By Dr. Bryan Jepson, Guest Writer
In February 2022, I was sitting on a beach in Hawaii during a hard-earned vacation with my wife. Now, that might be a common way to start a story for many of you, but for me, a vacation with my wife is actually a rare event due to my family dynamic with adult children with special needs (that may be a post for another day).
As an emergency physician entering my twilight years (I’m in my mid-50s), all the stress from the busy shifts with overwhelming patient volumes, the fluctuating sleep schedules, and the evenings and holidays away was definitely weighing heavy on my mind and body. I had just survived the worst of the COVID pandemic, although I felt like I had left a piece of me with it.
How much longer can I do this job? I had been asking myself that for years, but now I felt like I needed to make a choice: either retire early or find something else to do. I just couldn’t face many more years in full-time clinical practice. But I also didn’t feel like I was mentally ready to hang it all up and just go fishing. One piece of advice that I had heard repeatedly from early retirees was to be sure that you retire into something: know how you are going to spend your time, or you might find yourself unhappy and with nothing meaningful to fill the hours. Doctors are generally self-driven, highly motivated folks, and I am no exception. I felt like I still needed to contribute to something.
Long story short, I decided I would pursue a passion that I have developed over the years of investing and personal finance. I went back to school at my ripe old age (I am now finishing up a master's degree in finance and the education requirement for the CFP designation) and completed the necessary licensing requirements to become a financial advisor, and I have joined an independent financial advisory group called Targeted Wealth Solutions (that I found through WCI). That is how I came to write this post.
I have learned a lot over the decades of real-world experience and the last year and a half of formal financial education. One of those things is how risky it is to retire—especially to retire early. Let’s talk about why.
Losing Your Salary
Medicine is a challenging but rewarding career. Most of us who went into it were excited by that challenge and by the opportunity to help others along the way. We were also thankful that it came with a reasonably safe expectation of high compensation in return for the many years of schooling, the accrued student debt, and the stressful lifestyle that accompanies that career. Our healthy paychecks certainly cushion much of the stress caused by life’s unexpected setbacks, such as the rising cost of living, health setbacks, home repairs, car repairs, education expenses for our kids, etc. For high income earners, these expenses are more like a bump in the road rather than the unsurpassable roadblock that others may face.
But once you retire, those regular paychecks aren’t going to be there anymore. You must now survive on the income that you generate from the assets that you have accumulated rather than the work that someone pays you to do. That can be scary. Really scary! I have always been pretty conservative with my spending, and I don’t live an extravagant lifestyle. My paycheck has made it easy for me to not lose sleep over finances. But maybe in retirement, that would be different. I haven’t worked for all these years to stress about money in my golden years. For me, I had to decide if I was ready to trade in the security of a steady stream of income that I could adjust as needed by simply working more shifts for a fixed retirement income where I had to be careful about not spending things down too quickly. That is why they say that a career in medicine comes with golden handcuffs. No matter how tired you are of the downsides of the job, it is hard to give it all up.
More information here:
Are Physicians Who Retire Early Abusing the System That Made Them Rich?
Your Investments Are Your Lifeline in Retirement
Although there are exceptions, most doctors don’t get pensions and must turn the wealth that they have accumulated into income that will last the rest of their lives. If you were judicious with your earnings and you saved consistently, hopefully you will have a decent-sized nest egg when you finally decide it’s time to be done. But then, the accumulation phase is over, and the distribution phase begins.
There are a lot of questions to consider when making this transition. Did you save enough to last the rest of your life? How will you know? How much will you need to maintain the lifestyle you desire? What is the lifestyle you desire? How should you alter your investment approach during retirement so that you don’t spend down your savings too quickly? Will you have the flexibility in your spending habits to accommodate downturns in the market or other unforeseen expenses? These factors can drastically affect your chance of a successful financial outcome, which I would define as living how you want during retirement and then dying with some money in the bank that you can leave to your beneficiaries or charities of choice.
Before I became a financial planner myself, I had only rudimentary answers to these questions. Using the 4% rule and my current monthly budget, I made rough projections of my retirement needs. Now, I have much more sophisticated tools in my belt to answer these questions with more confidence.
The Risk of Bad Market Timing in Retirement
One of the biggest risks to your retirement nest egg is completely out of your control. You might simply be unlucky enough to want to retire at the wrong time in the market cycle. You could have invested exactly the same way as your best friend and got the same average return, but he retired when the markets were booming and your chosen retirement date happened to fall in a bear market. It is the decade surrounding this transition that is the riskiest to the size and longevity of your portfolio. This is referred to as retirement date risk.
History has shown that investing your money in the stock market generates the highest average return over the long term. But the laws of investing say that the highest returns come with higher risk. Risk can be defined by the degree of volatility—fluctuations from the average price. Stocks are much more volatile than investments with lower expected returns, such as bonds. Although you may enjoy an average return of around 10% if invested in the stock market, there are wide fluctuations from year to year; and some years, you can expect to lose money on your investments.
Hopefully by the time you approach retirement, if you have been investing regularly over all those years, you will have seen your portfolio value grow exponentially due to compounding interest. So, a 10% decline in the stock market (which is not that uncommon) can take a sizable chunk out of your portfolio (in dollars) if it happens close to retirement. Suddenly your account value is no longer what it was just a few months before. It might take years for it to recover, which means that you now will have to retire with less cash or you will have to push back your retirement date.
Conversely, if the market crash happens in the first few years immediately after you retire, your loss is compounded. Your assets depreciate, and you are forced to withdraw from them at exactly the wrong time to provide the income that you need to live on. In other words, you are forced to sell low on your investments. If you compare two scenarios where the total yearly returns of the market are identical over a 10-year period but come in reverse order, you can see how the timing of the negative returns is so important.
In my case, after years of a strong bull market, I was feeling pretty confident with my nest egg, and my target number was just on the horizon. Then, November 2021 happened, and the market crashed. I was invested in a stock-heavy, tech-centric portfolio that had done very well during the bull-market decade leading up to the crash. But those are the types of stocks that took the biggest hit during this down cycle. The NASDAQ, the closest index to my portfolio, gave back about one-third of its value in just a couple of months. Suddenly, my target number looked a long way away. Had that same drop happened five or 10 years ago, followed by a strong bull run, time would have made up for that loss, and I would have still been sitting pretty and feeling ready to make my beach vacation a habit.
This is a painfully personal example of the sequence of return risk. The only way to control for it is to decrease the volatility of your portfolio as you approach retirement and in the early years after you retire. That way, the impact of bad timing will at least be mitigated since the negative swing should be less extreme.
More information here:
Is Now a Good Time to Retire? Here’s What Christine Benz Thinks
Some Sobering (and Scary) Statistics on People’s Retirement Preparedness
Rising Inflation, Now?
The reason that we invest our money is so that it will grow in value over time. Yet, $100 dollars in 10 years will not buy nearly as much as $100 will buy today. That is because inflation, which averages around 2%-3% per year, is constantly eating away at the purchasing power of the dollar. This is referred to as inflation risk, and it means that, at the very least, your investment returns must beat the cumulative rate of inflation for your assets to grow in real (inflation-adjusted) dollars. We haven’t had to think too much about inflation in the last few decades, because it hasn’t been much of a problem since the early 1980s. But in the last two years, inflation has skyrocketed, reaching a high of 9% in June 2022. Like with bad market timing, if you happen to be unlucky enough to retire during a period of prolonged high inflation, the real value of your assets can take a major hit.
The Risk of Being Too Healthy
The vision that I think most of us have for retirement is travel, leisure, spending time with family, and exploring new hobbies. That can all be suddenly derailed by adverse health that keeps us from doing the things that we had hoped to do, and it is certainly something to account for in your financial planning scenarios. But have you ever considered the opposite? What if you are actually too healthy, meaning that you end up living longer than you had planned? In other words, what if you outlive your money? If you retire at the average age of 65, there is a 46% chance that you or your spouse will live beyond age 95. That’s 30 years of retirement! If you fully retire early, your investments may need to last for 40 or more years without any income to supplement them.
Typically in retirement, it is wise to change your investment allocation from growth-related assets to income-generating ones to start providing you a predictable paycheck and to avoid some of the high fluctuations in portfolio value. However, if you become too conservative in your investments and they do not keep growing in value and you live into your 90s or even early 100s, you risk running out of money or losing purchasing power due to inflation. This is referred to as longevity risk. To control for it, it is important to keep a decent percentage of your portfolio invested in stocks with long-term growth potential. Our firm uses an investment glide path that decreases portfolio risk during the decade surrounding retirement to address the sequence of return risk and retirement date risk, but it becomes more aggressive again afterward to protect against longevity risk.
More information here:
8 Things to Do with Financial Independence Besides Retire Early
What If I’m Unhappy Retired? Can I Jump Back In?
Some of the risks of retirement are less tangible. As physicians, we are used to being needed and making a significant impact on others’ lives. After you retire, no one is going to pay you as much attention. You might feel unneeded and unfulfilled. I hear that it is quite common for people who have worked hard all their lives to find that not working is a major letdown. One of the risks of retiring too early is that it might not be easy to jump back into the workforce if you decide you aren’t enjoying all that free time. Medicine is always changing, and physicians can quickly lose skills if they are not constantly being honed. Depending on your chosen field, maybe you sold your practice and there really isn’t a good option for part-time work. It is great advice to try to leave your options open as you transition away from medicine or to find some other work or volunteer opportunity that will give you something on which to focus your attention.
The Bottom Line
I started this article on the beach in Hawaii pondering my future and calculating in my head the possibility of an early retirement. Let’s see: the market had just crashed, and my investments were down significantly. Inflation was climbing to a level we hadn’t seen in decades. I am fortunately very healthy and hope to live well into my 90s. And although I was ready to be done with clinical medicine, I didn’t think I would be happy without something else to fulfill me. My conclusion: it was a terrible time to retire. My solution: find something else that I enjoyed, go back to school, and launch a new career in my mid-50s. Not risky at all, right?
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questions about the best way to save your money in tax-protected accounts, hire a WCI-vetted professional to help you figure it out.
What retirement risks worry you the most? How are you planning to mitigate those risks? Can you see yourself retiring early? Comment below!
[Editor's Note: Dr. Bryan Jepson is a board-certified emergency medicine physician and a licensed financial advisor. He is finishing a master's degree in Finance and Risk Management from the University of Colorado-Denver (graduation December 2023) and is concurrently preparing for the CFP licensing exam. He works for Targeted Wealth Solutions, an independent financial advisory and planning firm with a focus on healthcare professionals. He lives in Monument, Colorado, and he is married with three adult sons. He enjoys hiking, running, fishing, playing the guitar, and reading in his recently precious spare time. This article was submitted and approved according to our Guest Post Policy. We have no financial relationship.]
Thanks for your post. We are all different, so I agree that we should seek to know ourselves. Some of us need a plan, but some don’t. I retired at 52 without a clear plan, but I understood what I valued. I would tell my patients “I don’t golf or enjoy watching TV. I will have vocation, I just might not get paid for it.”
I read someone last year that used the metaphor of a game.
From age 5 until our late 20s most of us were leveling up every year, and “winning” the game. The rules were pretty set in stone.
Then we entered the family and career stage. While as physicians we had some advantages, there are still rules to this game that we can’t control,
In retirement/FI we now get to decide what the rules are in the game. Some of us will continue to want to play the same game of leveling up/winning. Some of us will find that we want to play a different game entirely. While there will be a learning curve, I believe if you are able to discover what it is that you want it will help you as you encounter these challenges.
Good comment, Stephen. Thanks for reading. I think the important point is that you retire “into something” and not “away from something.” Some people are comfortable just winging it and are ready for whatever adventure life brings them. Others are planners. I’m more of a planner, for sure. Know yourself and what makes you happy! The key is that you want to be able to hold the reins.
Can you give some details on your CFP and finance education?
Would also love to hear your numbers- how much you have saved at this point, your asset allocation, how much you anticipate making with your new career, etc. Going on 52, every year I wonder if this is the year I will be done with emergency medicine.
Hi DL, thanks for reading. As a registered financial advisor, I can’t give you specifics tailored to your situation unless you are a client (that’s a legal requirement). Unfortunately, the answer to most things in finance, though unsatisfying, is “it depends.” The more clients I work with, the more nuances there are to everyone’s situation which is why a financial planner can help you. A common rule-of-thumb is the 4% rule which says you should have enough money when you start your retirement that you can withdraw 4% of your assets per year and live the lifestyle that you want to live in retirement without running out of money. Some people say that is outdated and it should be less than that now. But, again, a lot of that depends on how you invest, your risk tolerance, your desired lifestyle, your projected longevity, your projected expenses, etc., and those are different for everyone.
How much do I expect to make in my new career? Not anywhere close to what I made as a physician, but that wasn’t the point of switching.
Or alternatively, more than 4% using a variable withdrawal strategy.
Hi Jodie,
I have a half of a semester left in a Masters in Finance and Risk Management degree. It has been really fun to go back to school, actually, at my ripe old age, and to study something completely different than what I studied the first go around. It is basically like getting an MBA but really focused on the finance side rather than operations side. I took classes ranging from accounting to economics to financial modeling for businesses to corporate risk management to commodities to derivatives. It dives pretty deeply into the math and analytics and is good preparation to become a Certified Financial Analyst (CFA).
The Certified Financial Planner (CFP) designation is largely considered the gold standard for financial planners who help people with personal finance, retirement planning, investment planning, tax planning, estate planning, budgeting, debt management, etc. It is akin to a board certification in medicine (you don’t have to have it to practice but it lets your clients know that you have received a certain standard of education and experience to be the best at your job). There are many other certifications out there and you can get a masters degree in financial planning as well (education focus would be similar to the CFP education). CFP is probably the most recognized and would be a good place to start when you are looking for an investor.
Hi Jodie,
I typed up a response and then it disappeared, so hopefully this isn’t a duplication.
I am currently one-half semester away from finishing a Masters degree in Finance and Risk Management from University of Colorado-Denver. It has been fun going back to school at my ripe old age and learning something completely different than I did the first time around. A Masters in Finance is basically like getting an MBA but more focused on the finance side of things rather than the operational side of things. I have taken classes ranging from accounting to economics to business financial modeling to commodities to derivatives and a lot in between. It dives pretty deeply into the math and analytics of finance and would be good preparation to become a Certified Financial Analyst (CFA).
The Certified Financial Planner designation is a bit different but I’m finishing that up as well. It is more focused on personal financial planning or small business planning with focus areas that include budgeting, insurance planning, investment planning, retirement planning, efficient tax planning, estate planning, debt management, etc. There are a lot of different designations in the financial planning world, but the CFP is probably the most recognized and is generally considered the gold standard. Think of it like a board certification in medicine–you don’t need it to practice, but it gives your clients some assurance that you have completed a standard of education and experience that should make them feel comfortable in your ability. There are also masters degrees in financial planning that would have similar educational focus as the CFP. Looking for someone with a CFP or equivalent masters degree would be a good place to start when shopping for financial advisors.
Don’t know why both of those comments were held for moderation. Sometimes that happens and spam gets through.
Thank you so much for your reply!
Any suggestions on how to judge the value of various CFP or masters programs? WCI has had a tremendous influence on me and I’m interested in going back to school (more interested in general personal finance than the nitty gritty of investing) but finding it difficult to rate various programs.
I did the CFP through Bryant University (Boston Institute of Finance) and thought they did an excellent job on their content and test preparation. There are other options out there which I’m sure are good as well. The CFP content is standardized by the CFP board itself and it is then just up to the various educational platforms to teach it and deliver it however they think is best. The CFP test is administered by the CFP board and not the educational provider. I’ve been very happy with the BIF program. If you want to do a Masters in Financial Planning, there are probably fewer options than a Masters in Finance or MBA but you just have to look around. Some of the CFP educational providers allow you to take a few more classes and turn it into a masters program through accredited universities.
Thank you!
Really appreciate it
“I am fortunately very healthy and hope to live well into my 90s.”
“If you retire at the average age of 65, there is a 46% chance that you or your spouse will live beyond age 95.”
Sorry in advance for this rant. I hope you live long and prosper. In the meantime, live it up and don’t work full time too long. One real risk of retirement is that you don’t get a retirement. I’ve known quite a few people who were surprised by death, some in their 40’s and 50’s.
The recent impact of the pandemic is not yet reflected in the life expectancy tables and a lot of the data are very old. Of course anecdotes are just anecdotes. Sadly, I’m sure a lot of people who died during the pandemic were planning on many more years of retirement. Three quarters of the people who died during the pandemic were over age 65.
In general, of men age 30, ~ 84% are alive at 65. Of women age 30, ~ 87% will be alive at 65. So at 30, you have about a 1 in 7 chance of dying before age 65. At my wife’s recent 40th class reunion, about 14% of the class had indeed already passed away.
For a 65 yo male, avg life expectancy is 17 years to age 82. For a 65 yo woman, it’s 20 years to age 85. In fact, about two thirds of people over age 85 are women, but about half of female Medicare enrollees age 65+ had difficulty with activities of daily living (ADLs) or were in a facility.
Among the 90-and-older population, women outnumber men by a ratio of nearly 3 to 1. There are ~ 38 men for every 100 women ages 90 to 94, with the ratio dropping to 26 for ages 95 to 99 and 24 for those 100 and older. As for the title “nursing home residents”, this was about 20 percent for those in their lower 90s, more than 30 percent for people in their upper 90s, and nearly 40 percent for centenarians, which parallels the incidence of dementia that rockets up with increasing age. (“90+ in the United States”, 2008).
The 46% number “one partner lives to age 95+” is from cherry picked data of non-smokers in excellent health. The general chances for a woman to live to be 95 is around one in seven, roughly equal to her chance of dying before age 65, and the average chance for a male to live to be 95 is around one in 12. I’m not planning for the 1 in 12 odds of living to age 95, but I did plan for the 1 in 7 chance of not seeing age 65.
I’m not trying to be a downer, but I think a dose of realism is good here. As I’ve said before, in the “old old” range, you may not have an enviable life and you may not be spending it up unless it’s for nursing home care. If you do get to be over age 85 intact, you deserve a party every month.
I’m going to live it up from age 55 to 75 and count anything “intact and able” after that as a lucky bonus. My father went to part time at age 62, then stopped working at age 65. He was “intact and able” for only five years and died at age 79 of Alzheimer’s. My father-in-law finished work at age 58 and then travelled and pursued his hobbies for 20 years. He died, intact and able at age 79. No male in my family has lived past age 86 for ten generations and extremely few were “intact and able” after age 80 or so. Now, if you have many relatives that live to be 95 intact, you may have extra long telomeres, so plan accordingly.
On our two recent week long 120km hikes in Europe, the number of participants over age 80 was minuscule. We saw a few vigorous elderly folks, but they are rare, even in a region where it’s part of the lifestyle. So, by all means, plan for your later years, but not at the expense of your “best retirement years”.
On a more positive note, I wish you the best in your new endeavor. It takes a lot of courage to go down a new path in your mid 50’s. Your new pursuit also has less direct health risks, is scalable and can be remote, like my current half time job.
Points well taken, Anthony. Yes, it is important to live your life today to its full potential because you never know. But at the same time, if you don’t plan for a long life then you might find yourself in real financial hardship when you can least do something about it. As your physical and mental abilities decline with age, you tend to spend less money doing stuff and more money on healthcare. Our company uses a retirement planning glide path that naturally decreases spending in your 80s and 90s but still plans for the very realistic possibility (percentages are always a moving target, right?) that you or your spouse will live into your 90s and will still want to be independent financially.
Thank you for your words of encouragement on my new career. It has been a fun adventure so far and all those things that you mentioned definitely factored into my decision to go for it. Still working part-time in ER as well.
Superb comments. Prepare for the future but don’t neglect the present. I have been doing locums for almost 4 years now and turn 59 next month. I still love the work just hate being away. I work 1-2 weeks a month but am constantly barraged to work more. Just because you may live to an old age doesn’t mean you’ll be functional, able to travel, etc. I love my 5 kids but I don’t plan to leave them millions that I could have spent!!. I do have quite a few passive investments and am embarking on a new business that may allow me to decrease my locum work. Don’t wait to travel and do what you want. Someday may never arrive. I see so many ill patients younger than I am that have lost all functional ability and will never get it back. My wife and I try to do some kind of trip every month and now when I’m home it’s like vacation. Yes, fund that 401k & back door Roth, do PDB plan if you can, etc., but book that trip. You simply don’t know what tomorrow will bring. An accident, health issues can rapidly derail your retirement plans. Don’t wait for someday, it may never arrive.
Thanks for the statistics. People think they are going to be traveling the world when they are in their 80’s or even late seventies. Even if they can financially, most won’t because they rather settle somewhere and be comfortable. Those who do travel heavily at that age will not be doing the things they would normally do at 55 or 65. The retirement spending curve also comes to mind. The U shaped one. The one where several studies have shown how spending goes down with age and specially in your seventies and beyond. I say if you are really worried about money not lasting into your 90’s, then do a 3.5% WR or do 4% and when you get older you most likely won’t spend even 3.5%. You can find something very part time that pays some of the bills and do it while you are sitting around waiting for your next adventure. Even a 40K per year income will increase your portfolios longevity significantly.
Anthony thank you for all that food for thought on longevity. Unless one is going to be funding their family’s younger generations (vacations, gifts, etc) then I think that the later years must surely get cheaper in addition to the chances of reaching them reducing.
My direct experience is that people in their 90s enjoy a good book, chat, and cheap entertainment (TV, card games, etc), but their major expense is care.
That seems a lot cheaper than the 40-70 age range where people are often seeing the world, eating out, being active, and finding other (expensive) ways to spend their ample free time while enjoying the fruits of their labor – by living it up a bit.
The reply comments to yours are really good too, for thinking about how to balance and vary the expenditure with age.
I’d really like Jim to cover this as a blog or podcast since it’s another great “find balance” topic like Hedonia and Eudaimonia. Perhaps not so easy for Jim since his well deserved success probably means there’s no need to find this balance, but I’d still appreciate his thoughts.
I appreciate your input on a difficult topic…our own aging and mortality. My experience is similar on the activity of the 85-95 year old age group.
On our Camino, there were days of walking up to 17 miles, partly in the afternoon sun. We met one couple who were about age 80 and they had their children (about age 60) with them as a support team. On our Wicklow Way hike in Ireland, we met two Belgian couples that were all 62-72 and they were in better shape than us, knocking out >25 km on several days without complaints. These people were rare. They give me hope.
We are planning on several hiking vacations per year from age 60-70. They are all about 12 miles per day for a week. We train for these.
Recently, I developed “tennis elbow” from doing the yard work and some home renovations. I guess I have “weed whacking, leaf blowing , and wrench turning elbow.” I can’t take Motrin due to mild CKD from prior NSAID use. It will take weeks or possibly months to heal.
I was a sprint triathlete from age 40-55. Now, I get injured more easily, take longer to heal, and am more careful. I broke my ankle on a trail and this took over two months to get back to scratch. I swim, walk, hike, and do some Pilates. My triathlon bike is collecting dust. I lost 15 pounds training and doing the walking vacations, and eat about 1800 calories a day. Life is already different than from ages 40-55. It’s easier to gain weight, and I’ve lost a bit of muscle.
Luckily, I’ve developed healthy hobbies, enjoy swimming and hiking, and have become an excellent cook, but I do like playing cards, chatting, reading, writing, and watching some shows…
Now I know why older people move slower…to not get injured. 😊
For sure the retirement smile is a thing. The Go Go years and early slow-go years and no-go years are all a lot more expensive than the later slow go years when people aren’t able to or interested in spending much money.
Not sure what else I could write about that though nor what to “balance”. I guess I could say cut back at work earlier than you think you need to because you probably won’t need all that money, but that is really an individual thing. Some people really do need more money!
You know your detailed family medical history back 10 generations? That is remarkable.
That is 1024 direct male and female ancestors, plus their siblings. Could be thousands of people. How did your family manage to record and save all this information?
If you had to do it over again, would you advise physicians to work for the VA or other organizations that offer a pension?
Hi Greg,
There are pros and cons to working with a company that offers a pension (for physicians, the VA or the military would be the most likely). You can often make more salary in the private sector, but it requires more discipline to invest it wisely. There is definitely some great lifelong retirement security with knowing that you will get pension income every month and that it will never run out as long as you are alive. But there are other factors to consider in making that decision besides pensions that you want to be sure that you understand going into it.
The true benefit of a VA or military or other government job is the inflation adjustments to increase the pension via a Cost of Living Adjustment (COLA) or a modified version of that. Another especially with military retirement is the health insurance (Tricare) aspect. If you want to or can better control your practice by owning it then you will lose a lot of that control with these salaried positions.
However as more and more of us work for others anyway comparing the different advantages of private vs government, and the specific job(s) offer’s salary and benefits is important. As pay goes down these government jobs get more competitive with salaried jobs outside government, and, much more slowly than private practices, government pensions and benefits are becoming less generous.
One other consideration for the government jobs is how portable they are and all the possibilities for advancement (and adventure). Kaiser Permanente (IIRC and that may change!) limits you to California. Joining Dr. Smith in town will not transfer beyond the nearest suburbs. In the Army you can jump out of airplanes (loved it) and fly helicopters and jets (spouse loved it) and live overseas (loved Germany and England, and Iraq Korea Ukraine- no, not recently- and Bosnia were at least interesting). In the Public Health Service you could advance to become the US Surgeon General. In many of these jobs you could (or may be ordered to 🙂 ) work overseas with generous pay adjustments that make such a life of travel affordable while still practicing US medicine. Positions are available all over the US with minimal trouble re licensing in a new state and with paid moving expenses.
As someone doubtful about my business skills and preferring a huge group practice with excellent malpractice and after hours coverage I believe not starting my own practice (other than my locums businesses) was a wise choice. I also expect I would have worked many more hours running my own practice due to the busines management aspect especially than I have had to in non residency, non deployment!, military or civil service practice (under 60 hours a week and you can squawk if it’s worse. I even know some who keep it under 40 hours per week but I don’t respect them.).
For military service of course you have to be willing to support the military’s primary job, being ready to (and doing so) wage wars including deployment and take the risks of combat and living and working away from civilization to which we are accustomed. (Most wartime health problems are from disease or sports injuries not enemy fire.)
But adventure, risks of war (I never deployed in 7 years but spouse had several wartime or peacekeeping years over a 25 year career- one when our boss let us decide which of us would go so we sent the parent not breastfeeding), and family separation aside, having COLA pensions (both of us, mine based on both my military and civil service- for the Army and for the VA) and health insurance for $60/month + limited copay and deductible (Tricare- if it were the retiree health plan from my civil service the expense would be higher) starting age 46 is incredible and we are very glad to have taken that route. Spouse even opted to leave medicine fully at that age and 12 years on no regrets. I opted to maintain my ability to resume full time doctoring until 58 though with several sabbaticals throughout life supported by our dual doc income and our living like a ((very well paid)) resident and then very well paid Army officer with only one income – investing the second salary when I worked has cushioned us well beyond our retirement pensions, but I often count Tricare as our most lucrative benefit.
I second this from Jenn! Dr. Jepsen – your second paragraph was quite sobering. It made me very happy for my military pension and very enjoyable part time job at the VA working with “my people” and still having fun teaching residents. I hope you find a similar degree of happiness in your new endeavors – and I heartily applaud your decision to escape a bad work situation. I find that my enjoyment of life is worth quite a lot of money (that I am unwilling to work more to earn!)
I appreciate this article, and I hope you do go on to write an article about disabled adult children and their effect on parents’ retirement plans. We’re facing that situation (though unsure right now about the degree of disability) and I’ve been researching SSDI/Medicaid, social security/Medicare on a parent’s record (for disabilities that start before age 26), the pros and cons of special needs trusts for higher net worth families, etc. And of course thinking about how to stretch our retirement funds to possibly support a child for the rest of their life. I would welcome an article about your experience with adult kids with disabilities.
AT,
It is a very important topic that unfortunately a lot of people have to consider in their retirement planning. Some of us have to plan for lifetime support for our disabled kids, not just ourselves. I can definitely address that in a future article, WCI willing.
Dr. Ellis,
Those life expectancy statistics deserve their own column on the blog. Especially if they can be combined with real numbers from an actual retiree population about spending by age over the course of a few decades.
I have an autoimmune chronic medical condition that will likely shorten my life span significantly. After reading this column, I’m thinking that my current plan of working full time until 55 may not be a good idea. That might be leaving too many good years on the table. I’m currently 44 in a two income household with one child in elementary. My parents and my MIL are all financially independent and don’t need our support. Any suggestions on how to cut back to an irregular schedule in a procedure-based dental specialty?
I can’t advise you there. Procedure based dentistry doesn’t seem a “work from home” deal and I don’t know much about it. Cutting back is about reducing expenses. We went from the McMansion to a smaller place that cost half as much. All our bills went down, but almost all of our kids are grown or away at college.
It’s one of the hardest things to do…predict when your abilities will decline. As noted in my answer above, the years from 55-59 have shown me the writing on the wall. I do not kid myself. I’m slower, fatter, and weaker than I was at 40-50. I fight this trend, but it will still “put a whoopin’ on me.”
Did you consider going part time before completely changing careers?
Hi GK,
Definitely, in fact I did drop my shift load before jumping into my finance degree. It still felt like an energy suck, though. I’ve tried to understand my own feelings around this move enough to explain it to others (although plenty of doctors just “get it”). I think for me, after 28 years since medical school, I just felt stagnate in my career, and maybe that is the problem. So, decreasing shifts wasn’t really helping that much. I still felt stagnate and never looked forward to going into work, even though I enjoyed the extra time off. Changing careers and learning something new has brought me positive energy again that I can carry forward and stay productive for the next decade of life. I knew that, for myself, I couldn’t achieve that by just working less. Mentally, I’m discovering that switching from a net saver to a net spender is a challenging transition and I’m just not ready for it. So, I wanted to find something else that I enjoyed doing that would still provide some income but that would reenergize my brain and motivation. I am still working part-time in the ER while I build up my financial career. After that? Not sure yet. There are plenty of other ways to prevent career stagnation besides doing what I did. That’d also be a good blog topic if it isn’t already written up. Thanks for the question.
Interesting article. But please expand on your thinking. You decided you wanted to work less but still needed earned income. That would have suggested working at the highest hourly rate possible. Instead, you invested serious time and money in preparing for a lower-paying career. This sounds like a losing proposition to me.
I suspect you could have earned more while working fewer hours as a doc.
Also, why would someone hire an advisor who is just out of their CFP program, not yet certified, for financial advice? Who are your customers? What do you charge?
Afan,
Working less was not necessarily my goal. Working different was my goal and extending my productive working years was my goal. It wasn’t about the money for me, otherwise I would just keep working in the ER. That is where I would make the most money. I just didn’t feel like I could keep doing that for much longer. So, it was time to make a change and “retire into” something different that I would enjoy more and would still allow me to pay my bills and not tap into my retirement savings yet (especially given the bear market and high inflation).
Fair questions about hiring me: advantages (I understand doctors, I have lived through multiple market crashes, I have been studying personal finance on my own for 25 years, I will have both a masters degree in finance and CFP certification very soon, I work in a company where we use a team approach not a silo-approach so we have plenty of experienced eyes looking at your plan), disadvantages (I’m a new financial planner–but if that scares you, choose one of my partners as your lead advisor).
Almost all of my personal clients are health care providers. Our company sees a broader range of folks. Costs depend on plan complexity and the particular service you are looking for. If you are interested in more details on that, you can check out our website targetedwealthsolutions.com or set up a free consultation and happy to go over that with you.
Just wanted to say that I really enjoyed this article. I am in my 40’s and in my 20th year as a full-time PCP and am very self-aware of my burnout (the very fact that I administer the Maslach Burnout Inventory survey to myself every few months is pretty telling too). But i am also the primary breadwinner (female) for our household and make about 5x my husband’s salary. I am also an unusually highly paid PCP (local market is unusual to say the least). With 3 kids (oldest only in middle school), I feel that I simply earn too much to cut back or quit. Why not just reduce my hours can go part-time? Well, I am also 20 % administrative/associate chief in my group and to be honest, we don’t look too favorably on part-time PCPs. Having a part-time PCP means someone (besides you) has to carry and manage your panel while you’re not in the office. I’m also not interested in switching to an urgent-care type gig b/c the hourly rate will be much less than what i’m currently making, plus the Urgent Cares facilities nowaways are hiring cheaper-cost NPs who can work independently. And thus my conundrun. I very much feel the golden handcuffs. Everything’s a trade-off. We live in a HCOL area, and though my kids are in public school, the activities/lessons/camps are super $$. And frankly, I enjoy my nice vacations. So yes, I like my salary and don’t want to take a lower salary. But work is so very arduous and I ask my myself on a daily basis how long I can keep this up. I actually have a sizable net worth, more than most my age, but can’t shake my scarcity mindset and also cannot fathom the idea of withdrawing at this point, even if I were to discover that I’m FI (i’m maybe close?) And so I keep plowing on, dreaming of the day I can retire, but as someone in my 40s, I recognize the downsides of retiring early, and this article solidifies that. I don’t really have a question, just musing out loud & wanted to commend you for being wiling to take the risk to make a pretty significant pivot at this stage of your life.
Thanks for sharing your story.
Yes, JJ, thanks for the comment. I get it completely. It is surprising how much emotion there is around retirement and how hard it is to cut back (for a variety of reasons) even when you know that you can from a financial perspective. It’s definitely harder to even think about it when your kids are still young. Good luck. Make the most of your time off to try to rejuvenate!
This blog entry was really interesting and many of the comments were very insightful and edifying. I wonder if most people consider mid 50s to be the twilight years, and of course I’m talking physicians here, but I imagine it might also depend on specialty.
What I see in the rat race generally is an overwhelming ignorance (They ignore it, I’m not really calling people stupid here) about how valuable the 40-60 age is for people, because that’s an age in which you can afford to do things you might not have been able to do previously, and for some it’s the last segment of reasonably good years. I’m very interested in others’ self assessment on fitness, health, and their general ego with regard to how long they think they can last and at what quality. This question becomes very stark for those who aren’t honest about their participation in the rat race and all the stress they have built up, and continue with, as they “keep up” with higher costs of living and pressures to maintain that status quo.
I’m clearly a different poster in many ways to the average person, and even the average doc, as I’ve valued time over money and switched to more part time work earlier in my career. Luckily demand is tremendous right now for physicians. What I can’t get over are a few things which I could expound on but I’ll leave at this for now:
1) total disincentive for greater productivity by this tax code, especially for single people – which I think is also exacerbated by being in a field where you increase odds of a suit or its hassles as you do more
2) complete hopium that the US economy and markets continues, and ignorance of the dire fiscal situation of the USA and its distraction with worldwide wars as proof of this, among other things
3) as a result of (2), a more dire picture of health and longevity since the injection craze and clear increase in mortality, as well as funding that won’t be there in the future for most Americans re: CMS. That, or amazing increase that continues with health costs. The health picture overall is going to be (more than) startling this decade, among other things.
Dr Jepson,
Thanks for the excellent insight. As we are the same age (and were in the same residency class, in fact!), I have been considering the same issues you mention. I am also not ready to retire however I am interested in a different career path as the previous 25 years full-time in the emergency department have been challenging although gratifying.
I am currently managing partner of a medium sized ED private corporation with 33 physicians and 25 APP’s. We have been exploring the option of allowing some of our senior physician partners to cut back on shifts to 5–8 shifts per month instead of retirement in order to allow them to maintain their income and partnership benefits (health insurance, retirement vehicles, etc). This also benefits the younger partners in that the senior physicians are still in the mix for weekend shifts and holiday shifts. We also have a deeper pool physicians for covering shifts in case of an emergency illness, pregnancy, pandemic. Allowing continued practice of emergency medicine with this greatly reduced workload allows many of us to postpone retirement significantly while enjoying an improved quality of life.
Good on you for doing that. My group has been doing it for years. I’m amazed that more groups don’t allow it. There is no cost to them to allow me to continue to work 6 shifts a month.
Pete, my friend, great to hear from you! That is excellent that your group is valuing longevity and allowing the older docs to shift to part time status and continue their place as shareholders. It seems to be a hard sell for many groups to the younger doctors. My group doesn’t have that in place specifically based on age although we do have an option to go part-time with a cut in shareholder revenue. I do think more physician groups need to recognize and accommodate the changing needs of the older demographic of docs who want to keep their hand in medicine but can’t keep up the same pace as they did five or ten years ago. Great job!
Pete, my friend, great to hear from you! That is excellent that your group is valuing longevity and allowing the older docs to shift to part time status and continue their place as shareholders. It seems to be a hard sell for many groups to the younger doctors. My group doesn’t have that in place specifically based on age although we do have an option to go part-time with a cut in shareholder revenue. I do think more physician groups need to recognize and accommodate the changing needs of the older demographic of docs who want to keep their hand in medicine but can’t keep up the same pace as they did five or ten years ago. Great job!
Dr. Jepson,
Congratulations on your 2nd career! I have a few years on you and am winding down my clinical work. Looking for a productive way to spend my time after medicine and, like you, I’m very interested in personal finance (financial planning and investing). A salary in a 2nd career is not the motivation, but a modest salary would be great to avoid/ reduce dipping into the nest egg.
Is there a large market right now for CFPs? I would be 65ish when time to start… is that too old? Do you have an undergraduate degree in business or finance? I do not. What certifications in addition to CFP do you think increase one’s marketability as a financial planner (mentioned above are CFA, Masters in finance, Masters in financial planning)? Last, where can I find CFP educational providers that allow for more classes and turn into a Masters program? Thank you in advance!
Hi CR
There is a lot to unpack in that question. I’d be happy to talk to you about my experience. Why don’t you reach out to me via email and then we can set up a zoom call. [email protected]
CR, thanks for the comment. There is quite a lot to unpack in your questions and I would be happy to talk to you personally about my experience if you would like to e-mail me at [email protected] and then we could set up a phone call or zoom call. But in case there are others interested in the responses: Financial planning is a growing field, and the CFP is the most widely recognized and respected certification within it although you do not need to be a CFP to be a financial advisor or planner. There are designations out there that take less time (a few months of study) and expense to get and to be able to use right away. First, to be able to work with clients in the financial industry, you need to take a licensing test from FINRA like the series 65 or 66 test. I did the series 65. This allows you to work as an investment advisor representative (IAR) for a registered investment advisor (RIA) (lots of acronyms in finance). The CFA certification is geared more towards fundamental investment analysis and is very heavy on math. It takes about 6 years to get it and a series of three challenging exams. The CFP test is also difficult, plus there is an education requirement before you are eligible to take it. CFP also has an experience requirement 4000-6000 hours (depending on the particular track you choose) before you can use the marks. So, if you are a late career changer, you have to decide if the time to get the designation is worth it. The financial services industry is very broad, and people find their own niche within it, but it typically takes several years to build your book of clients before you make much money at it. There are probably multiple options through various universities for a Masters in Financial Planning. You’d have to google that. I know that the College for Financial Planning offers CFP education and masters degrees as well as some of the other certifications that I was talking about above. A masters in finance (which is my degree) is more geared toward financial analysis (CFA stuff). I was a biology major. Didn’t have any business classes until my masters program.