Burnout is pushing Canadian physicians and incorporated professionals toward early retirement — and most aren't financially ready

In a 2025 Medscape Canada survey of more than 1,000 Canadian physicians, more than half (57%) of doctors under the age of 45 expected to retire in their 40s or 50s — with burnout and the desire for more personal time as the most commonly cited reasons.

The decision to retire early — and leave the pool of qualified medical professionals — has real financial consequences. For instance, most incorporated physicians build their retirement strategy around a full career ending at age 65. This means maximizing your salary and dividend mix inside a Canadian-Controlled Private Corporation (CCPC), while accumulating Registered Retirement Savings Plan (RRSP) room and timing Canada Pension Plan (CPP) contributions for a standard-age payout. The idea of exiting 10 years early means recalculating all those assumptions — to determine if the plan is possible.

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What changes when you retire at 55 instead of 65

To be clear, like many professionals with the opportunity to incorporate, such as physicians, accountants or Realtors, will develop a financial infrastructure that is time-sensitive. Each stage and decision impacts the next stage and decision. For instance, using a CCPC an incorporated professional can accumulate passive investment income during years of high earnings. At the same time, their RRSP contribution room grows in step with their earned income — usually salary drawn from the corporation. CPP entitlement grows with contributions, with fewer contributing years resulting in a smaller benefit upon retirement. As a result, any early exit compresses all three and results in less retirement income.

To illustrate, let’s assume a physician stops drawing a salary at age 55. At this point, the doctor will immediately stop accumulating RRSP contribution room, and the passive income held inside the corporation will face a higher effective tax rate once the small business deduction phases out — a threshold that arrives faster when investment income builds without active income to offset it.

Then there is the CPP gap, which is particularly easy to underestimate. CPP benefits are calculated based on contributions over a working lifetime, with low-income years (including zero-income retirement years) pulling down the average. A physician who retires at 55 and waits until 65 to claim CPP will still receive a smaller benefit than one who contributed through 65, because the early retirement years count as zeros in the calculation. Taking CPP at 60 instead of waiting only deepens the loss since benefits are permanently reduced by 0.6% per month before age 65, a total cut of 36% at the earliest possible start date.

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The OAS eligibility gap you can’t bridge

Then there is Old Age Security (OAS), which is not available to collect until you are aged 65. That means a physician who retires at 55 faces a 10-year window with no OAS income and a CPP benefit that either hasn’t started or is being drawn down at a permanent discount.

For many physicians, the plan has been to use CCPC assets to bridge income in those years. That can work — but it requires deliberate drawdown sequencing. Because corporation investments are taxed less favourably in retirement than RRSP or Tax-Free Savings Account (TFSA) assets, drawing from the corporation first while letting registered accounts compound is often the more tax-efficient path. The TFSA, where withdrawals are tax-free, is typically the last account touched — preserving flexibility late in retirement.

The risk is running the corporate account lower than anticipated. If a physician retires at 55 and expects 10 years of corporate-funded income before CPP and OAS kick in at 65, the assets held inside the CCPC need to be large enough to cover the gap — and continue to support retirement starting at age 65 when government benefits kick in.

Disability insurance: The coverage most physicians haven’t re-examined

One practical and often overlooked question for physicians experiencing burnout is whether their disability insurance policy covers reduced clinical hours — not just total incapacity. Many standard policies are structured around an inability to work at all. A physician who reduces their hours to part-time as a response to burnout may fall outside the definition of total disability while still losing significant income.

Physicians who have had the same policy since early in their careers should confirm that the own-occupation definition in their contract covers reduced-hour scenarios, and that the benefit period extends to age 65 — or to their revised retirement target, if earlier.