By Dr. James M. Dahle, WCI Founder
A common rule of thumb used by advisors is that you need 70% of your current income after retirement. Unlike most rules of thumb, this one is nearly useless. The number varies a great deal. Some people might actually need 100% or more of their current income. But for most of us doctors, the number is probably much less. Let me explain.
9 Reasons You'll Need Less Money in Retirement Than You Think
#1 Lower Tax Burden
We pay a lot more in taxes than the typical person. My tax burden so far this year (not counting property or sales taxes) is about 25% of my gross income [Note this post was originally written in 2011. These days that figure is about 34%]. That includes federal income tax, state income tax, social security, and Medicare tax. A couple of years ago when I was in the military, but still making a six-figure salary, my tax burden was less than half that. One year it was something like 6%.
Your tax burden is likely to be FAR lower in retirement. You won't be paying Social Security or Medicare tax. You might move to a state without a state income tax, and in many states, some types of retirement income aren't taxed at all, such as capital gains or pensions. Best of all, your federal income tax is likely to be dramatically lower. You're probably in the 24% or 32% bracket now. In retirement, you may not get out of the 12% bracket.
If spending from a taxable account, you'll only have to pay capital gains and/or dividend rates (15% for most of us in retirement, but possibly 0%), and even that you only have to pay on earnings. If spending from a Roth account, no taxes will be owed at all. Even if spending from a 401K or traditional IRA, you still don't pay taxes on the first $24,800 you withdraw (married filing jointly in 2020), and the next $19,750 is taxed at 10%. You get to withdraw another $60,500 at the 12% rate. So your first $105,050 is only taxed at 8.8%. Imagine pulling $100K from your IRA, $50K from your Roth IRA, and $50K from your taxable account (with a basis of $25K). In 2020, your effective tax rate on that would be just 6.5% on a spendable income of $200,000.
#2 No More Saving for Retirement
You don't have to save for retirement when you are retired. If you're putting away 20% of your income as I've recommended during your career, well, that's 20% you no longer need to generate in retirement.
#3 You Can Dump Your Disability and Life Insurance
Once you have enough money to retire, you get to ditch the life insurance and disability insurance. For many doctors, this is as much as 5-6% of their income.
#4 Paid Off Mortgage
You're likely to have paid off your mortgage before retirement. That's probably ~15%–20% of your current income.
#5 Less Spending on Your Children
Once you retire you should no longer be feeding, clothing, entertaining, and housing the kids. We spend far more on clothing for our children than we do for ourselves, and the amount they cost us seems to go up each year. Even if you're planning to help with college, that expense will probably be past or nearly past by the time you retire. Many people even choose to downsize their house. Who needs four bedrooms with only two people? This not only may provide a windfall to the nest egg, but saves on maintenance, insurance, utilities and tax costs for the house.
#6 Lower Health Care Expenses
Health care isn't as much a concern for us as it is for most Americans. We don't need as much because we are a little smarter (I hope) about when we seek care. We get a fair amount of care for free or a discounted rate, as we can either do it ourselves or we receive professional courtesy. Most importantly, most of us have been paying for our health care for decades already as we're usually owners of our practice or partners in our group. A typical American employee has a big shift at retirement. The company has been paying the health insurance premiums, and now they're not. Even as early retirees, we don't have that same issue. Of course, at age 65 Medicare kicks in and helps out with this one as well.
#7 Social Security
Social security isn't going anywhere. It will be modified in one or more ways, but the program is still going to exist. It is too popular not to. As high earners, we'll qualify for significant social security benefits, and our spouses will qualify for 50% of our benefit. If I were retiring today this would be a benefit close to $36,000 a year. That's not insignificant. Even with a lot of other retirement income, only 85% of that benefit is taxable, providing another tax break. Yes, you may not get this until age 70 or so, so early retirees need to have a little extra saved for the first few years, but even so, this is a huge benefit even for high earners.
#8 Less Job-Related Expenses
Job-related expenses are going to go down. You'll spend less money commuting, and might even be able to cut back from 2 (or 3, or 4) cars to 1. Not all of us wear pajamas to work, so you might save some on professional attire. You're likely paying your own CME expenses, at least indirectly, and that expense should be gone.
#9 Less in Tithes and Charitable Giving
Many docs give a significant amount of money to charity as a percentage of their income, a tithe if you will. A tithe on half the income is only half as much money.
How Much Money Will You Need In Retirement?
Yes, some costs are probably going to go up. With more time you'll probably travel more. Like most Americans, you'll spend more on health care than you do now. You might even still be providing some support for children. But overall, there is likely to be a huge reduction in your required income once you retire. Let's look at the math.
Take your current income, let's say $200,000.
Subtract out 20% for taxes and 20% for retirement and you're down to $120,000.
Subtract out 5% for insurance, 5% for child-related costs, and 15% for your mortgage. You're now down to $70,000.
Subtract out another 1% for job-related expenses, 2% for reduced charitable contributions, and 1% for reduced housing expenses. You're down to $62,000.
Add back in say 10% for increased travel costs and 5% for increased health care costs. This moves us up to $92,000.
Subtract out $36,000 for social security and that leaves us at $56,000, or 28% of our current income.
Finally some good news in personal finance. Your expenses are not just likely to go down in retirement, they are likely to go down DRAMATICALLY. Even if I'm off by 50%, you're still not going to need 70% of your income replaced.
How big does the physician in the example need her nest egg to be before retirement? Using the 4% rule, $56,000 per year, adjusted for inflation, can be provided by a nest egg of $1.4 Million. How long will it take for her to reach that goal if she saves 20% of her $200K income a year and gets a return of 5% real on it? Around 21 years.
Now, it's important that you run the numbers for yourself, using your expenses and your desired retirement lifestyle. But I think if you do you'll be pleasantly surprised. Save money consistently, invest it wisely, and a comfortable retirement is well within reach.
Do you agree? What percent of current income are you planning to spend in retirement? Comment below!
this may be one of your best ones yet. we dont always agree either here or on bogleheads but this one is dead on.
This is kind of ridiculous! Most doctors bring in 150,000 at least after tax and you think they can live the same lifestyle on less than 5k/month? I’m not a genius but this is a pretty minimalist look. Very simple example, I don’t know a single doctor who gives money to his church that is going to stop giving money to his church in retirement. Or stop giving gifts to their kids… Or stop giving gifts to their grand kids…..Factor in the fact that most people will down size or move to a different home in retirement. As grandparents… did you kids ever disappear from your budget…. guarantee that answer from most is no. Retiring on 40% of your past income sounds like a major life style change to me.
Run the numbers for yourself. I bet you’ll be surprised how much lower the same lifestyle is in retirement. Just drop what you’re paying in taxes now, your retirement savings, and your mortgage. The better a saver and the higher an earner (and taxpayer) you are during your career, the more it drops.
This was a great article and reassuring to those of us in the accumulation phase of our careers.
That was uncanny. I was just trying to figure out what percent I would need and thought the 70% was way to high given my income and then I read this….. I think I am going to shoot for a projection of 40-50%.
I think you are significantly underestimating taxes. On a $200,000 income, one will pay closer to 30% of his total income in taxes if you include federal, state, fica
It depends Jack, it depends. I know of a way to not pay any taxes at all on a $200K income. Check out this link:
http://www.bogleheads.org/forum/viewtopic.php?t=79510
What I can tell you is that for the last two years I have had a gross income exceeding that figure and have paid 8% and 9% of my gross income in federal income taxes, so I think a 30% figure is way too high. But if you were single, took the standard deduction, were an independent contractor, lived in a high tax state, and didn’t save anything in retirement accounts, then yea, I can see how you could get close to 30% on a $200K gross income.
Your calculations are pre-tax, so you will be collecting after social security $92,000 minus any taxes.
How do you estimate the taxes that you will need to pay on the $92,000 to arrive at your expected net income during retirement? I know that social security only taxes progressively up to 85% of social security. Is there an online retirement tax estimator tool that you can recommend which incorporates income from all sources?
You had commented before that you will be FI around age 53. If you choose ER around then, how do you calculate the bridge between ER at 53 and collecting SS at age 70? SWR applies to a 30 year window, so the nest egg would need that $1.4M plus an additional sum corresponding to that bridge. Do you use the same $92,000 need requirements during those years, or are there other nuances in the calculation of income needs during those years before SS?
You definitely need a plan with early retirement for both health care and income. Since I’m already buying my own health care on the open market, I don’t see that as a big deal. It’s no different from when I was working. There are several approaches you could take with regards to the income. First, you could just ignore social security, reasoning that if you need SS for a successful retirement plan perhaps you shouldn’t be retiring early. Second, you could save up a lump sum in addition to what you would need to retire with SS after age 62-70, and plan to live on that until you start taking social security. Third, you could use a lower withdrawal rate, such as 3%, since you’re probably going to need income for more than 30 years. Fourth, you could plan to use a higher percentage, say 4.5% until you start Social security then drop to 3.5% once you get it.
My personal calculations are all back of the envelope right now, so I don’t need to get that exact. But if I was 52 and thinking about early retirement, I’d be much more exacting about my income and expenses.
I once thought $3.0mm and all debts paid was enough. Now we are at more than $6.0mm with all debt paid and I still don’t think it is enough. I know the answers, I’m probably needlessly concerned but still I am concerned.
I take care of two family members and the farm. I don’t want to not be able to do that.
I’m terrified of retirement. The uncertainty of what faces us over the next 30 years is just immense. The last 35 or so years has been full of ups and downs but fundamentally the conditions of our economy remained relatively stable. Health insurance has been pretty stable though going up, taxes went down for most of the period but are now going up, inflation has had some bad periods, we’ve had a huge recession that we are still in with no signs of letup and then there is the AHCA The biggest factor though is the dim outlook for our economy. Every scenario of retiring into a down economy turns out bad. Time value of money kills you since those first gains after the income ends are most critical. Doctors have the significant advantage of always being needed and employable somewhere even if it is just supplemental income.
Great blog by the way. I’ve had some of the same bad financial adviser experiences.
You really think $6M isn’t going to be enough for you to live on in retirement with no debt? Even if the 4% rule is too aggressive, and 3% turns out to be the right number, $6M should provide an annual income, indexed to inflation, of $180K per year (plus SS). With no debt, that shouldn’t be too hard to live on I wouldn’t think. But look at your expenses. If you’re spending more than that each year and plan to keep doing so in retirement, then yes, you need more to retire in your preferred style.
This is kind of ridiculous! Most doctors bring in 150,000 at least after tax and you think they can live the same lifestyle on less than 5k/month? I’m not a genius but this is a pretty minimalist look. Very simple example, I don’t know a single doctor who gives money to his church that is going to stop giving money to his church in retirement. Or stop giving gifts to their kids… Or stop giving gifts to their grand kids…..Factor in the fact that most people will down size or move to a different home in retirement. As grandparents… did you kids ever disappear from your budget…. guarantee that answer from most is no. Retiring on 40% of your past income sounds like a major life style change to me.
180,000 is a called success. This guy is probably right and he probably doesn’t want to give up the life style he is living. He sounds like someone who has done a good job but still worries about things like a Long Term Care expense or something to that effect. He may also want to leave a legacy rather than plan to die worth $0. Had he saved 20% of his income, like you said he should…. starting at 35 at 300k of income and never saving any more of his raises… he should be worth 6 million exactly at 65. assuming:
Monthly savings: 5k
IRR: 7%
Periods: 360
Future Value: 6.099 million
interesting how this contradicts everything you have said and thats giving him all of his future raises from after 35 to blow on what ever he wants.
Make yourself a little spreadsheet with your pre-retirement spending on one side and your post-retirement spending on the other. I’ll be surprised if your percentage is over 50% of your peak salary. I know mine won’t be even close, even including taxes, charity, and gifts to the kids.
I think it is going to be confiscated from us. I think the government is going to decide it is too much and take from us what they don’t think we need.
I am not so sanguine about believing we are going to recover in the next 10 years. When QE ends we face a crash worse than the one we just had. You can’t even attempt to time the market for that. It only works if you are just dumb lucky. Time is only on the side of those who have it.
There are only props under this economy and no hard footing. Look here, these are the facts. We are on crumbling ground. http://www.zerohedge.com/news/2013-07-25/about-us-recession
Yes, I can live on that but I’m anxious about it holding out and the unknown. I’d feel a lot better with 8 to 10 but then I’m sure that would only result in another level.
Uncertainty is why our economy is stalled. I spoke with my banker the other day about “things”. He said people who can borrow won’t because they are uncertain about business conditions. People that need and want to borrow can’t pay it back and so are denied. Loaning money to be employed gainfully is what makes the economy go. It is what gives us a return on our investments. That and manufacturing to add value.
Corp profits should be good. They have done the same with less and less but that is not growth.
We can pull in our horns and do OK but enjoying the place and doing for others is what I’ve worked all these years for. Guess I should have learned earlier how important it is to enjoy the trip as much or more than the destination. Too old soon. too late smart.
I don’t think the issue you’re dealing with is primarily financial. Even if the country goes to heck in a handbasket you’re going to be way better off than 99.5% of the other folks. I doubt another couple of million is going to make much difference in how you feel about “things.”
Woah, life + disability insurance really accounts for 6% of income for many? My number is 0.32% … so twenty times cheaper than that projection.
If you’re paying 5% of 60% of your salary for disability, and a couple thousand a year for life insurance, it could get to 6% I suppose. I definitely pay less than that too. I’m probably in the 2% range now, but I’m also not insuring anywhere near all my income and have a net worth almost equal to my term insurance.
most disability insurance costs anywhere from .5-1.5% of an individuals income. 1.5% is only assuming they have 0 coverage at work.
I think we’re comparing apples to oranges. I’m using percentages of protected income with an individual disability policy. So if your policy pays $10K a month, expect to pay $200-600 a month for that individual, specialty-specific policy.
You are probably correct. It is all relative isn’t it?
Yes it is. Sometimes hanging out with relatively well-to-do people (even on a place like the Bogleheads board where about half the posters are millionaires) can cause us to lose a bit of perspective.
Still, there is a fundamental change in our nation. Factors of growth for the last 150 years have shifted. Maybe only for a time but they have shifted. We are like an Exxon. It is hard to move the growth needle of Exxon 3, 4, 5% a year over inflation. Something really big has to come along. For us it was the industrial revolution, the debt fueled consumerism and whatever productivity that the computer revolution brought to us. Growth of the market at large is approximately GDP + Inflation + Dividend yield. Most soothsayers have a very hard time thinking even 7% is possible for the future.
We shall see. I’d like to say it will be interesting.
I think this post is very interesting; and basically runs counter to the oodles of financial advisor websites, posts and marketing information. It would be great to find some links to other posts like this, basically on the idea that high income does not necessarily equal high spending; and it’s what you spend that determines your lifestyle.
With the help from this site, I tried to calculating this in the following way:
(salaried academic specialist, very satisfied with my current standard of living, nearly 40 with two children)
{[After tax income] – [big 15 year mortgage, 529, life insurance, kids activities]} + 15% for health care and more travel = after tax, today dollars needed in retirement.
This roughly came to be 53% of my take home pay; and 40% of my gross pay.
I used my after tax income, because I never ‘see’ my pretax income, so our lifestyle is only consistent with the after tax income (as my wife astutely pointed out to me). I guess this also points out that we carry no debt besides the mortgage, and no retirement savings that come from the take-home pay.
Comments on this approach? With help from this site, I am trying to be more financially astute (did I say I’m a salaried academic? 🙂 )
It’s a great approach and you can see that 70-80% as most advisors recommend just isn’t a rule of thumb that applies to most docs.
I am looking at your numbers again and wanted to be sure I didn’t find an error in the calculation…. perhaps the misunderstanding is mine as to how you arrived at “taxes” in your calculation.
Since you subtracted out all your taxes (20%), isn’t your requirement of $92/year (or $62K/year after social security) an after-tax retirement cash flow requirement? If so, wouldn’t the SWR you calculated based on this number be misleading because SWR apply to the permitted inflation-adjusted withdrawal amount, not the net after-tax income requirement which would be less.
Thanks, this is my favorite post from your blog, so I want to make sure I got it right!
I didn’t subtract out all my taxes. I plan to pay less in taxes in retirement than while I’m working.
That makes sense… otherwise we would need to adjust the SWR for taxes (Kitces recently wrote about that), but you are talking about gross income needs, not after tax needs.
How did you arrive at the 20% (40K) less in taxes estimate? A sample calculation would be really helpful. This post was especially valuable because we can use similar methodology for back of the envelope calculations.
Take your expected gross income, subtract out the standard deduction and a couple of exemptions, and calculate the tax on it. It doesn’t have to be exact, a ballpark figure will do.
Via email:
OK, so using
http://www.calcxml.com/calculators/federal-income-tax-calculator and
inputting a gross income of $200,000, married filing jointly, a
standard deduction, two exemptions, and three dependents, a qualified
contribution of $16,500, I get a tax liability of $33,246 (effective
tax rate is 16.6%).
On the other hand, for retirement taxes in your scenario above we have
85% of social security taxed = (0.85)*($36,000) = $30,600. Let’s
assume no more than half of the retirement funds are Roth (most people
have less), so of the $56,000 saved $28,000 is Roth, and $28,000 is a
traditional 401K. So taxable income during distribution is the $28,000
from the traditional plus $30,600 of the social security income =
$58,600. Using your tax tables published at
https://www.whitecoatinvestor.com/should-you-make-roth-or-traditional-401k-contributions/
the tax at retirement from this $58,600 would be (0.10)*($17,850) +
(0.15)*($20,750) = $4,897.5.
So subtracting $37,866 taxes before retirement – $4,897.5 taxes during
retirement we get $28,348.5 in savings = $28,348.5/$200,000 or 14.2%
less in taxes (as a proportion of the gross income) during retirement
which is significantly less than the estimated 20% savings in taxes.
If you are taking advantage of other pre-tax benefits such as HSAs,
then the difference between the two estimates would be magnified
further.
Am I missing a significant factor in the calculations? There seems to
be a significant gap compared to your estimate of tax savings.
When using this method, you should estimate your own taxes pre-retirement and post retirement and use those figures.
You also don’t seem to be counting payroll taxes in your estimate. You don’t have to pay those in retirement. The 20% figure thrown out was a simple estimate, not a calculation. I suppose I could do a simple calculation, but it wouldn’t be accurate for you or for me.
Let’s assume an independent contractor making $200K, standard deduction, 5 dependents, $40K going into a 401K. His payroll taxes will be 12.4% of $108K or so and 2.9% of $200K for a total of $19192. His federal taxes will be calculated on a taxable income of $200K-$40K-$12,200-3900*5= $88,300. He’ll also get a small deduction for the payroll taxes. At any rate, federal taxes on $128,300 are $23932. So total taxes are $43,124.
In retirement, he’s got an income of $36,000 from social security, $25,000 from a Roth IRA, and 31,000 from an old 401K. He gets the standard deduction and two exemptions. So taxable income is $36,000*.85+31,000-12,200-3900*2 for a total of taxable income of $41,600. Tax on that is 0.1*17850+0.15*(41600-17850)= $5,348. So he’s gone from paying 21.5% of his previous gross income in taxes to paying 2.5% of his previous gross income in taxes. That’s pretty close to the ballpark figure thrown out up above.
The point is you pay a lot less in taxes in retirement, so you don’t need to have as much income to have the same lifestyle.
That was a great analysis and demonstrates how big a difference your personal situation makes in determining tax savings in retirement. In the case you provided, the retiree only had an anticipated 2.5% tax rate in retirement.
Contrast that with a retiree, that, for whatever reason has 80% of his savings in a taxable account and with a cost basis at half the average balance during distribution, if I am not mistaken, his federal tax rate would be: (0.8)*(0.15 long term capital gains rate) = 12% not including any state taxes. After adding state capital gains rate taxes, this might be up to another 5*(0.8) – 10*(0.8)%. This would be 16%-20% overall tax rate in retirement, prior to including any additional taxes for the remaining 20% of the portfolio that is not in a taxable account.
The figures above would of course be worse for those rare individuals in the highest income bracket in retirement, which could have a combined federal and state tax rate of 23.8%-33% for the 80% of their portfolio that is in a taxable account (i.e., 19%-26% before including taxes from the remaining 20% of the portfolio that is not taxable. For State and State+Federal rates in highest bracket see: http://taxfoundation.org/article/high-burden-state-and-federal-capital-gains-taxes
Yes, you definitely need to run your own numbers. But I think most doctors, especially big savers, will be pleasantly surprised by the answer.
I should just add that the second analysis (paragraph) in my post above may overestimate retiree taxation by 3.8% since in States without taxes since at http://taxfoundation.org/article/high-burden-state-and-federal-capital-gains-taxes they list the combined capital gains tax rate as 23.8% while the highest long-term capital gains rate I am aware of is 20%.
For high earners, the capital gains rate is 23.8%, not counting state taxes.
Thank you White Coat,
I think I found an error in my calculations. In my “contrast that with a retiree, that, for whatever reason has 80% of his savings in a taxable account” scenario, the tax rate coming from the federal long-term capital gains tax should on average only be 6% rather than 12% because only half of the portfolio at that point would be above the cost basis. This of course doesn’t include any State taxes, nor taxation from the 20% of the portfolio that is tax advantaged (401Ks, Roths, etc.).
Great article and insightful discussion.
Question regarding retirement expenses assumptions – do you account for some level of inflation over time in projecting your anticipated retirement expenses? ie food will cost more in 20 years, utilities etc?
Yes, of course you would need to do that. But remember that safe withdrawal rate percentages usually come with an inflation adjustment component. So if 4% covers your expenses on the eve of retirement, 4% adjusted to inflation should cover them later.
In my opinion, if you are any type of physician, and your lifestyle cannot handle inflation of basic necessities, such as food, water and shelter; you’re not saving enough. When I ran the White Coat Investor’s analysis above for our personal situation; we used the ‘today dollars’ and are understanding that we will have to eat out less or travel less should our investments and inflation not match as well as we would like.
Also, I think the effect of the inflation piece for high earners is yet more marketing by financial advisors and money managers about how much uncertainty there is in planning for retirement and that you should pay them to do it!
Just another fine point about estimating the amount for retirement savings: remember that many employed physicians will be meeting some of their 20-25% savings rate with 401K matching and/or profit sharing. If I contribute 10% and my employer matches 5% and I get a 5% profit share, I’m achieving a savings rate of 20% of my gross income, but you should obviously only reduce your estimated retirement spending by 10% in that situation.
And also, your mortgage payment doesn’t rise with inflation like your income should (hopefully). So while your mortgage payment might be 15-20% of your income when you’re 35, after 20-30 years of inflation, it’s likely to comprise a drastically smaller percentage of your gross income.
Another good point, and the reason why everyone needs to run these numbers for themselves. You have to be careful not to increase lifestyle as your mandatory spending disappears, lest you have to work longer to support that lifestyle in retirement.
Good point, unless you’re wisely counting that money as part of your salary, as you should.
Dear WCI, thanks for sharing your info to all of us.
I have 2 questions:
1) you say save 20% for retirement. so do you mean from your gross salary (pretax)? or post-tax? for instance if your salary is 200K gross annually, we are talking about 40K annually? or this calculations come with your salary after taxes?
2) lets assume you are in the process of saving 40K a year. do you simple add your pretax money saved (such us 17.5K in 401) + post tax money (such us 5.5K roth IRA) = 23K? or in this case you would assume 17.5K of 401 pre tax and then you figure out the pre-tax equivalent of 5.5K (roughly 7.1K in the 30% bracket), for an equal of 24.6K of pretax “equivalent” money in this case?
thanks,
1) Pre-tax. But remember the 20% is a rule of thumb. It might be 15% for you. It might also be 25%. It just depends on your goals. But it isn’t 5-10%. That’s not enough.
2) No. I don’t sweat the details that much. Truthfully, I’ve usually saved much more than 20% most years. I don’t calculate an exact 20%. I suggest you figure out how much you think you’ll need and how long you want to save it and about how much you expect that money to earn on average and figure out what your percentage is? If you don’t want to do that, well, 20% of gross is probably adequate, whether you tax-adjust your retirement account contributions or not.
This post is brilliant, and a HUGE relief. I just ran my own numbers, using the same categories as you. In retirement I will need at MAX only 55% of my current gross income, and that’s probably being overly cautious.
Just shows you how overly aggressive the financial planners are with their
“70-80%” income replacement estimates. They are suckering us into saving more than we really need, so that they end up with more assets under management = more income for them.
Super grateful for this article.
This analysis can be used for many people. A lot of people in the 70-120K income range actually live (after taxes, mortgage, savings, student loan payments, tuition etc,) on 40 – 70K.
Here you have used what I call a top down approach. I suggested this to a friend that was a regular saver and he was dubious. He was also very detail oriented and kept meticulous detail on his spending habits. When he did a bottom up calc it came out almost identical – he was living on less than 40% of his income.
I agree that retirement spending will be much less than what financial websites tell you (assuming no mortgage, debt, child’s tuition etc).
However, will property tax be a huge chunk of yearly expenses not mentioned?
Be sure to add it to your list when you run your numbers. Mine is $306 a month, about 1/10th of a mortgage, so it has a relatively minor effect in my case.
If your anticipated income in retirement is in the $60K/year realm, why would one contribute to a Roth in residency or in the Backdoor Roth years? When income is about that or slightly higher?
Roth beats taxable, so a Backdoor Roth IRA still makes sense but when you’re choosing tax-deferred vs Roth, you’re right that a doctor who will have an income of $60K in retirement is going to do want to do tax-deferred.
Your healthcare costs are not that low as one might expect in retirement
Between my Part B/Drug/Deductible plus Supplemental its probably 1200-1300/month
Be leary about medicare advantage