[Editor's Note: This republished post by Physician on FIRE, a member of the White Coat Investor Network. It's one of my favorites, a true classic. I really like how it points out that you really don't know if you love practicing until you no longer have to.]
My little FIRE blog is one of many early retirement blogs, but it was the first written by a physician. If you look around, you’ll find quite a few young men and women who have successfully pulled off an early retirement at age 30 to 35, an age at which most physicians will have a negative net worth.
For example:
- Pete & Simi @ Mr. Money Mustache retired at age 30.
- Justin @ Rootofgood retired at 33.
- The Frugalwoods family retired at age 32.
- Anita @ Power of Thrift retired at 33.
- Brandon @ Mad Fientist retired at 34.
- Sam @ Financial Samurai retired at 34.
Yes, they all have blogs, but their ability to retire is independent of any blog income they now enjoy. Or maybe they’re not real, and I’m not real, and early retirement is a farce. Whichever it is, physicians can’t realistically earn enough from being a doctor by those ages to retire.
Early Retirement for Physicians
If we’re going to talk about early retirement for physicians, we need to define what it means to retire early in the context of a late start, excessive student loan debt, and a self-imposed debt we feel we owe to ourselves or society after so many years of education and training.
It’s also wise to separate FIRE into its component parts. There is FI = Financial Independence, and RE = Retire Early. It is more than acceptable to strive to become financially independent without any notion of wanting to retire early.
In fact, once you have saved enough to retire, and truly have no interest in funemployment, you have proven that you are truly happy in your career. That’s fantastic!
Conversely, if you believe you love your job and wouldn’t practice any differently if you had millions in the bank, well… you might feel differently once you actually have your millions.
Honestly, that’s where I’m at. For years, I thought I loved my job. It turns out I like it alright, but I loved the paychecks more than anything. Now that I don’t rely on the money coming in, I’m more aware of the stressors I once took for granted as normal, the unpleasantness of being at the constant beck and call of the loathsome pager both day and night, and the absurdity of the hoops we jump through to satisfy a multitude of Boards and governing bodies.
Career dissatisfaction can be addressed in multiple ways. “Resiliency training” is the new “fighting burnout.” Working half-time has worked wonders for some, including this radiologist who wrote a physician’s guide to part-time work. Today’s post, though, is supposed to be about early retirement, so before I get too far off topic, let’s return to the subject at hand.
How Early is Early?
“How Soon is Now?” asked the Smiths. If I had retired the moment I was FI, it would have been a couple months shy of my fortieth birthday. That would be very early, but I know physicians who stopped practicing even earlier. I’ll break it down into five-year increments.
Who Retires at 30 to 35?
Retiring after a career of zero or a few years may sound ludicrous, but there are a few scenarios that are not so far-fetched.
The stay-at-home spouse. I worked with one family physician whose wife finished residency with him years earlier. Diplomas in hand, she remained home to raise and home-school their children. To my knowledge, she didn’t work a single day as an attending. She may have been retired from medicine at age 29, actually.
The Suddenly Wealthy. A large windfall at the beginning of one’s career could be all it takes to transition a disenchanted physician out of practice. The money could come from any number of sources. A startup company could be sold to a tech giant. An app or website that really takes off could be worth millions. Inheritance and lotto winnings could come into play here.
The Career Transitioner. While it’s not exactly “retirement,” pursuing a non-clinical career is effectively a retirement from clinical medicine. Some physicians may realize that the bedside is not where they belong. A visit to the Drop Out Club (DOC) may lead them to drop the stethoscope, laryngoscope, otoscope, or ophthalmoscope for good. Those that pursue this option rather than residency could do so in their mid-twenties.
Who Retires at 35 to 39?
This is the first age bracket where an extremely early retirement can be achieved based on a physician’s career earnings. I could argue against the silliness of working fewer years than it took to prepare for the career, but that would be invoking the sunk cost fallacy.
The Planner. To escape so soon on your own merits requires some serious planning. Minimize debts throughout medical school and residency. Moonlight if possible. Choose a high paying specialty. Work and live like a resident after residency. Take advantage of geographic arbitrage. A well-executed plan could lead to a retirement by 40.
The Frugal Wanderlust. This physician has never been concerned with the usual trappings that are typically associated with a doctor’s lifestyle. Renting, or owning a simple home, the doctor has no interest in being tied down.
A frugal physician with few material needs living a middle-class lifestyle can afford to explore the world in a similarly frugal fashion before his or her fortieth birthday. If so inclined, he or she may incorporate the practice of medicine into travel, performing mission work where quality healthcare is needed most. This physician saves $10,000 a year on travel using smart credit card travel rewards strategies.
Who Has Two Thumbs and Retires at 40 to 45?
This guy. At this age, some prior planning and relative frugality remain paramount to a successful early retirement.
Mid-Life Crisis. At roughly the half-way point in life, physicians know all too well that life is precious and sometimes short. We have courtside seats to the unfolding of cruel and unusual tales of disease and injury dramatically altering or ending a life prematurely. Working long hours, fighting burnout, and crossing our fingers that we’re not as unlucky as this patient or that one, we realize a certain need to start living differently. For some, that will mean retiring early.
The Family Man or Woman. I may have a modicum of mid-life crisis in me, but I’d like to think I’m more of the family man. After providing for my family for more than a decade, I regret that some days, I’m not more a part of it. Realizing that our time with boys at home will soon be halfway over, I want the next decade to be amazing. While it could be good if I were working, we can give them incredible worldly experiences that are incompatible with a full-time job.
Who Retires at 45 to 49?
The Accidental Retiree. Entrepreneurial physicians at this age may find that a side project started years ago has blossomed into something that is more rewarding and/or time-consuming than their day and night job as a physician. The side project could be a restaurant, a website, a life coaching business, or regular television appearances. It could be guiding tours through Florida’s Everglades or the Alaskan bush. Some doctors will choose to follow their passion or pursue the better income.
The Second Breadwinner. In their mid-to-late forties, a married couple could have a combined 30 to 50 years of career earnings behind them. If one spouse has a 9 a.m. to 5 p.m. job they love, and the other has a stressful 6 a.m. to 8 p.m. job they don’t, it might make good sense for the latter to call it a day.
Who Retires at 50 to 54?
The Prudent. This physician shares some commonalities with The Planner, but has had many more years for career earnings and compound interest to pad the retirement accounts. A reasonable savings rate of about 30% can lead to a comfortable financial independence at this age. Retiring at 54 (in the year in which you turn 55) allows full penalty-free access to the 401(k). Compared to The Planner, who would likely have a five-figure annual budget, The Prudent should be able to spend in the low six-figures.
The Passive Income Master. A physician who has focused on creating passive income streams, like Passive Income MD, may eventually witness his passive income match or exceed active income from working. Investments in real estate, for-profit hospitals, surgery centers, or imaging centers come with higher risk but can pay off handsomely. This doctor is different than the entrepreneurial Accidental Retiree, who will continue to be actively managing a side project when leaving medicine.
Who Retires at 55 to 59?
The Forced Hand. Remember the Mid-Life Crisis who feared life-altering health problems? Those issues arise all too commonly in the mid-to-late fifties. A physical disability or ailment has sidetracked many careers of physicians in what should be prime years of their career. A healthy physician may step aside to spend time with and care for an ailing parent, spouse, or sibling. Sometimes, the physician doesn’t choose an early retirement. Sometimes, fate chooses it for him.
The Fed Up. Sadly, there are many physicians who love their patients, and love being their doctor, but have had it up to here with the extraneous roadblocks that make it difficult to do the job they once loved. A new electronic health record. An uptick in insurance denials. Increasingly onerous Board Certification maintenance requirements. Fewer support staff. Decreased reimbursements. More metrics measured without any demonstrated benefit. Which will be the straw that breaks the camel’s back?
Who Retires at 60 or above?
We’re no longer talking about an early retirement in my opinion, but for the sake of completeness…
The Truly Happy. Most physicians will retire after the age of 60, and most will reflect on their careers with genuine pride and contentment. Not every moment is wonderful, but amidst the occasional drudgery, we do have the privilege of working small miracles every workday. Most patients are respectful and grateful for the sacrifices we make. For the majority, retiring after age 60 is not a reflection of any kind of failure, but a confirmation of resounding career success.
Who am I? I’m a Family Man with a touch of Mid-Life Crisis. A future Accidental Retiree and Career Transitioner. A Frugal Wanderlust with Passive Income. A little bit Fed Up, but more Truly Happy. Hoping to be a bit happier when I retire early.
Who are you?
What do you think? What age are you planning to retire and why? Comment below!
The Accidental Retiree
We’re a growing force in the FIRE movement 🙂
I resemble that remark.
Cheers!
-PoF
Physician on FIRE was truly a pioneer in this genre for physicians and has inspired many including myself to follow in his footsteps.
In terms of the breakdown I am in the prudent category. Although I likely can retire now and have basic needs provided at age 47 I hopefully can continue till I am 53 (why that age? It’s when my daughter goes to college). By then I believe I would well be in the FAT FIRE range and likely never have to stress about retirement income.
I figure with her going to school now I am tied down here anymore for majority of school year and being retired fully during this time is not going to add much in terms of travel and experiences.
I am The Formerly Retired! Were a Second Breadwinner couple.
FI due to marrying well, expecting one of us would want to be a stay at home parent and so socking away the 2nd one’s income, GI bill/ academic scholarship kids, geographical arbitrage, mid to upper middle class lifestyle, and and him staying in the military for the pension and Tricare. He fully stopped at 46, me at 49 after he had the house to himself for a year. Now at 55 I am back at work doctoring- unable to find part time which fit all my requirements- and deciding what to spend my ‘bonus’ money on. He is a much better homemaker than I ever was during my sabbaticals/ (unpaid) maternity leaves, though he’ll never do it while pregnant or breastfeeding.
Expect I will work at minimum 3 years to qualify for another small pension but if I make it that long will probably want to stay until he or health or grandkids some day make a 50+ hour work week too long a time to be away from home or travel. Really enjoying it so far two month in, and donating to good causes makes me feel I’m accomplishing a lot more than volunteering for the same groups did. And I can quit any time I want; just have to be certain I’ll never want to doctor again as I’ll burn some reference bridges if I leave too soon or without notice.
All of this sounds great! One question that I’m curious about. Did you take 5+ years off from medicine and jump right back in or were you working as a physician in some capacity from 49 to 55?
I’ve heard it can be difficult to get back in the game after an extended absence.
Cheers!
-PoF
My main concern as well. Had a 2 year+ resume filler (so folks didn’t worry I’d been in prison or an asylum) running for office and being ACA volunteer and then began the year plus process of getting credentialed to volunteer (they hadn’t given a Red Cross volunteer computer access before) where I now work. I then volunteered here for a few years sporadically applying for a job, not until now with success. So these folks knew me and kept hearing well of me from the staff, were getting desperate (no one else hired when I wasn’t), and maybe a new chief in my specialty and with a convoluted career track; and a new one in nursing; liked me at the interview.
Might’ve more easily picked up local locums work, but: huge concern: malpractice. Have been burned before. A claims made private malpractice tail (when I had to move and had the choice of buy tail or go naked) price once tripled on me during a market correction. Having also heard the hell of worries over finances going through a malpractice claim, I felt it was unfair- very- to gamble perhaps our FI and husband’s retirement (I guess just the nonsheltered part, but that’s big in our case) let alone my own just to satisfy my desire to work. So I have held out for crown immunity (occurrence coverage) FTCA through the Army or elsewhere- was getting ready to do federal locums with travel or reapply to the FQHC where I had not been satisfied with management (and where I hear they never take you back) but working full time here is less of a sacrifice than either of those. I look upon this, though, as likely my last job- if I decide it isn’t worth it I expect to stop medical work altogether so hope to enjoy it into my 60s, and maybe even have the clout to negotiate part time with them in several years.
Thank you for sharing. Time away can be tricky, but you seemed to have navigated well.
Best,
-PoF
I’m curious as to what you consider a sound number to retire early (say at age 45-50 and debt free). I realize that lifestyle would also play a large roll but I’ve seen mention of extensive world travel by those in FIRE groups/blogs and they’re age 30’s-40’s.. Besides this blog I follow Go Curry Cracker and ‘think’ they retired on one million in their 30’s which seems scary with the probability of many more years ahead and likelihood of several bear markets/recessions. I highly doubt that PoF would decide to retire early on $1M (or even $2M). Am I overly paranoid?!
Depends on what you spend. It makes no sense to name a number without a comparison to how much you spend.
Yes, that’s why I mentioned lifestyle and current lifestyle could change either way when retire. Let’s say you’d like to plan on $125-$150k per year and you’re 50 years old – Is there a calculation that you use? Thanks!
https://www.whitecoatinvestor.com/the-4-rule-safe-withdrawal-rates/
$150K*25 = $3.75M
Be aware that $150K has to include taxes and advisory/investing fees/costs and that you may need to adjust as you go in case sequence of returns risk shows up early in your retirement.
Family Man and Accidental Retiree. Great article; you are a master lumper and categorizer.
Thank you, doc. I’ve been called worse.
To lumping and organizing!
-PoF
Great article, PoF. I am mix of a Planner, Wanderlust and Crisis. We simply want to do other things besides work, and I realized early after training that the corporate medical culture would take every breath of one’s soul away if I did not play defensively. So we are creating the perfect life as possible now and moving towards FIRE in about 5 years with a reduced work plan already in action. Motored by WCI and greatly inspired by your website and MMM.
Your mix is similar to mine, Firefly. Best wishes as you craft the life you want to lead going forward.
Cheers!
-PoF
Well, I reached FI and work part-time because I want to. It won’t be early if and when I ever “retire.” So, I guess I’m not on the list.
Well then, I’d say you’re Truly Happy.
Retirement, whether early or not, is certainly optional.
Cheers!
-PoF
Well, it looks like, almost to the month, I fall in the Venn diagram overlap between the Prudent and the Forced Hand given a recent medical diagnosis. Financially likely well positioned to retire with a low 6 figure income, although was thinking more likely in a year or 2 and more on my own terms. But this new journey may end up being a positive as I reevaluate what is most important in life.
I’m sorry to hear that, BMAC.
Best wishes for a positive outcome, both with your health and your post-work life ahead.
Warmly,
-PoF
My wife and I are in the Second Breadwinner category with dual doctor incomes, except we are child free by choice. We are DDINKs 4 Life.
This should hopefully allow us to reach FIRE by age 40 in a VHCOL area. But we like to think of the ‘E’ to stand for ‘Eligible’ as opposed to ‘Early’ since we will likely continue to practice in some capacity.
Appreciate all the bloggers and especially WCI for laying down this path!!
Great post. I am only a few years our of training but if I follow my plan will be FI in about 15 years. Hard to know this soon if I plan to retire early. I just want to make sure that door is open when I get there.
Drop it into MD,
You are very smart to think that way. I wish more would follow that path.
I guarantee that in 15 years you will be glad you followed that path. It is so good to have freedom and options at mid-late career.
I’m aiming for The Prudent. Which is pretty good considering it took me 4yrs to get into med school after college and addiction led to some less than wise financial and life choices before I got my head on straight. God willing I can stay on this path and not ever get back on the one I was heading down for a while.