, Americans’ retirement funds have lost as much as $2 trillion.

“It has not been entertaining watching all my hard-earned money disappear,” according to Jeffrey Sankoff, 41, a Denver physician.  “But I’ve got about 10 to 15 years before I need to worry because my 401(k) will just sit there and eventually recover and grow.  Those physicians closer to retirement age – hopefully their portfolio is balanced in such as way that this catastrophe won’t have as big of an impact as it’s had on me.”

The silver lining in these deferred retirements is that they could prevent a physician shortage, a result of medical schools capping their enrollments at 16,000 students per year because they believed that managed care would create a glut.  It is estimated the shortage could be as much as 250,000 physicians in the next 10 years.

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