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?
So many Legos, so little time.
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.
I can always brew more beer.
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.
School pool?
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.
Related: How To Be A Rockstar Freelancer
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.
Related: Recommend Allocation Of Stocks And Bonds By Age
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.
Related: To Get Rich, Practice Predicting The Future
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
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I sold my company when I was 62 as part of my retirement strategy. I could have walked away into the sunset but I wanted to be sure that the company succeeded. I stayed on and managed it for another few years. After decades of looking after employees, I wanted to do something that did not involve managing people.
My point is that going to the office for me was a choice. I enjoyed my business. Some people can just drop into a chair and watch TV all day, that’s not me. I need more. I started a blog and sell real estate to people who want to retire where they can afford it.
Many people can not stay retired. So when I hear they want to leave their career early, I wonder what they will do years later.
I’m 56. Operated my own biz for about 26 yrs now , I’m in a declining industry but have accumulated over 10mm. 98% of that has already been fully taxed so it’s free and clear of any further taxes. I agree with all your reasons to go ahead and pull the retirement trigger, although I have no children or spouse to factor in.
My biz is dying a slow death but still profitable. Guess I’m afraid to retire when it’s still making money. Would like to sell it but not really a market for it . Hope this doesn’t sound like a ridiculous post. I read anything I can on the subject as I’m hoping it will motivate me to take action. Best of luck to all.
Great post, I am also 40 but not a physician. I can’t wait to retire, perhaps within a few months. My wife suggested June 1st, just in time for the kids, and our, summer vacations. What can I say? I just worked extra years in between, instead of going to medical school, married a wife with a decent job who was also a saver and now stays at home, and after five years of doing this, I long to join her to lend her a hand. It’s not fair the majority of domestic duties fall on her while I sweat away in my air conditioned office daily.
I know I’m probably out of the norm on this one, but I feel like I simply can’t retire. Even if I had all the money in the world. I struggled mightily with depression for a decade until I started working in the industry I’m in now. I’m not sure I would say I love my jon, but I do like it a great deal and it gives me a strong sense of purpose. I tried everything to combat depression – therapy, medication, diet and exercise – you name it. Some of these things helped but not enough. I have found purpose through work. Maybe it’s just a grand distraction. But it is the distraction I need.
POF, I had to look up anesthesiologist to get a little glimpse and besides the high salary and that the highest-paid anesthesiologists work in Lewiston, Maine; Youngstown, Ohio; and Wilmington, Delaware, the below seem like pretty good reason to FIRE.
Stress Level High
Work environment and complexities of the job’s responsibilities
Flexibility Low
Alternative working schedule and work life balance
Also I’ll be honest my first thought was is he the guy/gal giving out laughing gas?!?! Personally I think Reasons Not to Retire Early as you said are some of the exact reasons to get away from the 9-5 as we don’t really know what the future beholds, why not put yourself in the best position that makes you feel comfortable and enjoy life, explore the world, and eradicate the high stress and low flexibility of your job.
You are in a position to be envied. Grab the bull by the horns and go for it. We get one shot at living an amazing, wonderful life. Go live it! Oh, and keep brewing. Life is even better with home brew!
Great post! It’s such a tough decision to give up your source of income, even if you are financially set. My wife and I aren’t quite there yet, but my wife just quit her job because we thought it would be better for our son.
My twin brother is currently in his residency for anesthesiology. He just wrote a guest post for my blog about his decision to go to medical school.
livefrugalee.com/how-to-quit-your-day-job-and-pursue-your-passion/
I took a different path of trying to earn as much income as I can with just a bachelor’s degree to try to reach financial independence by the time I’m 35 (in 2020). It’ll be interesting to see where we end up by the time we’re 40 and his income eclipses mine.
PoF, expanding why NOT to retire early, #7, not knowing what the future brings.
I don’t think you adequately addressed the real possibilities of:
1) hyperinflation. The 70’s were not that long ago.
2) How you will buy healthcare insurance, whose cost will probably continue to rise >10% each year.
3) In the 80’s, the smart investors were buying Japanese stocks. The Nikkei went down and still has not gone back up. Even though we have had some cycles of American stocks dropping then hitting new highs the past 20 years, we may have a prolonged bear market at some point. If you’re a healthy 40, your retirement may last 50 years or longer.
—BTW, this is the same Dr. Danny who argued in one of your columns that I don’t retire because then I would have too much time for engaging in self-destructive behavior (womanizing, drinking, gambling). Your comment was that I sounded like fun, maybe too much fun.
I remember that comment, Dr. Danny!
The best I can do to safeguard myself from any of the financial disasters that could befall us individually or as a nation is to oversave a bit. That’s ongoing, as I was financially independent before I started writing about FIRE.
By the time I anticipate checking out, I expect to have ~50% more than the recommended 25x and “retire” may not be the best word, since I will continue to write, and as Sam has shown us, blogging and books can be money makers.
Cheers!
-PoF
We found that when our children applied to college, it was wise to pursue several schools and see what kind of package the student would get. One son got an annual package that was $5000 better than at any other school. The competition was Cornell, Dartmouth, RPI, UMASS, UVA, UNC, Duke and WPI. Ambitious, huh? Got a great education at WPI. He was a Natl Honor Society student who played varsity basketball and cross country and took every advanced placement course he could fit on his schedule. Hired by a Global Leader in its manufacturing field, today his subordinates are plant managers and department heads. That great education at WPI was worth every penny.
Point is, if you have a son or daughter that is a great student, tell them to shoot high and wide and to hell with the application costs. It can change their life. My $.02
Good for him (and you)! Like your son, I turned down some excellent schools, including Duke, and attended my state university. It’s hard to turn down the alma mater of your father and grandfather when offered a full tuition scholarship. One of the best decisions, financially and otherwise, that I have made.
Cheers!
-PoF
Great one PoF. I would add a couple of things to consider, and want to address a few concerns other have in the comments.
1. Keep going to show kids some kind of work ethic: I completely disagree with this criticism. Kids are way smarter than we give them credit for. They don’t care if you are working or not, they want your time. By cutting back and looking to retire early I am teaching my kids about freedom, time and the real purpose of money. My kids get plenty examples of people that work way too hard for things that don’t make them happy. Ii am teaching them something different.
2. There is a physician shortage and by quitting you make things worse: Maybe, but this is a good thing. The more people that drop out of crappy soul crushing jobs the better. Supply and demand force changes in the marketplace. When doctors are in demand they have more control. When they have control they can shape the job to be sustainable. When this happens we end up with a healthier supply of docs in the long run.
3. Ego. Medicine is different than many other careers. It is more difficult to separate the job from the person. Many of us never really stop being a physician even after the workday is over. For many retiring early is tough on their ego and identity. This is probably the most important reason I can think of actually. From reading your blog for over a year now I know this will not be a problem for you, but others may have difficulty. I think my decision to go part time was in part an attempt to give my ego more time to adjust.
Appropriate name . Wisdom to match.
Excellent rebuttals, HP.
I believe there is some value to my kids at least remembering that I had to work some when they were young, but you are correct that an early retirement will give a Dad far more time to teach them about how the world works and the things that matter most.
And I won’t feel guilty about contributing to a doctor shortage. As you say, take away onerous requirements, institute some real tort reform, and you may see more doctors wanting to work full length careers. Docs opting out of the workforce is a symptom of underlying problems.
Best,
-PoF
Plus, I always think, I’ve been in do-gooder professions my whole life. And I’m going to stay in them for as long as I can. And when its no longer viable for me or my family, I’m done. You’ve put in your time serving in medicine–some people who could be doctors, never become them. One rarely asks an accountant if he’s wasting his life because he didn’t become a doc. Do good where you can, when you can, then do some other kind of good.
Reason #9: if you retire who’s gonna move the damn table up and down?
Try to think of other people here for once
Just kidding. I feel the same way you do. Especially being tied to the pager. I’m 2.5 years from retirement accounts vesting and then I have a couple of considerations:
1. Do I want to provide for possible graduate/professional school in addition to undergrad for my kids.
2. How is healthcare going to settle out once the ACA is delt with.
3. Is my wife willing to go back to work even part time if I retire (HA! Ha! Ha!!!!! I can dream can’t I?)
I have a feeling I’ll have “one more year syndrome” for several years but I’m hoping in 2.5 years when I “could” retire the idea of working will be less painful knowing I could walk away if I wanted. It’s just sometimes I want to smash my pager into a little pile of dust.
As a voice-activated table mover, I take great offense!
Great considerations, too. I’m 16 months from being fully vested, but it’s just an excuse. In June, I’ll be 75% vested in the employer contributions to my 401(k). Working another year to get to 100% garners me another $10,000 or so in the 401(k). The real meat is the $200,000+ that I’ll save for retirement in that one more year.
1. I would like my boys to have some skin in the game. Work hard, earn scholarships, go to public schools, and there just might be $$$ left for grad school.
2. Your guess is as good as mine. That extra $200,000 might come in handy.
3. My wife “retired” at 26. She’s worked harder than me ever since.
Cheers!
-PoF
Pof;
Hi there!! I’d say go for it… Why do we work? Essentially to have money,right?
If you have the money to retire–enjoy your life. That’s what I plan to do when my kids are all in college. Retire when I’m 50. 5 more years!!!!
Go for it,doc!!! Like they say,life is short–enjoy it while you can.