I’m a firm believer in a gradual, or phased, retirement. We’ve all heard the advice: “Start saving for your retirement now, and hopefully by the time you’re 60 or 65, you’ll have built up enough of a nest egg to quit working.
A Better Balance Does Exist
I have two kids under the age of three. Do I really want to wait until they’re 30 to be able to enjoy spending time with them? The reality is that by then, they’ll have their own lives and possibly, families of their own. That just doesn’t sit well with me.
That’s why I’ve worked to set myself up in a way that allows me to start cutting back now, and begin enjoying a little bit more of life. Life itself is unpredictable; just look online and you’ll see that tragedies are occurring more and more frequently with each passing day. My fellow physicians, life is short. Are we spending it living only for the future, or can we start enjoying it now? Surely a better balance exists.
Now, I don’t necessarily advocate quitting your day job just to enjoy the present. On the contrary; I enjoy being a doctor and I hope I can continue working in some capacity for a very long time.
Here’s a simple chart of what this might look like:
No Regrets and a Plan to Make it Happen
How is this possible? Well, it works if you can exchange some of your current daily income with passive income. As this income grows, you can, in a sense, begin your retirement now. Through my different ventures and depending on the month, a good chunk of my expenses are covered entirely by passive income.
I realize doing this for yourself can be a real test of willpower. It feels quite unnatural, because as physicians, we’re used to working up to the breaking point. We consider idle time wasted, and if we give up a shift or case, we focus only on the money we could have made if we had worked.
We tend to forget what we gain in return: time spent with family, and time to recharge our batteries. You can’t put a price on these things. Seeing the joy on my daughter’s face as we play in the pool – that’s the kind of thing I’ll remember when I’m older, not the shift I gave up last week.
There are many articles out there that examine the top regrets of the dying. Almost universally, people’s biggest regrets are working too hard, and they wish they had spent more time with their loved ones. Not a single person regretted not having more money, a better car, or a bigger house. That’s a powerful lesson, and it’s one that I want to learn and live by.
This idea of “early” retirement is obviously not something you can attempt to do without a plan. Fortunately, I have one, and have been working hard to implement it.
So I’m going to give up my shift this weekend to a hungry colleague, and I’m going to begin my retirement… today.
Has anyone else begun to try this, or perhaps are considering it for yourself? Let me know your experiences; I’d love to hear them!
For the young folks.
Why I won’t be retiring at age 53-55:
1) I did not save any money in my 20’s. Every $1000 dollars I did not put away then is $8000 I do not have now. Even $1000 a year from age 20-30 would now be worth $80,000 now, and $160,000 at age 62. That cost me at least a year.
2) Built a big house with all the attendant expenses. The difference in expenses from starter home to McMansion was $30,000 a year X 15 years. That’s $450,000 plus returns, let’s call it a million. That cost me seven years of freedom.
3) Not saving enough for college for the four kids. The last two years, this cost $60,000 and the next four, it will cost another $60,000. Another year. With two more kids to go, another year.
That’s ten years of “not retired yet” from three mistakes.
I’m on track to cut back to half time in about 3 years (I’ll be about 56) by selling the McMansion and downsizing.
Full retirement is likely at age 60 for me. My father and my father-in-law had a good life to about age 68, then they entered the “decade of decline” and both died at age 79. They both had about 5-10 years of leisure before health issues started destroying quality.
If you are young, keep an eye out for my three mistakes.
Thank you for sharing your advice and story. It is a cautionary tale. I keep striving to achieve that work life balance.
I also saved no money in my 20s. I really do not think residency retirement plans existed when I did my residency. I considered it an achievement that I never ran up credit card debt as a resident like so many of my friends.
Agreed. My net worth upon residency graduation was a very low five figure amount, and that was without student loans (at least the money ones). I bet we didn’t have $20K in retirement at graduation at 31.
I think doctors can be fine without saving in their 20’s. That is the time for investing in your “human capital.” Doctors (fortunately) make such big incomes that a disciplined savings plan in your 30’s can get you rich within a decade. I’m living proof of that. I had a negative net worth at 30 but was quite well off before age 40 and FI well before age 50. Early is great if you can pull it off, but if not I wouldn’t sweat it much.
Couldn’t agree more. I saved a grand whopping $5000 in fellowship and that was about it. Otherwise was trying to limit debt. I didn’t really have my financial awakening until my last year of residency, though.
In the end, I don’t think this is going to hurt me, and feel that I will be well on my way to FI by 45 to 47. I’ve made a plan to get there, though (https://thephysicianphilosopher.com/2017/11/27/the-physician-philosopher-manifesto-a-journey-to-wealth/).
It is all about saving enough through avoiding lifestyle creep early out of training, investing aggressively, and destroying debt those first few years out.
Avoiding lifestyle creep, by living within your means, And paying down on unsecured debt early is always good advice… However, while investing aggressively maybe good advice for some, it is certainly not the right path for everyone as you can easily lose money that way. Maybe that has been a really uncommon during our nine-year-old bull market, but a bear will come eventually.
I didn’t start saving anything worth mentioning for retirement until I was 28. But by downsizing and finding ways to reduce our expenses, even though we now have a child and another on the way, we have now ramped up our savings rate to 50% of my gross income (single earner family). By doing so, we should be comfortably FI by the time I’m 50-55, depending on how the markets (and life) treat us. I consider retiring at age 50 to be at least somewhat early.
I didn’t finish training until I was 38, and my net worth was more than $100,000 in the whole when I finished! My plan is to keep living like a resident for the next few years, which should put me on track to be in a position to retire at 7-10 years post-training. The lack of early savings definitely hurts, but the physician salary certainly helps make up for it if you can avoid the big financial mistakes.
At least somewhat? What’s wrong with you people!? 50 is VERY early. It’s like MMM “retiring” at 31 has reset people’s expectation of what an early retirement is. SS retirement age for generation x is 67. So 50 is 17 years early. That’s almost an entire career in military/government jobs. For a doc finishing training at 35, 50 is a 15 year career! I’m already 11 1/2 years out of residency and I’m just getting started.
Haha, I guess you’re right! It’s certainly true that folks like MMM and Justin at Root of Good have set the early retirement bar pretty high (low actually, in terms of age). But I’ve known several people who retired with military pensions and the like retire at around 55, so 50 isn’t much before that; my nephew working for the USPS has both a DB plan and a DC plan there; retiring at 50 should be very easy for him. My father-in-law passed away at 64, and my grandfather passed away at 72, so that’s set the ‘early retirement’ bar for pretty low for me as well. Further, I don’t put much stock in the SS ‘retirement age’ because that was strongly influenced by the general populace’s life expectancy when SS was created.
Thanks for this post…. work is good but there is always an opportunity cost
Why wont anyone point out that yes saving early or investing early is important
BUT nobody ever mentions that the purchasing power of that dollar is less 30-40 years later
Inflation is rarely mentioned
And for the 20 something year old docs – its like teaching them how to drive whilst looking through a rear view mirror – the market likely wont grow to the multiples it has over the last 50 years for the coming 50 years
I see the truth to your experience, but there were so many market factors that wont be true to young docs or med students.
So they look and laugh at things like the latter effect – cuz lattes will be wicked expensive in the future and investing at a market all time high seems a bit counter-intuitive
JustSayin
WCI and every guest on his site is concerned with inflation and long-term purchasing power. Investing saved funds so that they are very likely, historically speaking, to at least beat inflation is a high priority for most of us. Cash drag is very real. If you want an investment vehicle guaranteed by the U.S. government to beat inflation over time, buy TIPS.
While no one knows what the stock market will do going forward, the 50 year returns of the stock market in the past have been remarkably consistent. Jeremy Siegel demonstrated that stocks have consistently had an inflation-adjusted return of about 6.5-7.0% in the world’s major markets for the last 200 years. They could be lower (or higher) than that going forward for our personal investment horizon (which is often shorter than 50 years), and that’s why most of us save liberally to allow for lower than average returns and still be likely to meet our goals.
Regarding the “all time highs” argument, recall that that the S&P 500 has historically traded with 2% of its all time highs about 26% of the time. Stocks being at record highs has not been a useful predictor of market crashes or even low returns going forward. Stocks often hit record highs because that’s what they tend to do over the long-term.
At any rate, we invest in the midst of uncertainty because it’s often the best (perhaps only?) option available to us. If we could get an absolutely guaranteed 5% real annual return on our investments for the rest of our lives, many would abandon everything else with glee.
Thanks for sharing your experience and perspective YourHuckleberry.
Just a comment and general thought I’ve had from time to time as I learn from this amazing collection of knowledge and experience on WCI:
I don’t know how many WCI readers put themselves through school with loans / military scholarships / public service awards / research grants / etc and didn’t expect or accept mom or dad to pay for their education / training. I love reading things here on WCI and gain so much – I’m concerned that I’m missing the boat though about saving for my children’s college experience… it’s their experience… let them take care of it. Unless I’ve got so much money I don’t know what to do with it (WCI has some good priority lists as to where your money should go) I’d be working on my own FI before taking care of my able bodied and hard working children.
As a child, I don’t know if I would accept much financial help from a parent who wasn’t in a very strong financial position, and even if they were I would be cautious to accept too many financial gifts. My parents put themselves through college and beyond without parental support (financial and otherwise), my four siblings and I have (though food, lodging, and old-paid-for-yet-reliable transportation were provided occasionally and welcomed), and until my financial situation is sufficiently strong (FI or on a very strong trajectory towards that) I don’t plan financing huge school bills for my children. Making your own way is a big part of what helped you get to be strong and successful – subsidizing the next generation’s education can insulate them from the reality of finances and prevent them from developing the financial muscles needed to stay solvent. No tax breaks for 529’s in my state…. finding work for my kids’ (4 y.o. and younger) so they can contribute to Roth IRA’s is quite aways down on my list of financial priorities.
Personal desicion but everyone needs a well thought out plan to get there. I hit FI by age 40 but I had professional aspirations so I still work. However I have leverage because my employer knows I’m not strapped to the job for any debt or even salary. I’m not “controlled” by relying on my employer. Thankfully not even for health insurance.
Great post – I hit FI at age 43 and just started my phased retirement by going half-time. So far it’s glorious, with some challenges that, in the grand scheme of things, I shouldn’t even mention as to not risk sounding like a whiner 🙂
That Guardian article was sobering. My company has had 3 people die in car crashes this year, one guy was 62 and a few months from retirement. That got me thinking real hard. Real hard… I’m a fitness nut and healthy as a horse, but there are no guarantees.
Life is now.
I am a little bit older than you (42), but have been thinking about this all or nothing approach we take to work also. As an intensivist – about 15% of my patients don’t make it. The stimulus for me was that I was noticing more and more people around my age dying (due to my age change). I spend a fair bit of time with their families around that process just listening, sharing, and talking about life. It has been really enlightening about focusing on what matters most and not delaying it for some day in the future that you may never see. Yet another reason that doctors really should listen to their patients.
Completely agree PIMD!
Wealth without wellness simply isn’t worth it. My goal to be FI and be able to retire early at the age of 45 to 47 is built on the fact that my kids will still be around to enjoy and I’ll be able to spend more time with them.
Starting my website and making a medical invention are two of my side hustles that I hope pay off and allow me to live a life well lived.
(Though, I agree I’ll always probably work in some capacity and probably spend more time on my academic research, which can be done to some extent on my own time… Just like my website)
I don’t mind my job now, but have started exactly this, giving up any call shifts possible and taking as much vacation as I can to travel and spend time with family – 2 important values besides personal growth and wellness. Age 49 and ahead of financial goals due to amazing stock market growth.
I wonder what the source of PIMD passive income. His graph looks like my life.
No reason to wonder.
http://passiveincomemd.com/pimd-income-report-july-2017/
Don’t wait until your kids are 30 to do stuff with them. Don’t wait until you can cut back either. Plan your schedule to include them from the beginning. You can do that even working full time. Full time doctors still have a lot of hours they do not work. Use them for your family and fun.
Dr. Cory S. Fawcett
Prescription for Financial Success
I entirely agree. Research has shown that your kids’ personalities are pretty much set by the time they’re five years old. Sadly, many parents, especially docs, are extremely busy during that time and farm out so much care of their children that they miss so many teachable moments and special times that will never happen again in their lifetime.
It’s great to be able to reduce work hours and may prolong a clinical career. When I went back to school for a law degree I had to cut back to part time. I got the degree but found out I actually still liked medicine. Fast forward 7 years and it seems no one will hire family practice docs for part-time work. I’d rather continue medicine if allowed to work part-time-but may well just end up another statistic for Drs. Maslach and Shanafelt. Full time in primary care is just a recipe for burnout, and what is considered full-time now is about 20% more than what was full-time in the mid-90’s when I trained.
I know FP who work part-time. Keep looking. Maybe an urgent care center in your area?
I haven’t given up, but even urgent care in my city is going the full-time only route. Cheaper to have fewer workers due to covering benefits. It may backfire. One needs to practice enough to maintain skills, but too much and work quality suffers-then mistakes happen. I do better work when there’s time to actually think.
Why would they cover benefits for part-timers? It’s usually cheaper to use part-timers for that reason.
Fortunately, my employer offers benefits for me and my colleagues who work part-time. I think PoF is counting on his benefits at this point too.
Yes, full benefits for physicians working at least a 0.5 FTE position in our health system. I’m at 0.6 FTE.
I don’t know if that deal will remain in place indefinitely, but as long as it’s good for the next couple years, I’ll be happy.
Im a family physician. I did some mdlive.com to get some 1099 income to start individual 401k. Would you consider phone or video visits to get some part time work?
Thanks for your input-it’s something I should consider, and I’ve wanted to start an individual 401k but so far haven’t been paid as a contractor. That will hopefully change in 2018.
If you don’t mind my asking, how much does MDLIVE.COM pay an hour?
$30 per visit. Site not always full with patients but if you multistate license it would help. You could easily do 4 visits an hour id think. I know an ed doc who does it on the side and sees more.
Military as a contractor. VA. Locums. Lots of options.
Nice article. Made me realize that’s actually what I’ve been doing for the past couple of years but never actually realized it or thought of it that way. It started as more of a life simplification process that also involved simplifying (cutting back) on work as well.
I love this concept and just can’t get enough of reading about it. It is all but ignored in the “retirement literature” but is a great option for physicians. Many of us love (ok, at least like) what we do. We also invested a ton of money and time getting here. We don’t want to throw it all away as soon as we get some cash stacked up. But on the other hand, we don’t want to grind ourselves into the ground with stressful 50-60 hour workweeks for decades.
Reaching FI has allowed me to cut back a lot. More officially I’m going to a three day a week schedule in January. Part-time or “semi-retirement” is a viable option even well before FI.
There is definitely a cultural pushback. In medicine, we are supposed to be “workaholic superheroes” to quote Dike Drummond. I have had administrators refuse my resignations and I have had colleagues call me “lazy” for cutting back. Be prepared for that wrath and resistance, but it is worth overcoming.
For sure. Read the comments when anything by PoF gets picked up by Doximity. Some real hate out there when other docs see you go part-time or, gasp!, retire completely in your 40s.
The first comment on my recent article there entitled “Regret After Leaving a Medical Career Behind” (http://news.doximity.com/entries/10331394 sign-in required to see comments) was two words.
“Grow up.”
I laughed at the irony of the immaturity of the comment from the seasoned and presumably ornery physician.
Cheers!
-PoF
I definitely had some mixed reactions when I quit OB and started doing part-time Gyn. Some people were curious how I figured out how I had enough. I think others assumed I had a mental breakdown or a substance abuse problem. No role models in my hospital. Most OB/GYNs are still delivering at >60.
I think it is not hate but jealousy as to POF.
I appreciate the post, but I have grown a little weary of so many posts that center around figuring out a way to kick back, relax, stop working, and sit on the beach and drink pina coladas as soon as possible. It’s as if I work one day more than I need to, then I’m a loser. I comment here because I don’t want others to feel like they are a goon if they don’t save like crazy and retire by age 26. I appreciate those that want to transition out of medicine, but I want other young doctors to know there is nothing wrong with enjoying work, taking care of patients, getting a sense of accomplishment out of work, and equally important, setting an example for your kids of hard work. If you think back on the things that you most value/enjoy in your life, they probably had something to do with hard work–I don’t want to turn off that source of happiness or deprive my children of it either by my example. It’s hard to appreciate the fun times if there is no sacrifice in between. Constant, uninterupted “fun” becomes much less enjoyable, appreciated, and valued over time if there is not a little bit of hard work in between to help you appreciate the relaxing times. Growing up, my mom would often quote, “An idle mind is a devil’s workshop”–I don’t want that for me or my kids. No, I am not bitter or jealous of those that are in that position–I’m 42 with $11MM in net assets and only spend about 20-25% of gross, but I don’t feel like I’m in a race to retire as soon as possible. I’m not a crazy workaholic, I work about 35 hours a week. I have young kids, we do lots of fun things (some cheap, some expensive) but I want them to know that life requires work and that appetites in life should have restraint. Work shouldn’t be something that is shunned, despised, avoided, or be ashamed of. The fortunate situation my wife and I are in allows us to donate almost as much as we spend each year, which further increases the satisfaction of work. I see lots of patients in clinic for pretty much free, the only reason I charge them is so they feel the dignity/responsibility of taking care of themselves. I know I am taking the post way beyond the intent, but I don’t think everyone’s goal in life needs to be to figure out how to be rich and lazy as soon as possible. Sure, I’ll die with more than I need, but who cares!? Those that need it much more than I do will benefit from it and, hopefully, my kids and grandkids will be working hard, having fun, helping their families and others long after I am gone because they value work and the benefit it provides them and society.
You’re absolutely right. My goal in life is definitely NOT to retire the most moment I could (if it were I wouldn’t be typing this, much less working shifts).
I think work can play a meaningful part of my life and those of others.
Moderation in all things.
And $11M by 42? There’s got to be an interesting story there that involves far more than a clinical income. Care to share?
Definitely correct in your assessment–clinical work accounts for about $5MM of it, the rest is due to lucky investing and started saving/investing when I was very young.
It’s still a rather impressive sum. Congratulations on your good decisions and luck!
I’m not surprised to see your thoughts about work though. Our net worth isn’t $11M, but it’s probably not that much less and certainly above “enough” if you include the value of WCI, LLC, but I’m not even close to being done working in either of my two careers.
Interestingly, I just heard this morning that a Suntrust study found that only .2% of American households have investable assets of $10 million or more. So that puts you in the top quintile of the top 1%. 🙂
I’m definitely not there yet- most of my net worth is in house and business. Perhaps eventually, but by then the top 0.2% might be $20M!
That’s fine; investing is a one player game.
I actually agree with you. Sounds like you’ve found a great balance and it’s a great story. Maybe it didn’t come across strongly in this post as it does in some others, but I love my day job, I just want to do it less. I could quit and financially we’d be fine. However, the last thing I want to do is sit on a beach and rot day in and day out – on occasion, for sure! I’ve reduced my clinical hours by 20-25% yet still work around 40 hrs. I used to work 3 weekends out of the month, but I’ve cut back on that as well. The funny thing is, as I’ve cut back on that time, I’ve only spent more time & energy on other ventures – some that make money, others that are philanthropic. The difference is that I can often do those things while my kids are in school or sleeping so that when they’re free, I can be present for them. My hope is that I teach my children that a hard work ethic and making a difference is absolutely important, but it’s also important to find a great balance… and ultimately, nothing’s more important than family.
Yet another who has cut back to full-time work. 🙂 What a slacker.
Anyone with young kids at home is not semi-retired or sitting on a beach drinking a Pina colada when they cut back at work. They’re just doing a different kind of (unpaid) work at home. I’ve spent the past year working about 10 hours a week in my clinical job which has allowed me to spend most of my time at home with my kids. I wouldn’t say I was retired and my kids would have to be blind to think I wasn’t working hard. There are many ways to show your children how to work hard besides spending 60 hours at work a week. And there’s a lot to be said for spending time with your kids when young. However, I think people should do what makes them happy and plan their financial lives accordingly. If that’s working to 70, great! If it’s working part time or cutting back in your 30’s or 40’s that works too.
Agreed. I have a toddler and I feel like I need a day off to recover from a weekend off with him. I love him to pieces but he is exhausting
Always some good info and insights. I’ve forwarded this one to my friends and kids. I haven’t done the disciplined approach you have for investing, and extricating myself from full-service is daunting- but I’ve used that mistake to guide my kids. And I’ve worked too much- and still do, but I’m trying real hard to ‘reform’! Not sure how much is ‘enough’, but appreciate all your contributions and guidance.
Always interesting to see the majority of financial blogging physicians are shift workers while the majority of physicians overall are not. It is a luxury to be able to decide to work more/earn more one month and less the next. Don’t take it for granted! The rest of us have patients that expect to be able to book appointments with us.
It’s funny you mention that because I often see patients in the ED who complain to me that their non-shift working doc doesn’t have any available slots because she only works 2-4 days a week!
Don’t let your patients/clients/customers decide how you’re going to run your business and your life. If you want to work part-time, work part-time. If you own the practice and that isn’t a financially viable option, hire employee docs and mid-levels until it is. If you are an employee, remember that you’re the valuable commodity. If they won’t work with you, someone down the street will. You won’t make as much. You might not get benefits. But if you’ve got your financial ducks in a row, it can be done.
I just don’t buy this argument that “I can’t work part-time because I’m a neurologist/surgeon/internist”. Trust me, when the alternative is not having you at all, they’ll figure out a way to have you be part-time.
totally agree. in my specialty, I was told I cant do part time. well I said screw it, if you want me you have to accommodate me otherwise there are other employer willing to hire me. That level of confidence comes when you have financial stability. everything is possible if you believe in it.
I agree.
Doctors have a lot more clout than they realize. I have seen this from the healthcare organization administrative side. Physicians generate direct revenue, downstream revenue, and are expensive to replace. Most doctors could negotiate a great lifestyle if they chose to and practiced even the most rudimentary negotiation skills.
I know a dozen or more doctors from FP to various specialties who work limited hours. My field “requires” full-time, but I’m an exception. You can be an exception too.
Sometimes when the patient says their doc only works 2-4 days per week, what it really means is she’s in the OR or L&D the other days (and thus does not have appointments available)
That’s probably true. But as you note, that’s only “sometimes.” There really are part-time doctors out there in every specialty.
“It is a luxury…don’t take it for granted! ”
The grass is always greener, huh? Sure, shift work allows some flexibility, but it also means 24/7 coverage weekends and holidays, bad weather or good. Someone gets sick or has some other calamity…someone who wasn’t working gets called in to work. And closed for lunch…that sounds so gentlemanly.
Sure, there are pros to shift work, but there are pros to non-shift work schedules as well. 4 day weeks, ‘Gone fishin’ at your discretion, or never working a weekend are great too.
We’re all dealt a different hand, and value different things, begrudging the other guy isn’t a path to fulfillment.
WCI: Please post your blog comparing realty mogul and fundrise. I cant stand lending club anymore, and want to deploy some serious cash ASAP. T
Can you also include information about potential pass through income tax impact. Thanks
I think the post does mention the tax issues, but I wouldn’t consider these tax efficient investments. I’d have to check with my content manager when that post will run, but I don’t think it’s before February. If you need info more rapidly, I’d recommend Ian Appolito’s site. It is excellent.
https://www.therealestatecrowdfundingreview.com/
https://www.therealestatecrowdfundingreview.com/blank
“We tend to forget what we gain in return: time spent with family, and time to recharge our batteries. You can’t put a price on these things.”
Sadly, people put a price on these things all the time. Much of it is undoubtedly unconscious, but when people decide whether they should work one more shift or spend time with their family, they have demonstrated which of the two they value more.
Your point about trading income generating opportunities for time with family/to recharge is a hugely important one for physicians. When I first completed my training, I took on a lot of extra call to make money, and I realized very quickly that it was making me miserable. I have actually started giving up some call, and I now take about 6 weeks of vacation per year, and I am so much happier. And a better physician for it, because I am better rested and more attentive at work.
I enjoy your blog.
The difficulty for self employed physicians is the relatively high fixed overhead for office based practices. Your malpractice doesn’t really go down if you only work half time. Your building rent is the same whether it’s open half or full time. Usually someone will still have to be paid to answer the phone (both for appt scheduling but also for the inevitable insurance and billing questions that inevitably come up and need prompt responses) monday-friday 8-5 whether you work full or half time. If you are employed by a large group or hospital it may be a little different as some of those fixed overhead costs can be shifted to other services or providers.
Those few extra patients you see per week don’t really add much to your overhead but they certainly add to your bottom line. Eventually there are diminishing returns with quality of life etc…
Thanks for the article. good for consideration
Necrotic the trick is to have low over head to be successful working part-time.
My malpractice goes down for half-time.
PIMD, is there a post where you describe the network marketing in more detail?
It’s a typo. It should read ‘huckster’.
I have found cure for Cancer. It is awesome. It saves many lives. Brings me satisfaction. You guys should try it.
Won’t share details though – trust me it works! see these pretty graphs.
The commenters talking about the virtues of FIRE to spend more time with miss need to remember that individuals such as PoF and PIMD likely missed time with kids to achieve that status.
That’s not a knock on them, but it isn’t like they sat back and made $400k/year working 30 hours a week with no nights, holidays, or weekends. PIMD just mentioned he’s been working three weekends a month! He’s reached FIRE and is “cutting back” to 40 hours a week.
WCI has put in a TON of hours to build the empire and reach FI.
All three seem happy with the balance they have achieved, but having read their posts, it doesn’t always seem like they were happy with the balance they had.
You 3 gentleman are free to comment on that — I don’t want to put words in your mouths. But while all 3 of you love your clinical work, the two anesthesiologists of the group seem like you’ve had extremely busy clinical schedules to get where you are.
I’m not near FI, but I have the impression I’ve also had a more balanced scheduled in my 5 years as an attending. I did the math to see what my net worth would be if I added on 3 shifts a month over these past 5 years — I would still be nowhere close to FI. ?.
Academic peds ER doesn’t pay as well as general ER or anesthesia!
Well, it’s Saturday night at 8:46 pm. The kids are taking baths. I’m down in the basement working on a WCI project. It’s been weeks since I took a day completely off from both WCI and medicine. I think that probably answers your question.
I had a busy clinical schedule for quite a while. I was full time until about 16 months ago, and even now I’m 3/4 time. And at one point I spent 5 months away from home in order to get my “loans” paid off within 4 years of graduation.
So yes, I think your point is valid. Very early FI isn’t JUST watching your spending. It also requires quite a bit of work, even after finishing your training.
Unfortunately, I didn’t really have a choice as to the number of weekends or nights I worked per month. It was a part of my allotted shifts and a significant portion of my income. We also didn’t have the manpower to cover it if I reduced my time so I was a bit stuck. Thankfully, we’ve had a few new hires and with the increased income from other places, it’s given me a good amount of flexibility. Wasn’t so happy with the balance, much happier now.
I originally started working a few shifts extra every month which laid down the financial foundation. I then transitioned to no extra shifts and now about to transition to a few shifts short. The original foundation has gotten us very close to FI. My plan isn’t to retire ASAP. As long as I keep enjoying what I do and the BS of medicine isn’t getting to me of course. I notice the less shifts I work the happier I am and the better doctor I become. Eventually the eventual goal is to transition to about 6-8 shifts a month. Ideally 2-3 weeks a month.
I am confused – has PIMD retired from work?
No, but I do think he’s cutting back to full-time.
No, I haven’t. I’ve dropped about 20-25% of my time and I average a little under 40 hours / week. My plan is to drop another 20% next year to end up somewhere around 60% of my original clinical time. Not planning on giving up medicine altogether at this time and I hope I really never have to.
Big proponent of the idea of a phased retirement – if one can pull it off.
I semi-retired from full time position (C-Suite level in NYSE publicly traded company) at 44. Went from working 5+ long days each week (55-60 hours) to working 3 days per week (stayed on with the same company in reduced capacity). Continued this until 53 (that was two years ago) at which time I fully retired.
This exceeded my every expectation. My working days were generally Tues-Thurs, so most weeks I had a four day weekend. This allowed me to not only spend a lot more time with my family (daughters were 14 and 11 when I went part time) , but also was a major stress reducer. The stress reduction part cannot be overestimated. It is a game changer. Lot’s of free time to do things I had previously been unable to do because of my prior work schedule.
Now that I am fully retired, my DW and I are traveling extensively and having life enriching and enhancing experiences. Life is truly good!
My advice would be to only do this when your finances are in a place where you can do this right. To go part time and live like a miser I do not think would be all that enjoyable. Live well within your means while you are working full time and save as much as you can, so you can pull this off while you are still very young with lots of time ahead of you to really enjoy life.
Good luck.
This is reassuring. Thanks for sharing your story MikeG. Cutting back from work can be scary for a lot of us, so it is great to hear examples that worked out well.
WCI,
Let’s just call this what it is – a “change” in jobs, or maybe just a change in the number of working hours. It is not RETIREMENT as your title suggests. Retirement is essentially no active income from working. I say essentially because we all may make a few hundred dollars doing “this or that,” but that is not the same as being employed where we have commitments to go to work even one day a week.
Also, just because someone could retire if they have enough passive income to get by, does not mean they should. For many work is enjoyment and it is almost as if they are retired. For others they just don’t know what to do if they aren’t working and this takes a toll on them emotionally.
I have seen many that “claim” they retired at 30, (Mr. Money Mustache comes to mind), but this is just someone who gave up a 9-5 job to become self-employed.
Nothing wrong with any of those options in life as everyone is different, but let’s not confuse working with retirement, which is “the action or fact of leaving one’s job and ceasing to work.”
# 1 Not my title, not my article, not my circus, not my monkeys.
# 2 http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-vs-the-internet-retirement-police/
Thanks for the laugh. Its always good to start the morning out right!
Seriously though it is your website, so it is your circus!
Fair enough, but that one was written by PIMD, so no harping on me about it.
At any rate, if you read the article you can see he’s taking creative liberties with the word “retirement.” But really, it’s a very squishy word.
https://www.whitecoatinvestor.com/retirement-is-squishy/
Dear WCI, listen to more than one person harping (When did everyone learn how to play a harp though?) For example, in retail, if one person complains, they hear ten thousand people complaining. Click bait followed by gangbusters content – great. These kind of click-baitey titles without really much substance in the post while not even answering the title question honestly, hurts WCI, and WCI’s mission. No need to get defensive- just listen. Your honesty, and courage in being honest, has built this site- and people love you for that.
Thanks for the feedback.
I think those complaining about the title missed the point of the article, which I actually thought was pretty clever– i.e. that making progress toward financial independence will allow you to live your desired life now rather than wait for some distant retirement that you may not even survive to obtain.
I totally agree with that.
Agree the word “retirement” means different things to different people. Many people reach “financial independence” and still “work/maintain active income stream” in some capacity. Most people do so because they rely on the employer benefits, particularly health. We are “retired” military so we don’t even need an employer for that. Totally a game changer to have health insurance covered by the time you reach age 45 vs age 65. many physicians really can’t walk away from their job even though salary isn’t an issue, it’s the health insurance. They can’t afford to absorb self-insurance, paying for chemotherapy etc….So for those they are all talk…..they are strapped to an employer period.
I don’t buy this excuse. But then again I’ve been buying my own health insurance on the open market for a half decade now. There’s also health sharing as an option. Seems silly to say a doc has to keep working for health insurance. It’s more that the doc hasn’t yet met her number to be able to cover all of her expenses (which include health insurance.) I mean, nobody says “I have to keep working for groceries.” It’s always health insurance. Why choose that as the expense that keeps you from being FI?
this is just my experience what I see. Many physicians keeping minimal shifts, employment hours just to keep the benefits they can’t otherwise afford or maybe better concept “take their own responsibility for”. I think Health insurance is the largest excuse because it is one of the biggest expenses/fears, especially for some who themselves or have family members with significant preexisting conditions which make premiums “unbearable” or not “budget friendly”. Folks are afraid to drop everything they have relied on IMO is one problem (they keep their life insurance policy for some unknown reason, etc) or the second problem is they really don’t have enough money to stop working. There is nothing wrong with working when one is FI, but often they hang onto jobs with the benefits attached for that reason is what I see. They “target” 65 because that is when government health care will kick in. The other reason I see is they actually don’t have enough outside of employer accounts to avoid penalties to collect income from…. They just never planned well.
Exactly. They’re just not financially independent yet. But it’s always health insurance that gets blamed. That excuse went away with the ACA since there are no more pre-existing conditions.
The age 59 1/2 rule you allude to is much less of an issue as noted in this post:
https://www.whitecoatinvestor.com/how-to-get-to-your-money-before-age-59-12/
I’m inclined to agree, Jim. Health insurance is just another expense. That being said, I see both sides of this issue. Health insurance is likely to be one of, if not the, largest non-discretionary expense for many in retirement (apart from taxes, which are largely known aside from the current legislation), assuming they have no debt. In addition, the cost of healthcare and insurance has been rising faster than inflation for many years and may continue to do so for years to come. Some may be concerned that if the inflation-adjusted cost of health insurance doubles in the next five years, for instance, that they might be forced to cut their discretionary expenses. Faced with all of this uncertainty (e.g. “What if the stock market tanks for a decade, but health insurance premiums double or triple over the same period?”), plus the general uncertainty associated with early retirement, delaying retirement seems to be the conclusion many reach.
Good discussion. I agree with the premise that Health Insurance is an expense like any other and has to be planned for like other expenses. BTW, different state exchanges have different rates too.
We have been buying Insurance for over 13 years now. It costs money, but not so much that a Physician should have to bend over backwards at a bad job to have Health Insurance.
In my experience, most Physicians never sit down and calculate how much any benefits are worth.
we use an HSA, which requires me to purchase a high deductible plan. If/when health care expenses come up that are not covered pre deductible, I pay them out of pocket. Sound crazy ?
Well, I’m 46, and (Unlike most who read this perhaps ?) Plan on working into my mid sixties. We contribute the $6750 annually to our HSA, using pre tax dollars, then invest the $$ and watch it grow – tax free. Currently I have like $40,000 and change in the account – and I anticipate perhaps having 250-300 k in there when I am ready to start drawing off of it in 20 years. A paltry amount compared to what my IRA balance, so why am I so excited about it ?? Because these withdrawals will be tax free !
What other investment will allow tax deductible contributions, that grow in a tax sheltered account, and tax free disbursements ? none that i know of.
Make sure you keep your receipts. You can actually pull money out tax-free right now and spend it on anything you want as long as you have receipts to cover it.
https://www.whitecoatinvestor.com/the-best-ways-to-use-an-hsa/
Better to invest it if the use is long term.
However I have tons of receipts stored. Have about $20k invested in mine right now. It’s both a long term savings vehicle and an extra emergency fund (using saved receipts to pull money out now if needed).