Since writing, The Dark Side Of Early Retirement, I’ve sometimes wondered whether writing about early retirement hurts society and the very people who decide to leave the work force early. Being able to do what you want when you want sounds great. But is it healthy?
Imagine going to medical school until age 30, paying all that tuition, and then deciding you want to retire 12 years later. Is that nuts? Or does it not matter if you’ve earned enough to comfortably cover all your expenses for decades? Here’s a guest post from an actual doctor who wants to call it quits. Perhaps if he’s allowed to retire early, so can we all! – Sam
Hello, fellow samurai! I am the Physician on FIRE, a 41-year old anesthesiologist with an 11-year career under my belt. A couple years ago, I realized that early retirement was a distinct possibility for my family and me, and I’ve been trying to talk myself out of it ever since. I’ve had zero luck thus far.
It’s not that I don’t have a good job. In many ways, it’s great, actually. I do work some crazy hours, but I’m rewarded with ample time off. The job can be stressful, but I’m compensated quite well. Among the jobs with six-figure salaries, being a physician is rather highly esteemed. Indeed, there are several aspects of this job that I will miss if I follow through with plans to retire early.
Currently, I’m sitting on a nest egg equal to nearly 30x our typical annual spending of $60,000 to $70,000 in a low cost of living area. Add in the cost of health insurance and we might have closer to 26x or 27x, but barring a market meltdown, I’m on track to have about 36x in 18 months, an amount that will qualify us to be financially free.
These are the goal numbers I’d like to achieve or at least be rapidly approaching prior to walking away from my full time job:
- $1,500,000 between a taxable account and 457(b)
- $1,000,000 between Roth IRAs and 401(k)
- $250,000 in our Donor Advised Fund
- $200,000 between two 529 Plans
If we were to sell both our primary and second home, we’d just about be there today, but then we’d have no place to live. The most likely scenario I foresee is selling our primary home, keeping our second home as a base, and doing some extensive traveling as a family. We have dreams of touring the nation in a motorhome, living a true Spanish immersion experience in a foreign land, and perhaps doing some globetrotting before our boys are of high school age.
Why would a physician want to retire early? I can’t speak for all of us, but an extensive survey from 2012 indicated that over 60% of physicians would retire today if they had the means. I’ve expounded on my rationale, which include more time for family, sleep, pursuing interests outside of medicine, and perhaps most importantly) simply because I can.
But that doesn’t mean I should. Let’s see if I can talk myself out of this.
Reasons Not to Retire Early
I can come up with all kinds of reasons not to retire early. This should be easy!
- You’re so young.
- You’ll be bored.
- You’re in the prime of your career.
- You’re tied to your boys’ school schedule.
- You could work part-time or occasionally.
- You could work in an outpatient surgery center.
- Your stock market holdings could plummet.
- You don’t know what the future will bring.
Reason #1: You’re so young.
Why, thank you, that’s very kind of you to say. The mylar balloons I received on my 40th birthday disagree, but I do feel young at 41. I could work another 20 to 25 years before reaching a more standard retirement age.
Isn’t youth a great reason to retire (if you can afford it)? I’ve got my health, and will have more time to exercise and prepare healthy meals if I’m not working, perhaps increasing the number of healthy years in my future. My boys are home with us for another 10 to 12 years. Wouldn’t it be nice to stop missing family dinners and boys’ activities due to work, and have my weekends free to play?
As a doctor, I see all sorts of ailments and injuries that can dramatically alter one’s lifestyle and longevity. By retiring young, I give myself a much higher likelihood of enjoying many good years before the effects of aging slow me down or I am struck by cancer or car, or whatever it is that will eventually strike me down. Sorry, but reason #1 is rejected.
Reason #2: You’ll be bored.
I’m not particularly good at sitting still, and boredom is pretty much a foreign concept. My wife is convinced that I invent things that need to be done; when the list grows short, I come up with new ideas to ensure I’ve always got something to work on.
One day when I was daydreaming about early retirement, I came up with a list of 50 things I’d like to do as an early retiree. I’ll probably come up with 50 more when I actually have the time. So, no, I can’t imagine I’ll be bored. What were those other reasons?
Reason #3: You’re in the prime of your career.
Well, that’s a fact. I’ve been out of residency training for more than a decade; I have some valuable experience. Some would say that I’m making a real contribution to society. I don’t quite see it that way – it’s more of an exchange with society. I deliver safe, high-quality anesthesia care in exchange for money. It’s more of a transaction than a contribution. Society pays me quite well.
Isn’t that another reason not to retire? The pay? Well, here’s the thing. I reached financial independence based on our current spending about a year and a half ago, and I plan on working about another year and a half. I’m pursuing financial freedom, but I’m essentially trading time for money I don’t need at this point.
Maybe you don’t need the money, but you could help so many others, right? True. This is a good argument for working 52 80-hour workweeks every year for another forty years. I’m satisfying the “help others” urge by adding to our donor advised funds while working. When I retire, the balance in those accounts should be about 10% or our retirement assets. Reason #3 has been soundly rejected.
Reason #4: You’re tied to your boys’ school schedule.
Our boys are enrolled in public schools, and they only get a few weeks off during the school year. When co-workers have kids in school, there is competition for those weeks off. Looking at the school calendar, there are are 16-plus weeks off over the course of the year. In early retirement, I’ll have all those weeks off, too!
There are, of course, alternatives to being tied to a school calendar. The current plan for when I break free is to take a motorhome tour of the U.S. while “road-schooling” our boys for the year. We can learn science in the National Parks. American history can be covered on the sites the settlements were founded. We can learn about wars fought on our soil right where the battles occurred. Physical education and recess can be combined in a hike up a small mountain or a jog through the forest.
My wife recently obtained a substitute teacher’s license, and has been teaching in our boys’ elementary school. With her experience and connections, and a world of online resources, we should have no trouble coming up with a curriculum for the boys, who will be in 3rd and 4th grade when we anticipate beginning our first adventure as early retirees. I’m not the least bit worried about a school schedule. What else you got?
Reason #5: You could work part-time or occasionally.
Yes, I could. But again, I’d be working for money I don’t think I need, and doing so would prevent us from being able to take that awesome motorhome tour I just outlined.
I will admit to contemplating both possibilities, though, and I’ve examined the monetary and lifestyle ramifications of both a half-time schedule and one in which I only work a week a month. I keep coming back to the fact that I’d rather work one more year (which I’m currently doing) than two or more years part time.
If motorhome life gets me down, and I yearn for the days of sticking long, sharp needles into people again, I may consider a part time job. Don’t count on it.
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Reason #6: You could work in an outpatient surgery center.
This thought comes from the idea that if you don’t love your job, change your job. The worst aspect of my current job is living life tethered to a pager, which is how I spend 20% of my days and nights. I am at the beck and call of every surgeon, nurse, ER doc, and laboring mom-to-be in the hospital. I must remain available at short notice for stretches ranging from 24-hours on a weekday, 72 hours on a normal weekend, and up to 120 hours over a long holiday weekend.
Working in an outpatient surgery center eliminates the burden of call. Outstanding! I actually work in a surgery center as part of my current job. While there are fewer surprises and no pager call, the days can still be challenging. The volume of work can be substantial, and I’m often expected to be in two or three places at once. In general, though, I tend to enjoy my surgery center workdays more than the hospital shifts.
If I do feel a need to earn more money (I shouldn’t), I would definitely consider an outpatient position, perhaps on a part time basis. I wouldn’t consider this a reason not to retire, but rather a reasonable backup plan.
Reason #7: Your stock market holdings could plummet.
The sky could fall! The sky could fall! Yes, and it probably will to some extent. I’ve had money invested when we’ve seen stocks lose 40% to 50% of their value twice in the last twenty years. I “stayed the course” both times and here we are near record highs in major indices.
Risk can be mitigated with a diverse portfolio, and Sam has many excellent articles on the topic.
By overshooting our monetary target, I anticipate having an initial withdrawal rate under 3%. We’ll have ample room to scale back spending if necessary, but the odds of such a need with an exceptionally low withdrawal rate is terrifically unlikely.
Reason #8: You don’t know what the future will bring.
Could you be any less specific? I suppose we’re talking about a financial catastrophe that has nothing to do with the stock market. A lawsuit or loss that insurance doesn’t cover, for example. Or maybe something more insidious, like lifestyle creep or a newfound penchant for ultra-fine dining and multimillion dollar homes.
If any of these unlikely scenarios develop, I could consider going back to work to cover the expense. If too much time has passed, it could be difficult to get back into medicine, but I do have marketable skills and will always carry the M.D. behind my name. Consulting jobs exist; sales jobs in medicine can be lucrative. I’ve learned that I rather enjoy writing, and if push came to shove, I’ll bet I could find a way to earn money with this QWERTY keyboard.
The uncertainty of the future only serves to affirm my decision to retire early. I don’t know what lies ahead, so I had best take full advantage of the upcoming years while I have my youth, my health, and my family living with me.
I rest my case.
Having rejected eight pretty good reasons not to retire early, I seem to be running out of excuses. I’m on target to wrap up my full time job in the summer of 2018 (when I’m fully vested in employer contributions to my 401(k)).
I think I’ll be ready to pull the trigger unless you can convince me otherwise. Hit me with your best shot. Still think I shouldn’t retire early?
– Physician On FIRE