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MD Financial Management session focuses on financial planning for female physicians

Female physicians can take more responsibility for their financial well-being when they have sound financial planning.

That was the key takeaway from a presentation by Bridget Paton, a senior financial consultant for MD Financial Management, at a well-attended lunch session prior to the Canadian Medical Association (CMA) general council meeting in Halifax.

The session, a first at the CMA annual meeting, was introduced by Dr. Suzanne Strasberg, chair of the MD Financial Management Board of Directors — the first woman to hold this post.

Paton said she is passionate about financial literacy for female physicians “because I’ve seen a lot of successful, intelligent women find themselves in financially compromised positions due to a lack of financial planning and paying sufficient attention to their own well-being.”

Paton opened by addressing the demographic realities: women comprise a greater percentage of the older population in Canada, with 84% of Canada’s centenarians being women.

She noted that the number of female physicians is increasing, and by 2030 they will outnumber their male counterparts. However, while female physicians are making up a larger percentage of the population this is not yet matched by greater involvement in financial decision-making.

Paton presented statistics showing men are far more likely to be solely responsible for family financial matters. In addition, female physicians tend to have lower incomes and financial assets, especially at a young age.

To address these deficiencies, Paton said women physicians can work with a financial advisor to create a financial “road map” that fits their needs and helps them plan for the type of retirement they want.

Paton discussed the benefits of incorporating a practice to allow a physician to take advantage of having more after-tax income. She noted that taking such a step is not as onerous, as some might believe and has both income-splitting and tax deferral advantages.

Because the business tax rate is much lower than the personal tax rate in many circumstances, she advised “if you’re in a position to save money … it makes sense to incorporate.”

Other tax-optimization strategies are available for female physicians, Paton noted, none inherently good or bad but possibly beneficial depending on a person’s financial situation.

She concluded by stating that female women physicians don’t have to be experts in financial planning, having some knowledge of investment basics can make them more comfortable in making financial decisions.