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When it comes to retirement planning and wealth management, General Practitioners (GPs) are in a unique position.
Despite earning strong incomes mid to late in their career, many medical professionals find themselves at a financial disadvantage in the early years. Without a considered approach to wealth management, it can take some time to catch up.
With many years of experience advising professionals on their retirement strategies, investments, and superannuation, we have seen one clear truth: income does not equal wealth. For GPs in particular, even high incomes need to be managed carefully to ensure comfort in their later years.
Why is there a wealth gap for GPs?
Most GPs will eventually earn a high income, but it takes time to get there. After seven to nine years of intense study, lengthy placements, unpaid administrative hours, and possibly part-time work if you're a woman, you will likely be in your mid-30s or older by the time you reach your peak earning years.
Meanwhile, the cost of study is higher than most professions, HECS debts are larger, and early-career salaries hover well below professional averages, leaving GPs behind the eight ball financially. By the time you're ready to build wealth, your peers from other fields might already be a decade ahead.
Common headwinds to wealth accumulation beyond a slow start
Being intelligent and highly capable doesn’t make you immune to financial missteps. In fact, many GPs fall into similar traps as the rest of us:
Lifestyle catch-up
Trying to match peers who’ve had a financial head start can lead to over-borrowing to keep up. This can lead to unnecessary financial stress or higher interest costs (consider non-deductible interest as an additional tax on earnings).
Delayed gratification burnout
After years of sacrifice, it’s common to splurge suddenly, which can undermine longer-term goals.
Overconfidence
With limited time and high cognitive load, some GPs try to DIY their finances, only to fall short due to lack of bandwidth or nuanced knowledge.
Ignoring tax
It is easy to underestimate how much of your income is lost to tax, and what you have left for savings, particularly if you are self-employed.
Skipping insurance
Some GPs, despite earning well, don’t insure their ability to learn, which can be devastating if illness or injury strikes.
The long game: It pays to plan early
A strict savings plan and a detailed, personalised financial plan should be non- negotiable, particularly for GPs starting their savings journey relatively late.
Every practitioner is different. Some intend to semi-retire at 60, others wish to work part-time into their late 70s. Either way, understanding these preferences early helps create a plan that reflects your goals, not someone else’s.
Even if your income feels modest to start with, building good habits early (and avoiding costly mistakes) is the most effective way to bridge the gap.
Time is money: Save yours by outsourcing
GPs work hard. Between long hours, complex patient needs and administrative overload, there’s limited time left for spreadsheets and financial analysis.
You may be more than capable of managing finances yourself, but your time and energy are finite. Outsourcing to a professional can actually save money and headspace in the long run.
Superannuation: Underutilised and under-rated
Superannuation is one of the most powerful tools available to GPs to minimise tax and maximise long-term wealth. Contributions are generally taxed at 15% (compared to the 39– 47% most GPs pay personally), and 30% if taxable income exceeds $250,000. Growth inside super compounds faster than almost any other structure (income is taxed at 15%, long-term gains at just 10%).
While the proposed Division 296 changes may eventually affect very high balances ($3M+), the bigger issue for most GPs right now is under-contributing. Without an employer to mandate contributions (as is the case for many contractors), it’s easy to fall behind.
A smart approach to investing: Value over hype
GPs are used to evidence-based decision-making and that logic can be applied to investing too.
A value-style approach focused on assets priced below intrinsic value can help avoid the trap of chasing what’s 'hot'. With less time to recover from major mistakes, GPs need strategies that are robust, not reactive.
Approach investment as laying out funds now to receive more cash in the future, rather than speculation. Avoid playing into greater fool theory, where instead of expecting a return on investment, you are betting you will find someone willing to pay much more for it in the future.
Do not DIY your financial well-being
Common mistakes we see include:
- Taking on too much debt too early
- Letting admin fatigue lead to short-term financial decisions
- Trying to invest without the right guidance or due diligence
- Failing to protect income with appropriate insurance
- Not contributing regularly enough to super
If any of this sounds familiar, you’re not alone.
Estate planning and practice succession
For GPs with practices, trusts, or SMSFs, estate planning requires extra care. You need to pass on control, not just assets. Business continuity planning, key person insurance, and buy-sell agreements should all be considered to protect your legacy.
Final word: Start with the end in mind
Whether your goal is to semi-retire at 60, buy your dream home, or support your children’s education, it starts with a plan.
Work backwards from your ideal retirement lifestyle. Understand your available after-tax income. Explore what’s possible with financial modelling. A great financial plan doesn’t just track your progress, it puts you back in control.
Need help building a strategy tailored to you?
At RSM, we specialise in helping medical professionals navigate complex financial decisions for peace of mind. Reach out today to discuss your goals.
