Retirement for physicians in Quebec: complete guide 2026

Incorporated physician vs salaried physician

The vast majority of Quebec physicians (family doctors and specialists) are paid by RAMQ on a fee-for-service or mixed basis and practice through a professional corporation. They are considered self-employed and have no access to any employer pension plan. Their retirement planning relies entirely on personal and corporate savings.

A minority of physicians are salaried employees of a public institution (e.g., some public health physicians, researchers, or administrators). These salaried physicians are covered by RREGOP and benefit from the same formula as other public sector employees: 2% x years of service x SMF5.

The advisor must first clarify the physician's status before any planning. The strategies are fundamentally different depending on whether the physician is incorporated or salaried.

RRSP and contribution room

The incorporated physician who pays themselves a salary generates RRSP contribution room (18% of earned income, maximum $32,490 in 2026). The RRSP remains a pillar of planning because contributions are deductible and returns accumulate tax-sheltered. To maximize RRSP room, the physician must pay a salary of approximately $175,000 in 2026.

TFSA: protection against OAS clawback

The TFSA is an essential vehicle for high-income physicians. Withdrawals are non-taxable and do not count toward the income calculation that triggers OAS clawback. A physician who has maximized their TFSA since 2009 has cumulative room of $102,000 in 2026. At a 6% return, this capital can exceed $200,000 over 15 years.

Corporate investments and the Capital Dividend Account

Funds retained in the medical corporation are taxed at the corporate rate on passive investment income (approximately 50% beyond the $50,000 passive income threshold). The physician must carefully manage corporate investments to minimize the impact of the passive income tax regime.

The Capital Dividend Account (CDC) allows distribution of the non-taxable portion of capital gains realized by the corporation as tax-free dividends. Permanent life insurance held by the corporation also feeds the CDC upon death, enabling a tax-efficient transfer to heirs.

Individual Pension Plan (IPP)

An IPP is a defined benefit pension plan for a single participant, funded by the corporation. For a physician over 50, permitted IPP contributions can significantly exceed RRSP limits. The IPP is particularly advantageous for physicians who have a retirement savings gap and high corporate revenues. IPP assets are creditor-protected.

Administration costs (actuary, annual reports, trust fees) are higher than a simple RRSP — typically $3,000 to $5,000 per year. The advisor must evaluate whether the excess contribution room justifies these additional costs based on the physician's specific situation.

OAS clawback: a real risk

Old Age Security (OAS) is clawed back when net income exceeds the threshold of approximately $93,454 in 2026. OAS is fully eliminated at income of approximately $151,668. For many retired physicians whose income comes from RRIF, corporate dividends, and investments, this threshold is easily exceeded.

Strategies to minimize clawback include: maximizing TFSA (non-taxable withdrawals), splitting eligible pension income with spouse, deferring OAS to age 70 (36% enhancement), planning RRSP/RRIF withdrawals to stay below the threshold, and managing corporate distributions strategically.

Salary vs dividends: retirement impact

The salary vs dividend decision directly impacts retirement planning. Salary generates RRSP room and QPP contributions, but is taxed at personal marginal rates. Dividends don't provide RRSP room or QPP credits, but benefit from the dividend tax credit.

For retirement, an optimal mix is generally recommended: a salary sufficient to maximize RRSP (approximately $175,000 in 2026) and contribute to QPP, with the balance in dividends or retained in the corporation. QPP provides an indexed lifetime annuity of considerable value for a physician without an employer pension plan.

Strategies for the advisor

Clarify the physician's status: incorporated or salaried. For incorporated physicians: establish a 15-to-20-year corporate decumulation plan (ordinary dividends, capital dividends, winding up). Evaluate IPP relevance for catching up on savings. Maximize TFSA every year. Plan CDC management and corporate permanent life insurance. Project retirement income to assess OAS clawback risk. Optimize salary/dividend mix based on age and retirement goals. For salaried physicians: apply the same strategies as for any RREGOP participant.

Frequently asked questions