What Winning Looks Like at 50

I recently had the opportunity to go backpacking with a couple of men near my age. One was a little over 50, and the other a little under 50. Neither are doctors, but both, now at the height of their careers, are currently making “doctor-like money”—one as an airline pilot and one in oil and gas. As it often does in conversations with me, the subject turned to finances.

Both are doing just fine financially. They've both been saving and investing their entire careers. Just a little at first but more as they went along. Now, they're both headed for what is almost surely going to be an early retirement by about their mid-50s. They're both excited about this—with good health, good relationships, and lots of plans to do more fun stuff like backpacking, traveling, and adventuring. They just need a few more years for everything to fall into place financially. Their financial plans are basically on autopilot, and while the exact timing might be a little uncertain, they'll both retire very comfortably in just a few more years.

Winning at 50

Reflecting on their situations after the trip, I thought, “This is what winning looks like at 50.” One of them will qualify for a substantial pension in a couple of more years, and they are both already multimillionaires. They're financially literate, managing their own portfolios, using mostly index funds, and saving financial advisory fees. Both are soon-to-be empty-nesters, and they are thinking about selling their current house and buying one more suitable for their planned retirement.

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Doctors at 50

The situation for doctors at 50 is much more variable. I run into some that are already very well-to-do, with net worths over $5 million and climbing. However, there are plenty on the other side of the bell curve, too. Net worth surveys, such as those done by Medscape every year, reveal that a substantial portion (25%) of doctors aren't even millionaires in their 60s, much less multi-millionaires at 50. In fact, about 12% of 60-something docs don't have a net worth of $500,000—even when home equity is included.

That's not winning. I'm sorry, if you've been earning $200,000-$500,000 a year for the last 20-30 years and you have less than a million of it left, you kind of blew it. That doesn't mean you can't make a few changes and improve your situation, but I wouldn't describe you as “winning the game.”

So, what does winning look like at 50? The original financial plan Katie and I drew up as a PGY2 in 2004 assumed our income would peak and flatline at about $225,000 a year and that we would have $2.7 million in 2004 dollars (which we thought was enough to retire) when I turned 51. The plan was then for me to work part-time after that for as long as I felt like. Thanks to physician incomes rising, a better-than-planned savings rate, and the extra income from the business of WCI, we exceeded that plan and became financially independent when I was about 43.

However, I think that original plan is still a pretty good outline of what winning looks like at 50 for a doctor. By 50, most docs have been out of residency for 15-20 years. If the average doc has been earning $363,000, saving 20% of it ($72,600), and earning 5% real on it, they should have something between $1.5 million-$2.5 million saved up for retirement. They should be rapidly approaching financial independence. Student loans should be gone. The end of the mortgage is probably in sight. There's something saved for college if there are any kids and they're on a short runway toward a comfortable retirement. Maybe they're dealing with a little burnout, and they would like to cut back. Great! They can afford to do so. Or they can grind for 2-5 more years and punch out early. The choice is theirs.

More information here:

You Should Invest Like a 50-Year-Old Woman

What If You're Not Winning at 50

Feeling pretty good about your situation at mid-career? Good, I'm truly happy for you. Not feeling so good? I'm sorry to hear that. The good news is that you're still only at mid-career, and no doctor is ever more than 10 years from retirement. If doctors can come out of residency at 30 and be ready to retire at 40 or 45, why can't a doctor with nothing saved at 50 be ready to retire by 60 or 65? They can. The math works the exact same way. Yes, you'll have to maximize your earnings and cut your spending so you can save well more than 20% of your gross for retirement, but it can certainly be done. You just have to want it bad enough to make the sacrifices necessary to get it. Even if you're 60 with nothing saved, you can still work until 70 and dramatically improve your retirement situation.

I can't quite say “it's never too late,” but you might be surprised at what you can accomplish with just 5-10 years of hard work, aggressive investing, and delaying Social Security.

What does winning at 50 look like to you? How close do you think a doc should be to their desired nest egg by 50? What would you recommend if they're behind?