Skip to content 
For most female physicians, retirement isn’t just a milestone, it’s a hard-won victory achieved after decades of using medical brilliance to combat systemic barriers that threaten financial security.
Despite women now comprising nearly 38% (AAMC 2023) of the physician workforce – a historic milestone – their financial outcomes starkly contrast with those of their male peers. Data from the American Medical Association (AMA) underscores a sobering reality: female physicians earn, on average, $2 million less over their careers than male physicians.
This disparity is magnified by the underrepresentation of women in high-paying specialties such as orthopedic surgery and cardiology, where male dominance persists. These financial inequalities ripple into retirement savings, with women accumulating 30% less than their male counterparts, leaving them vulnerable as they approach their golden years.
The troubling trend of early retirement among women in medicine further exacerbates this financial gap. Burnout, caregiving responsibilities, and workplace discrimination frequently drive these decisions. For many women, retiring early is not a choice but a consequence of barriers that disproportionately affect them.
And the challenges extend beyond finances. Women often approach career and life planning through a lens of caregiving and community-building, traits that are celebrated socially but penalized economically.
Societal expectations position women as primary caregivers for children and aging parents, a role that frequently stifles earning potential.
Image Source: U.S. Bank
Biological realities, such as longer lifespans (according to the CDC, women outlive men by an average of 6 years), further complicate retirement planning.
Longer Lifespan = Extended Retirement Needs
Women’s longevity, while a gift, introduces financial complications. According to the Social
Security Administration (SSA), the average 65-year-old woman can expect to live for 19.75 more years, compared to 16.95 years for men.
This extended lifespan requires women to stretch their savings over more years while accounting for rising healthcare costs and inflation, making aggressive saving critical. Financial experts like Fidelity recommend setting aside 15% of pre-tax income annually, a target that is often easier said than done for women.
Inflation-adjusted withdrawal strategies are essential, as the purchasing power of savings erodes over time. Longevity annuities, which provide guaranteed income starting at age 80 or 85, offer a safety net for those worried about outliving their assets.
Higher Healthcare Costs in Retirement
Women face significantly higher healthcare expenses than men, a reality that warrants meticulous planning. According to the Retiree Health Cost Index (Milliman 2023), a retired 65-year-old woman will spend approximately $155,000 on healthcare, compared to $134,000 for men.
This gap stems from longer lifespans and greater utilization of preventative services, such as mammograms and osteoporosis screenings. Chronic conditions like autoimmune disease and arthritis, which disproportionately affect women, further amplify costs.
To mitigate these expenses, Health Savings Accounts (HSAs) are invaluable. Contributions to HSAs are tax-deductible, grow tax-free, and can be withdrawn without penalties for qualified medical expenses. Long-term care insurance is another prudent investment, covering services like in-home care or assisted living, which Medicare does not fully address.
The Caregiving Penalty, Career Interruptions, and Resume Gaps
Compared to their male counterparts, female physicians are much more likely to reduce their hours or exit the workforce temporarily to care for children or aging parents. These interruptions cost women an estimated $300,000 in lifetime earnings, creating gaps in retirement savings. Career pauses also delay promotions and salary increases, perpetuating the wage gap.
To counteract this, female physicians should prioritize retirement contributions during peak earning years, typically in their 40s and 50s. Negotiating flexible work arrangements, such as part-time roles with benefits or telemedicine opportunities, can help balance caregiving and career continuity.
Alas, the impact of career breaks extends beyond lost income. Many women face resume gaps after stepping away to raise children, which can hinder their ability to re-enter the workforce at prior compensation levels.
According to the American Association of Medical Colleges (AAMC), the main reason around 40% of female physicians took a career hiatus or reduced their hours was for their family. They have even reported difficulty securing full-time positions upon returning, often having to accept lower-paying roles or part-time work.
These gaps not only reduce immediate earnings but also limit opportunities for leadership roles, bonuses, and retirement plan contributions. For women in procedural specialties, prolonged absences may even require retraining or recertification, adding to the financial and logistical burdens.
Social Security and Pension Disparities
Lower lifetime earnings translate to reduced Social Security benefits for women. On average, women are 80% more likely to face poverty in retirement than men. The motherhood wage gap – a 20% earnings reduction for women with children – aggravates this disparity.
Optimizing Social Security requires strategic timing. Delaying benefits until age 70 increases monthly payouts by 76% compared to claiming at 62. Married couples should coordinate spousal benefits to maximize combined income.
For example, a lower-earning spouse might claim benefits early while the higher earner delays, ensuring survivor benefits are maximized.
Limited Part-Time Work Opportunities in Retirement
While many physicians transition to part-time roles post-retirement, women often face steeper barriers than men. Ageism, credentialing hurdles, and biases against women in leadership roles contribute to the gap.
Telemedicine platforms like Teladoc or Amwell offer flexible alternatives, allowing retired physicians to consult remotely. However, as we’ve written in the past, the future of telemedicine in the States remains uncertain.
Academic affiliations, such as adjunct professorships or mentorship programs, provide both income and intellectual fulfillment without the demands of a full-time practice.
Gender Investing Gap and Risk Aversion
Women’s investment portfolios historically outperformed men’s by 0.4%, yet they are far less likely to invest, with 52% of women revealing that they have never invested.
While women’s disciplined, long-term approach often results in better outcomes over decades, building the confidence to begin investing requires empowering women with the tools they need to take the first step.
Diversifying investments across equities (60-70%), bonds, and real estate can balance growth and stability. Robo-advisors like Betterment or Ellevest offer low-cost, automated portfolios tailored to women’s financial goals, making strides in demystifying the investment process.
Burnout and Mental Health Challenges
According to the AMA, 54.5% of women physicians reported experiencing at least one symptom of burnout–compared to only 42% of men. Burnout not only hastens retirement but also undermines post-retirement well-being.
Phased retirement models, where clinicians gradually reduce work hours while exploring passions like medical writing or advocacy, can ease this transition. Peer support networks, such as Physicians Anonymous or online forums, provide safe spaces to share struggles and strategies.
Strategies for a Secure and Fulfilling Retirement:
Maximizing Retirement Accounts and Tax Efficiency
Tax-advantaged retirement accounts are the cornerstone of wealth-building. Female physicians should maximize contributions to employer-sponsored plans like 401(k)s or 403(b)s, which allow contributions of up to $23,500 annually.
High earners can leverage backdoor Roth IRA conversions to bypass income limits, ensuring tax-free withdrawals in retirement. Health Savings Accounts (HSAs) are particularly powerful: contributions are tax-deductible, growth is tax-free, and withdrawals for medical expenses incur no penalties.
Building Multiple Income Streams
Diversifying income sources insulates retirees from market volatility. Real estate investments, such as rental properties or real estate investment trusts (REITs), generate passive income.
Dividend-paying stocks in stable sectors like healthcare or utilities provide steady cash flow. Annuities, though controversial for their fees, offer guaranteed income for risk-averse investors. Female physicians with niche expertise can monetize their knowledge through medical consulting, expert witness testimony, or textbook authorship.
Collaborating with Financial Advisors
A financial advisor specializing in physicians’ finances can navigate the complexities of retirement planning. Women who work with advisors are far more likely to be prepared for retirement.
Advisors can optimize tax strategies, such as Roth conversions during low-income years, and structure estates to minimize probate costs. They also provide accountability, ensuring clients (that’s you) stay on track despite market downturns or personal setbacks.
Estate and Legacy Planning
Comprehensive estate planning protects assets and ensures wishes are honored. Revocable living trusts avoid probate, maintain privacy, and allow seamless asset transfer. Charitable remainder trusts (CRT) enable physicians to donate to causes like medical scholarships while receiving tax deductions and lifetime income. Updating beneficiaries on retirement accounts and insurance policies is critical, as outdated designations can override wills.
A Legacy Beyond the Clinic
Retirement for female physicians is often more bittersweet than their male peers. The sad reality is that many women don’t even get the chance to retire because they end up exiting medicine long before they’re anywhere close to retirement age.
Whether by choice, or by circumstance, 40% of women either go part-time or leave medicine altogether within six years of completing their residencies. Although strides have been made in making practicing medicine more feasible for women, with continued advocacy for equal pay and equal recognition, there is still a long way to go.
In light of these disparities, women physicians can take the milestone of retirement not as an end, but as an evolution – a chance to redefine their purpose beyond the exam room. Whether that comes through mentoring the next generation or doctors, advocating for health equity, or pursuing passions shelved during demanding careers, this chapter offers unparalleled freedom.
The journey is undeniably fraught with obstacles, from systemic pay gaps to societal expectations, but the best weapon against uncertainty is taking control of your retirement while you’re still in your peak earning years.
