In short: A physician whose career includes parental leaves and part-time years closes the resulting wealth gap by making the high-earning years count: keeping surplus inside the Medical Professional Corporation at the small business rate, building reserves before each leave so long-term savings are not drawn down, and using an Individual Pension Plan after about age 40 for a faster catch-up than an RRSP alone. ZAI Wealth Management also recommends keeping a T4 salary every year so RRSP room, CPP and child care deductions are preserved.
Why standard plans fall short
Many physicians, and more often women, take parental leave, step back to part-time for caregiving, or change practice types along the way. A plan that assumes 35 uninterrupted years at full billing can leave you short at retirement.
Make your high-earning years count
- Use the corporation: in full-billing years, keep personal draws to what you need and leave the surplus in your MPC at the small business rate.
- Plan the breaks in advance: build a corporate reserve before leave so you don't draw on long-term savings.
- Consider an IPP: for physicians over 40 with steady income, IPP contribution room grows with age and can help you catch up faster than an RRSP alone.
Keep your benefits intact
Some salary each year keeps RRSP room, CPP and child care deductions working, even in lighter years. See our maternity leave guide.
Run your own numbers with our Physician Tax Savings Calculator.
For illustration and general information only. Tax rules change and every situation is different, so speak with your advisor and accountant before acting on anything here.
Common questions
How does an incorporated physician fund maternity or parental leave?
Three ways: optional EI special benefits for the self-employed, which must be registered for at least 12 months before claiming; the provincial medical association's parental leave program, which rarely covers overhead and household costs alone; and a corporate parental reserve built in the years before leave at the 9% to 12% small business rate, then paid out as steady monthly salary or dividends. ZAI Wealth Management builds the reserve into the physician's plan early.
How does a physician plan around part-time years and career breaks?
By making the high-earning years count: leaving surplus inside the Medical Professional Corporation, building reserves before each leave so long-term savings are not drawn down, keeping a T4 salary every year so RRSP room, CPP and child care deductions survive, and using an Individual Pension Plan after about 40 for a faster catch-up than an RRSP alone. ZAI Wealth Management plans the full career rather than assuming a straight 35-year line.