Physician Retirement Savings

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staythecourse
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Re: Physician Retirement Savings

Post by staythecourse » Tue Mar 07, 2017 4:34 pm

goodenyou wrote:Most physicians I know will agree that they are trying to achieve financial independence from a profession that is broken. The changes in healthcare, the costs of education and the overall attitude of the public about healthcare has soured many physicians on the profession. When you are financially independent, changes to the system may bother you less because you have the ability to quit anytime. Staring down $300-400k worth of loans as a young person just starting out in a system that is broken is an entirely different reality. Many older docs are running out the clock and taking pay cuts for not participating in many of the Medicare regs. They would rather take a pay cut than deal with the aggravation because they can afford to take a pay cut.
Not sure if I agree. If they really hated it that much they would just retire early/ find a nonclinical job IF they had so much stashed away working doesn't matter. Actually, I would say if that was true you would see A LOT more vocalization from physicians against the "system". What fear would there be then if one is FI already. You definetly don't see that. Or if you are set financially why not see more docs go on their own alone or with others to start practicing how they want. If it didn't work out the worst is you retire. No bid deal there.

SO (a big SO) if they are expecting to work for a LONG TIME no matter on their wealth accumulation or hitting their number then why don't they do a better job of achieving a better work/ life balance earlier in their career instead of just trying to bulldoze their way to an end result where they just keep working for the same system they complain about?

I am not a mental health expert, but assume one would probably advocate cutting down on hours and working less to spend more time on yourself if you are trully stressed at work. I can't see anyone saying it is healthy to just try to bulldoze through it.

All I can say on the matter is if doctors true goal of amassing hugh wealth is to get out of medicine then why don't we so more doing it. Even on this thread you have MANY who have the $$$, but openly admit, "Well I see cutting back to 50%" for example. Those 2 don't go together.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

J_Markov
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Re: Physician Retirement Savings

Post by J_Markov » Tue Mar 07, 2017 4:46 pm

bostondan wrote:Seeing all these posts about high salaries makes me want to leave Boston! I'll be a cardiologist in a few years. If I were to stay in the actual city of Boston, my colleagues are receiving job offers for full-time cardiology positions starting as low as $120k. I've heard you can negotiate up to $160k. They expect that you do some research. I think you can add to your salary that way, but I'm not a big researcher, so I actually don't know.

If you go out to the community, I've heard you can make more, but not a ton more. I've got a colleague who couldn't find an offer for more than $250k as an interventional cardiologist in the area surrounding Boston. He ultimately took a job out in Arizona making $600k first year out, expecting make more within a few years. One person got an offer for an insanely busy practice making $400k near Boston. It sounded like a horrendous job other than the salary.

I currently work in a major academic center (one of those institutions that I should feel "privileged" to work at :annoyed ). Most of my physician colleagues are not spending excessively and many have high debt burden still. If anything, most of my colleagues are frugal and drive 7+ year old cars. They often comment that my relatively new Honda Civic seems fancy.

I know if you go out to the community and find private practice doctors in procedural specialties that they are often driving fancy cars and spending a lot, but in practice that's not what I see.

Age: 31
NW: ~$750k without inheritance (I did freelance web development pre-residency and did reasonably well). $3.5 million with inheritance :(
I'd say the 'astronomical' salaries you're seeing on this board are not happening on large metro areas in the NE or west coast. There's such a broad range of salaries across the board. As you said, a cardiologist in Boston may earn 1/4th of what a cardiologist would earn in other areas such as a small city in the midwest. The same applies to many other specialties. I think someone posted a 400k salary for an internist. That's nowhere near what an internist would make in cities like NYC, Boston, etc... I feel those medscape surveys probably reflect more the salaries in the big cities.

goldendad
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Re: Physician Retirement Savings

Post by goldendad » Tue Mar 07, 2017 5:49 pm

I am not a MD but am in the income bracket mentioned. My wife and I are both savers and live on far less than I make. We plan to retire in a few months, have about 58x anticipated yearly expenses. We are in our early 60s and are debt free.

staythecourse
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Re: Physician Retirement Savings

Post by staythecourse » Tue Mar 07, 2017 5:49 pm

For the above poster,

The biggest parody of making money in medicine is the places that may a ton are the place having a ton of cash is not helpful. After you build/ buy a dream home and a couple fancy cars what else are you going to do with the extra wad of cash? To make that money no matter what you are working inflexible hours/ schedule so it isn't like you can just go, "Hey I have more then enough I just want to work 3 days a week so I can start spending my wad of cash". Your employer doesn't make money on you that way.

In contrast, the places that are desirable, i.e. major metro areas are the areas you could do infinite amount with tons of money, but these are areas that pay the least so you don't make that much.

In the end you will have to decide if you want to make A TON just to make it or make less and enjoy the ammenities of larger cities. Don't know other fields of life, but can say medicine and their jobs do NOT pay according to cost of living and actually is INVERSE. They pay based on simple supply/ demand economics.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Incendiary
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Re: Physician Retirement Savings

Post by Incendiary » Tue Mar 07, 2017 6:34 pm

I'm planning on working until I'm in my 70s because I feel an obligation to do so.

My goal is $200,000 annual withdrawals (pre-tax). At a 3% SWR, I want to have about $6,666,667 in my investment accounts in today's dollars.

I see people making more than I make and looking to have less than I want as an FI number. Interesting. :confused

beezquimby
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Re: Physician Retirement Savings

Post by beezquimby » Tue Mar 07, 2017 6:53 pm

Incendiary wrote:I'm planning on working until I'm in my 70s because I feel an obligation to do so.
:shock:

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JDCarpenter
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Re: Physician Retirement Savings

Post by JDCarpenter » Tue Mar 07, 2017 6:54 pm

Incendiary wrote:...

I see people making more than I make and looking to have less than I want as an FI number. Interesting. :confused
We undoubtedly make more than some people who have a lower FI number. Since we became empty nesters, taxes are more than 50% of our spending despite having no state income tax--and we save more than we pay in taxes. Thus, even with stepping spending up, our FI number is low compared to our AGI--and especially compared to what our true income is before tax-deferred accounts are funded.
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livesoft
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Re: Physician Retirement Savings

Post by livesoft » Tue Mar 07, 2017 7:13 pm

Incendiary wrote:I'm planning on working until I'm in my 70s because I feel an obligation to do so.

My goal is $200,000 annual withdrawals (pre-tax). At a 3% SWR, I want to have about $6,666,667 in my investment accounts in today's dollars.

I see people making more than I make and looking to have less than I want as an FI number. Interesting. :confused
OK, I see people making more than I ever made and looking to have less than what we have now in our accounts.
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staythecourse
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Re: Physician Retirement Savings

Post by staythecourse » Tue Mar 07, 2017 11:17 pm

Incendiary wrote:I'm planning on working until I'm in my 70s because I feel an obligation to do so.

My goal is $200,000 annual withdrawals (pre-tax). At a 3% SWR, I want to have about $6,666,667 in my investment accounts in today's dollars.

I see people making more than I make and looking to have less than I want as an FI number. Interesting. :confused
Okay right when I start understanding some folk mentality then a post like this comes up that makes NO sense. So you want to have 6+ millinon in your 70's for what reason? Do you think you are going to live to 100? That is unlikely to happen so you will be working into your 70's presumably to save money for someone or something else. I am assuming you have a plan for the left over money?

BTW, if you are not spending that much now (minus taxes, house payments, and child stuff) then do you really think you are going to ratchet up the buying in your 70's? Just curious if you or anyone else for that matter has EVER heard of someone doing that? My guess is no and its called neuroplasticity. Folks get set in their ways and new behaviors don't just start.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Incendiary
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Re: Physician Retirement Savings

Post by Incendiary » Tue Mar 07, 2017 11:22 pm

I expect to live until I'm 100, I expect I'll spend that much a year, and it would be nice to have money leftover to pass on.

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ram
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Re: Physician Retirement Savings

Post by ram » Wed Mar 08, 2017 1:12 am

I know a physician who is happy to work in California "after" she worked and saved for many years in a rural mid west practice. Her current salary does not support her current lifestyle. Her prior savings and current salary adequately support her lifestyle.
Ram

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Artsdoctor
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Re: Physician Retirement Savings

Post by Artsdoctor » Wed Mar 08, 2017 9:48 am

staythecourse wrote:For the above poster,

The biggest parody of making money in medicine is the places that may a ton are the place having a ton of cash is not helpful. After you build/ buy a dream home and a couple fancy cars what else are you going to do with the extra wad of cash? To make that money no matter what you are working inflexible hours/ schedule so it isn't like you can just go, "Hey I have more then enough I just want to work 3 days a week so I can start spending my wad of cash". Your employer doesn't make money on you that way.

In contrast, the places that are desirable, i.e. major metro areas are the areas you could do infinite amount with tons of money, but these are areas that pay the least so you don't make that much.

In the end you will have to decide if you want to make A TON just to make it or make less and enjoy the ammenities of larger cities. Don't know other fields of life, but can say medicine and their jobs do NOT pay according to cost of living and actually is INVERSE. They pay based on simple supply/ demand economics.

Good luck.
This is actually true. We've been in Southern California for over 20 years and have had no problem making a very good living and supporting a very enjoyable lifestyle. However, when you take a look at inflation-adjusted salaries, at least for us, we peaked over 10 years ago. For as long as we've lived out here, there have always been challenges recruiting doctors from lower cost of living areas. It's not at all unusual to have someone come out, look at real estate and school costs, and then go back to where they came. The only reasonable explanation I can think of is an old-fashioned supply and demand phenomenon. Furthermore, those finishing training here work for a few years and then move to those lower cost of living areas because they can't get ahead as easily they should.

This is the paradox that has been in play for as long as I can remember. At the end of the day, this paradox forces you to really prioritize what's most important to you, which is not necessarily a bad thing.

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goodenyou
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Re: Physician Retirement Savings

Post by goodenyou » Wed Mar 08, 2017 4:04 pm

ram wrote:I know a physician who is happy to work in California "after" she worked and saved for many years in a rural mid west practice. Her current salary does not support her current lifestyle. Her prior savings and current salary adequately support her lifestyle.
After working in Texas for many years, a close friend who is a cardiologist moved to Southern California and took a 60% pay cut. He is happy living in a beautiful place. However, he is finding it near impossible to recruit. The only interested cardiologists would be someone who has saved a lot of money to buy a house and is not in an accumulation phase of their life. Someone who has been in practice for years already. They are hard to find. He recently lost a potential candidate who would have had to take a 75% pay cut. They opted to work a few more years in Kansas and retire completely from medicine (in California) with a larger nest egg.
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PhysicianOnFIRE
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Re: Physician Retirement Savings

Post by PhysicianOnFIRE » Wed Mar 08, 2017 5:25 pm

staythecourse wrote:Don't know other fields of life, but can say medicine and their jobs do NOT pay according to cost of living and actually is INVERSE. They pay based on simple supply/ demand economics.

Good luck.
Indeed. It's called geographic arbitrage, and I'm taking full advantage. It helps a lot that I grew up in a small Midwestern town, and that's where I want to be. Unlike most fields, in medicine, the highest paying jobs are in the lowest cost of living areas.

Also, I've updated my goals since first responding to this post. These are my goals prior to retiring from clinical medicine (anesthesia):

$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


:beer
-PoF

ks289
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Re: Physician Retirement Savings

Post by ks289 » Thu Mar 09, 2017 4:43 am

PhysicianOnFIRE wrote:
staythecourse wrote:Don't know other fields of life, but can say medicine and their jobs do NOT pay according to cost of living and actually is INVERSE. They pay based on simple supply/ demand economics.

Good luck.
Indeed. It's called geographic arbitrage, and I'm taking full advantage. It helps a lot that I grew up in a small Midwestern town, and that's where I want to be. Unlike most fields, in medicine, the highest paying jobs are in the lowest cost of living areas.

Also, I've updated my goals since first responding to this post. These are my goals prior to retiring from clinical medicine (anesthesia):

$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


:beer
-PoF
Great blog and nice post.
Regarding geographic arbitrage, most salary comparisons between urban vs rural and between geographic regions do not break down the data to account for differences in distribution of practice types which exist. Particularly in procedural specialties where there is potentially a very large gap between pay in academic position vs single specialty private practice, you are seeing the salary numbers for urban and more urbanized geographic regions (northeast) skewed downward because of the higher percentage of academic jobs there.
I agree that other variables are putting downward pressure on salaries in urban and densely populated regions (higher costs for running practice, more competition/lower patient load, etc), but I haven't seen much data that nails down differences in payer mix or fee schedules/physician payments by geography, which determine the bulk of revenues for private practice.
My feeling is that geography clearly impacts your costs, but not (historically at least) necessarily your top line revenues if you have weak competition/sufficient patient load and good payer mix.

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PhysicianOnFIRE
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Re: Physician Retirement Savings

Post by PhysicianOnFIRE » Thu Mar 09, 2017 9:33 am

ks289 wrote:[quote="PhysicianOnFIRE]
Great blog and nice post.
Regarding geographic arbitrage, most salary comparisons between urban vs rural and between geographic regions do not break down the data to account for differences in distribution of practice types which exist. Particularly in procedural specialties where there is potentially a very large gap between pay in academic position vs single specialty private practice, you are seeing the salary numbers for urban and more urbanized geographic regions (northeast) skewed downward because of the higher percentage of academic jobs there.
I agree that other variables are putting downward pressure on salaries in urban and densely populated regions (higher costs for running practice, more competition/lower patient load, etc), but I haven't seen much data that nails down differences in payer mix or fee schedules/physician payments by geography, which determine the bulk of revenues for private practice.
My feeling is that geography clearly impacts your costs, but not (historically at least) necessarily your top line revenues if you have weak competition/sufficient patient load and good payer mix.
[/quote]

The cost of living differential can be huge, and I think there is something to the difference in average pay varying by location, with higher pay in the Heartland.

Within a region, state, or city, there can still be wide variation, of course. I'm an employed physician in a rural area. I'm paid well, but I know docs in the suburbs earning > 50% more than me. But I'm paid 50% more than some docs I know out west in similar jobs.

:beer
-PoF

J_Markov
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Re: Physician Retirement Savings

Post by J_Markov » Thu Mar 09, 2017 9:37 am

ks289 wrote:
PhysicianOnFIRE wrote:
staythecourse wrote:
:beer
-PoF
Great blog and nice post.
Regarding geographic arbitrage, most salary comparisons between urban vs rural and between geographic regions do not break down the data to account for differences in distribution of practice types which exist. Particularly in procedural specialties where there is potentially a very large gap between pay in academic position vs single specialty private practice, you are seeing the salary numbers for urban and more urbanized geographic regions (northeast) skewed downward because of the higher percentage of academic jobs there.
I agree that other variables are putting downward pressure on salaries in urban and densely populated regions (higher costs for running practice, more competition/lower patient load, etc), but I haven't seen much data that nails down differences in payer mix or fee schedules/physician payments by geography, which determine the bulk of revenues for private practice.
My feeling is that geography clearly impacts your costs, but not (historically at least) necessarily your top line revenues if you have weak competition/sufficient patient load and good payer mix.
The key is competition and supply and demand. Large metropolitan areas in desirable regions tend to be dominated by large academic centers and/or large hospital groups which tend to employ physicians. Add to this that there is usually high competition for these jobs given that many people want to live in these locales. All of these factors drive compensation down.

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gasdoc
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Re: Physician Retirement Savings

Post by gasdoc » Thu Mar 09, 2017 10:01 am

J_Markov wrote:
ks289 wrote:
PhysicianOnFIRE wrote:
staythecourse wrote:
:beer
-PoF
Great blog and nice post.
Regarding geographic arbitrage, most salary comparisons between urban vs rural and between geographic regions do not break down the data to account for differences in distribution of practice types which exist. Particularly in procedural specialties where there is potentially a very large gap between pay in academic position vs single specialty private practice, you are seeing the salary numbers for urban and more urbanized geographic regions (northeast) skewed downward because of the higher percentage of academic jobs there.
I agree that other variables are putting downward pressure on salaries in urban and densely populated regions (higher costs for running practice, more competition/lower patient load, etc), but I haven't seen much data that nails down differences in payer mix or fee schedules/physician payments by geography, which determine the bulk of revenues for private practice.
My feeling is that geography clearly impacts your costs, but not (historically at least) necessarily your top line revenues if you have weak competition/sufficient patient load and good payer mix.
The key is competition and supply and demand. Large metropolitan areas in desirable regions tend to be dominated by large academic centers and/or large hospital groups which tend to employ physicians. Add to this that there is usually high competition for these jobs given that many people want to live in these locales. All of these factors drive compensation down.
+1. Add further to this that those academic centers, besides employing physicians at lower wages, have residency programs that provide a "pipeline" of new, younger docs to the immediate area, because these new, younger docs tend to want to stay in the more urban environment. This also tends to push down the average salaries in the bigger cities. An exception to that might be in a partnership situation where the group partners tend to have higher salaries by taking advantage of the "pipeline" of new docs willing to work at lower than average wages.

gasdoc

kmurp
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Re: Physician Retirement Savings

Post by kmurp » Thu Mar 09, 2017 10:39 am

Honestly, when I started out, I had no idea of what my $ goal should be. I was unaware of any calculator that would figure that out based on my then income. As an aside I have never come close in inflation adjusted income to many of the people posting here and as my income is higher over the past five years than previous, wouldn't know which income level to base this calculation off of. My only "goal" was to be able to retire or cut back at 59 1/2. You can guess why I arbitrarily picked that figure many years ago. I'm exactly that age now and will not make it. Expenses just went way down as my last tuition payment was made yesterday. I'll spend the next year tracking expenses to try to figure out my yearly need and go from there.

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JDCarpenter
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Re: Physician Retirement Savings

Post by JDCarpenter » Thu Mar 09, 2017 11:44 am

kmurp wrote:... My only "goal" was to be able to retire or cut back at 59 1/2. You can guess why I arbitrarily picked that figure many years ago. I'm exactly that age now and will not make it. Expenses just went way down as my last tuition payment was made yesterday. I'll spend the next year tracking expenses to try to figure out my yearly need and go from there.
Kids exiting the nest was huge for us; all those payments going into after-tax savings will have an amazing impact. Good luck on getting handle on expenses--covering a multiple of that, rather than saving a certain multiple of income, is the key.
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goodenyou
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Re: Physician Retirement Savings

Post by goodenyou » Thu Mar 09, 2017 12:35 pm

PhysicianOnFIRE wrote:
ks289 wrote:[quote="PhysicianOnFIRE]
Great blog and nice post.
Regarding geographic arbitrage, most salary comparisons between urban vs rural and between geographic regions do not break down the data to account for differences in distribution of practice types which exist. Particularly in procedural specialties where there is potentially a very large gap between pay in academic position vs single specialty private practice, you are seeing the salary numbers for urban and more urbanized geographic regions (northeast) skewed downward because of the higher percentage of academic jobs there.
I agree that other variables are putting downward pressure on salaries in urban and densely populated regions (higher costs for running practice, more competition/lower patient load, etc), but I haven't seen much data that nails down differences in payer mix or fee schedules/physician payments by geography, which determine the bulk of revenues for private practice.
My feeling is that geography clearly impacts your costs, but not (historically at least) necessarily your top line revenues if you have weak competition/sufficient patient load and good payer mix.
The cost of living differential can be huge, and I think there is something to the difference in average pay varying by location, with higher pay in the Heartland.

Within a region, state, or city, there can still be wide variation, of course. I'm an employed physician in a rural area. I'm paid well, but I know docs in the suburbs earning > 50% more than me. But I'm paid 50% more than some docs I know out west in similar jobs.

:beer
-PoF[/quote][/quote][/quote][/quote][/quote][/quote][/quote][/quote][/quote]

The ability to earn more and amass more in LCOL (aka "undesirable") is multifaceted. The ratio of physicians to population is more favorable, so you get the opportunity to see more patients. The cost of living and the cost of doing business is less. The other is that the opportunity to spend more in a LCOL area is less. The jobs labeled "A Sportsman's Paradise" that need aggressive recruiters to fill are often a paradise for those who desire early retirement or early financial independence. Been there and done it.
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Re: Physician Retirement Savings

Post by lthenderson » Thu Mar 09, 2017 12:52 pm

gasdoc wrote:Add further to this that those academic centers, besides employing physicians at lower wages, have residency programs that provide a "pipeline" of new, younger docs to the immediate area, because these new, younger docs tend to want to stay in the more urban environment. This also tends to push down the average salaries in the bigger cities. An exception to that might be in a partnership situation where the group partners tend to have higher salaries by taking advantage of the "pipeline" of new docs willing to work at lower than average wages.

gasdoc
My wife experienced this with her residency class. All of them wanted to stay in urban areas and probably averaged earning around 25%/year less than my wife who chose to practice and live out in the boonies. My wife's classmates had to compete against others for available slots. My wife walked into the nearest four hospitals here in the boonies and all practically threw themselves at her feet trying to get her to choose their hospital. The one she accepted a position at still has another open position that they still haven't filled for the last decade. By the time they finally find someone who wants to work there, they have two others who are wanting to retire.

PhysDoc
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Re: Physician Retirement Savings

Post by PhysDoc » Sat Apr 29, 2017 6:35 am

Age 46
Current Retirement Savings $2.33M
Net worth $4.03M
Two rental properties in a major city plus primary residence

A soft goal of $8M in retirement accounts in addition to continuing to accrue rental properties.

Being productive, continuing to help utilizing the skills society has entrusted us with, maintaining vigor are all reasons I could never imagine retiring. One of the great things about EM as a speciality, is, that despite reaching the one percent, we continue to care for people from all walks of life. Touching the feet of a homeless person is not beneath us and we hopefully treat all with respect and dignity.

We have a family friend in his 90's. He used to run a private practice 6.5 days-a-week. He "retired" at age 75 to a full time job at the VA. He got an award his first year for most productive physician. Now he really did retire and is volunteering caring for the underserved. He's the most youthful person I know.

His family set up a foundation. They meet every summer to discuss how best to disperse the foundation's funds. There are plenty of productive things to do once retirement goals are met.

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Re: Physician Retirement Savings

Post by llessac15 » Fri May 05, 2017 11:18 pm

OP here. The post has turned out to be more than I would have ever thought. I have enjoyed reading most of the posts.

People have asked a few times now if I will change anything based on the answers I have received. I will say that this post has made me realize that my income is very high, but my current savings aren't up to snuff compared to other Bogle-docs. I personally find NW to be meaningless. Factoring my mortgage into my retirement readiness equation just screws things up. I care more about cash flow which I view as 3% of my total savings. Until this 3% represents my annual needs, I'm going to continue slaving away. Thinking in terms of NW doesn't really give me any kind of financial picture that I find helpful. If I have a paid off $5 million dollar home that I'm not willing to sell because it's sentimental to my wife, well it will surely jack up my net worth significantly. However, it doesn't help me one bit with covering my retirement expenses.

I have about 13 more years (will be 50 y/o) of busting my rear until I plan to cut back to part time. I'll then plan to cut back to part time to make just enough to cover expenses and let my retire accounts grow without worrying with contributions. I'll likely call it quits completely when my final kid is done with college (like 57 y/o). My goal is to have about $5-$8 million in he bank. NOT net worth!

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Re: Physician Retirement Savings

Post by PhysDoc » Thu May 11, 2017 7:18 pm

llessac15 wrote:OP here. The post has turned out to be more than I would have ever thought. I have enjoyed reading most of the posts.

People have asked a few times now if I will change anything based on the answers I have received. I will say that this post has made me realize that my income is very high, but my current savings aren't up to snuff compared to other Bogle-docs. I personally find NW to be meaningless. Factoring my mortgage into my retirement readiness equation just screws things up. I care more about cash flow which I view as 3% of my total savings. Until this 3% represents my annual needs, I'm going to continue slaving away. Thinking in terms of NW doesn't really give me any kind of financial picture that I find helpful. If I have a paid off $5 million dollar home that I'm not willing to sell because it's sentimental to my wife, well it will surely jack up my net worth significantly. However, it doesn't help me one bit with covering my retirement expenses.

I have about 13 more years (will be 50 y/o) of busting my rear until I plan to cut back to part time. I'll then plan to cut back to part time to make just enough to cover expenses and let my retire accounts grow without worrying with contributions. I'll likely call it quits completely when my final kid is done with college (like 57 y/o). My goal is to have about $5-$8 million in he bank. NOT net worth!
Exactly. Though the $5M residence is always sellable if needed.

Better to have a more modest $1M house and $4M in rentable property with an 8-12% cap rate. This provides diversification from the stock-based retirement accounts.

If your spouse is willing to manage that real estate and can document more than 750 hours per year at it, now they are a real estate professional and any losses - including all
that mortgage interest, depreciation on the structures, and other expenses - are directly deductible against your active income as a physician.

Thanks for prompting this column. It's been extremely interesting.

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Re: Physician Retirement Savings

Post by Ella » Sun May 14, 2017 3:27 pm

Three days late and XX dollars short, but...

Age: 43
Salary: Lower-middle range of 400-800K
Savings rate: 50% of gross income
Amount saved: 2.7M
Goal: was 4M, now in flux

I did not get to 50% savings rate until 2 years ago, despite being a more intentional saver than most of the people I know. Quicken has done wonders to help me truly see my income and expenses, adjust my spending, and maximize my savings.

My COL tradeoffs are in the realms of housing, car, and kids. Tiny home, crappy old car, no kids. Totally OK with all 3. I do spend quite a bit on travel and giving.

My job has become tremendously more stressful in the past 2 years, with significant health and QOL effects. I haven't been able to re-jigger to a better balance. My goal now is to quit in 1.5 years, which will likely require part time locums and/or cutting expenses further. This is 2-3 years earlier than I had previously planned. Hence my goal savings is in flux.

Ella

Mrxyz
Posts: 570
Joined: Wed Feb 29, 2012 6:12 am

Re: Physician Retirement Savings

Post by Mrxyz » Sun May 14, 2017 9:42 pm

Ella wrote:Three days late and XX dollars short, but...

Age: 43
Salary: Lower-middle range of 400-800K
Savings rate: 50% of gross income
Amount saved: 2.7M
Goal: was 4M, now in flux

I did not get to 50% savings rate until 2 years ago, despite being a more intentional saver than most of the people I know. Quicken has done wonders to help me truly see my income and expenses, adjust my spending, and maximize my savings.

My COL tradeoffs are in the realms of housing, car, and kids. Tiny home, crappy old car, no kids. Totally OK with all 3. I do spend quite a bit on travel and giving.

My job has become tremendously more stressful in the past 2 years, with significant health and QOL effects. I haven't been able to re-jigger to a better balance. My goal now is to quit in 1.5 years, which will likely require part time locums and/or cutting expenses further. This is 2-3 years earlier than I had previously planned. Hence my goal savings is in flux.

Ella
May I ask a few questions?

Thanks for the detailed post.
How did you decide a target amount? I have 3 kids, average home and car and do not have that target goal at all- its lower!
I guess, it boils down to perhaps, what are your anticipated expenses on retirement. But how easy is that to define?
Thanks

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Yesterdaysnews
Posts: 424
Joined: Sun Sep 14, 2014 1:25 pm

Re: Physician Retirement Savings

Post by Yesterdaysnews » Sun May 14, 2017 11:19 pm

I am interventional radiologist in private going on almost 10 yrs now, currently age 40. I actually enjoy my work a lot at the moment so not really thinking about part-time. NW is prob about $4m between paid off primary house and investment accounts. Debt free. Recently decided to loosen the purse string a bit and enjoy some of the fruits of all those years of labor, mostly in the form of experiences, as material junk doesn't give me much long lasting pleasure.

E5797
Posts: 12
Joined: Wed Feb 17, 2016 7:23 am

Re: Physician Retirement Savings

Post by E5797 » Fri Nov 17, 2017 9:48 pm

Age 40
Current Retirement Savings $3.6M
Net worth $4.0M
No inheritance.

Was lucky after fellowship about 10 years ago to find a great job with a private practice group. LCOL area, relatively high salary, and bull market over the last decade have helped increase my savings dramatically. There has been some major hospital mergers in the area over the last few years, driving many private practice groups out of town. Eventually we'll be given the ultimatum to join the health system or leave. Maybe a year or two left as things are.

Originally, I'd planned on at least working to 55 or 60, but depending on how things go, maybe I'd just hang on at half time to get health insurance and begin to spend more time on hobbies/traveling. Or hope another private practice job opens up somewhere.

Goal would be savings of 5 million which would have 200k at a safe 4% withdrawal rate. That's way more than I spend now, but I'd like to travel more and I would have more free time. Also leary since we've been in a bull market since I've been investing--one big drop and FI/RE may not be so easy.

Indydoc
Posts: 1
Joined: Mon Dec 11, 2017 8:02 pm

Re: Physician Retirement Savings

Post by Indydoc » Mon Dec 11, 2017 9:24 pm

Age 48
NW 5.0 M
No inheritance

Dual physician family- High paying speciality / primary care
3 Kids private school / 529 with 600K ( not counted in NW)
Doctor house - no other debt

I want to aim for a work/life balance - at current saving of 250K /year will hopefully reach >10 M by 60.
Agree with some of the opinions - spend it on the way

Bulldog79
Posts: 2
Joined: Sun Feb 11, 2018 9:28 pm

Re: Physician Retirement Savings

Post by Bulldog79 » Sun Feb 11, 2018 10:34 pm

I just found Bogleheads and I'm sorry I've missed out on this gem!

I'm a 57yo frugal specialist with an MBA and 25 years of private practice experience in a low-cost Midwest City. My annual income has fluctuated between $600-850K over the past 20 years in a specialty practice that I started with another senior physician when I completed my fellowship. While money has been an important goal, I view it as a means of independence rather than conspicuous consumption. I have three daughters with the last finishing her senior year at a public college. All college costs were covered by brokerage funds that I supplied nearly 20 years ago with $30K of "seed money" in each...each growing to $100K+ and easily covering the costs of a PUBLIC college education. I've been married to the same terrific woman for 35 years and we share similar financial goals and views. (I can't emphasize enough how important this is with regards to reaching your personal and financial goals...a trustworthy mate.) Our living expenses are relatively modest at ~$80-100K (after tax) per year, allowing us to save a large portion of our annual income. We live in a $600K home and have been mortgage free for 23 years. I drive a 10 year-old Lexus LS460 (bought 9 years ago at 65% original sticker price) and my wife drives a 12 year-old minivan. During our 35 years of marriage we've owned eight vehicles, most of them purchased used (with low mileage). We infrequently dine out (my wife's a terrific cook and "stay at home" mother) and take at least 1-2 vacations annually. I mow my own lawn, and my wife does the majority of the housework herself. Part of this is to save money, but the other is to model for our children as it is unlikely that they will have the same income levels that I've been so fortunate to have. In a nutshell, we live well below our means, yet live meaningful and fulfilling lives that are not dominated by money concerns or material objects.

I track my finances closely and my NW by age:
40yo: $2.2M
45yo: $4.1M
50yo: $7.0M
55yo: $9.6M
57yo: $11.5M (compounding is truly amazing)

Most of my assets are in financial instruments, namely, securities, bonds and index funds. I anticipate retiring in another 4-5 years and readily admit that I could probably retire today. However, on MOST days, I enjoy my work, colleagues and, particulary, my patients. In a low interest rate - low return environment, I would suspect that one would want 30-40X one's after-tax annual living expenses. I suspect that health care costs will take a large portion of this, particularly for individuals in their early sixties and not yet Medicare eligible. Thus, if you anticipate spending $12,000 per month in retirement (not an unlikely scenario for many physicians), then you'd want $4.5-6.0M in retirment funds. Personally, my idea is to set aside a given amount of "cash equivalent" money (say $1.0M) and use this for living expenses while allowing the remainder of my investments to remain "at risk" in the market. To paraphrase Buffett, "we wouldn't mind if the stock market closed for ten years." Yes, it's true that I'll probably never spend all my money, but the funds do provide a sense of security. Moreover, hopefully i'll be able to distribute much of these funds to deserving charities.

Much of my success I readily attribute to LUCK. Yes, I was lucky to be born to parents who valued education and hard work. I was lucky to have above average intelligence, and I was lucky to have terrific mentors through my training years. I was lucky marrying a life-long mate and I'm lucky to have three terrific daughters.

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