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Just turned 40, married, no kids
Old 12-25-2015, 12:32 PM   #1
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Just turned 40, married, no kids

So I hit the big 4-0 and I'm wondering whether it's time to early retire. Married, no kids at the moment, wife does not work. I doubt I would completely retire, maybe work part time for a while or take a lower stress lower paying job, maybe work as a seasonal park ranger in a national park over the summers, or just look for the next big thing. All options are open, but I probably won't just spend the rest of my life playing golf and gardening. I would love to travel around the country in an RV for major portions of the year, maybe taking locum jobs (I'm a physician) for maybe a week or two every other month, and maybe try my hand at writing in my free time. For planning purposes I would say I could conservatively earn a supplemental income of maybe 20-30k per year working locums jobs until I am actually ready to really retire around 65. Current income is 420k, but not really enjoying my work anymore. I could take a full time job I think I would enjoy for half the salary, but then I'd be working the same hours as now and not really enjoying the freedom and excitement of trying something new.

So my assets are a 450k home with no mortgage, 450k in retirement accounts, 1.2 million in non-retirement accounts. Spending currently is about 80k per year. I've been tracking my expenses very carefully over the past several years, so I'm fairly confident in that spending amount, though if I quit my job, buying health insurance will be the major additional unknown going forward given the seemingly precarious future of Obamacare. But I think we can get our spend down to 60k by downsizing to a condo, selling second car, and spending less on food (currently $1200 per month), to give us a buffer for health insurance.

I've run firecalc, with the above numbers and it tells me I have a 50% success rate over the next 50 years with a spend of 80k, and a 90% success rate with a spend of 60k.

I'm willing to risk a lower success rate because I know that in the worst case scenario, my wife and I would make it one way or another, and we don't have kids to worry about. I have also used conservative numbers (living to 90, not including social security and a small pension i would get at 60).

Honestly, the major factor that makes me hesitant to retire right now is the health insurance issue. If I knew i could always get health insurance at a reasonable cost for the rest of my life I think I would do it.

Oh and the still open possibility of having kids. We are trying but time is running out. Obviously if we have kids all of the above will have to be reconsidered. But I would still seriously consider going part-time to be able to spend more time with family.

Thoughts? Not just about the numbers, but also about the options (taking less stressful job for same hours but half pay, working part time locums, or retiring outright and trying something else)? I think I'm still young enough that I could conceivably start a new career, open a small business, freelance writing, etc.




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Old 12-25-2015, 02:44 PM   #2
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Since you have some questions about having enough saved and the ratio between your annual income and expenses is so large, it seems to me that just another year or two at work could dramatically improve your financial position. I'd certainly not want to impede your dreams of ER, but 41-42 is still pretty early.
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Old 12-25-2015, 04:26 PM   #3
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Since you have some questions about having enough saved and the ratio between your annual income and expenses is so large, it seems to me that just another year or two at work could dramatically improve your financial position. I'd certainly not want to impede your dreams of ER, but 41-42 is still pretty early.
This is what I was thinking. You are outside of my comfort zone for success to retire as young as you are.

You talk about 2 types of semi-retirement income... One is locum work, the other is seasonal Nat'l park work. I've talked to folks who work in the Nat'l parks - and it doesn't pay very well, and lodging costs are significant. Most folks either live in a RV or share accomodations with other workers from what I gather. They do it because it lets them spend their days off hiking/exploring the park. So I would consider that a break even (for the duration) type of option. The locum work would probably pay better, I would assume.

As for the kid thing ... I had my older son at 39 and my younger son at 41... so I'm familiar with the late to parenting thing. Kids are a cost and a joy and a PITA. (I say that on Christmas as they bicker over stupid stuff... sigh). It will change your life - mostly for the better. But I'll admit I'm envious of friends who are child-free... more often than most will admit. But then again - my kids are young teens... a less than easy stage.
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Old 12-25-2015, 04:35 PM   #4
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Sorry, I should have mentioned that 420k is pre-tax income. Take home is half of that, and then after expenses I am saving about $130k per year. Still very nice and I feel fortunate to be making a very good living (after a very long period of training), but I don't think working 1-2 more years would make that much of a difference financially. What happens to the stock market in the next 1-2 years could have a much bigger impact on whether I can safely retire soon. I am afraid there will be a major correction coming in the next 2-3 years as the fed starts raising rates, oil prices are no longer artificially depressed, and the US economy starts slowing down. Not sure if others feel this way, but I would be more comfortable retiring during an economic recession and major correction in the stock market, knowing that at that low point I had enough to live on and would likely have a tailwind behind me as the economy and market recovered, than to face the awful prospect of tendering my resignation letter and having the market crash soon after.

Having said that, I think you are right that continuing to work is probably the most realistic option. Working 10 more years would set me up for a solid typical type of retirement, but I guess what I am considering now is not so much retirement as a second act. I am worried that working 10 more years at the same job would eliminate my desire and ability to do something else meaningful with the rest of my working years. It's the choice I am facing now that I've reached the official midpoint of my life. The core question here is, what is my time worth? Time is definitely my most valuable asset, and it only gets more valuable as I get older.




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Old 12-25-2015, 04:38 PM   #5
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Yep, keep working, saving and investing. Maybe shoot for the big 4-5 as a target date to pull the plug.
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Old 12-25-2015, 04:48 PM   #6
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At least you have job skills you can always go back on if needed. My hat's off to you for paying attention to your expenses and living a middle class lifestyle.

I often see physicians continuing to work into their 70's out of necessity. After buying the big house (with a mortgage), two luxury cars and putting the kids through 16 years of private schools, they've never been able to fund their pension funds and IRA's enough to where they can enjoy retirement while living off the 4% withdrawal rule. It is tough when you're the one paying 100% of retirement savings.

I understand how you're disappointed in the direction of U.S. healthcare. It's very unclear what the industry's going to be like 5 or 10 years from now. I just pray that those responsible with making needed industry changes have the knowledge and authority to do what's right--for all parties.

My best friend's daughter just started GYN-Oncology at a major hospital, and she's fortunate to have no student loans. I recognize she's the exception. I'd hate to be at the point in life you're at owing $300-400K in student loans. That'd take away your options.

I agree with above about working a little longer. Stand back and observe the healthcare industry as you're young and have plenty of time to enjoy life.

If you get bored, I have a very close friend in Uganda that needs medical help with his ministry. They get young children out of prison, train them and place them back into their communities and families. Their parents in most cases were killed by politicians or in civil war--and the government picks up street kids.
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Old 12-25-2015, 06:10 PM   #7
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Hi, welcome aboard.. 43 yo here.. kind of similar issues and I pulled the plug this year. More worried about who would hire the 50+ year old starting over than anything, but I was done with Engineering and the politics of middle management (aka constant layoff train.. there is nothing more depressing than having to make yet another list).

So heres the thoughts
1) at 40, you are young, you will have to think long and hard about the social security part... as if you didn't start working (since I assume as a doctor you were studying most of your 20s).. you will have not paid in that much and thus won't have much to take out and not clear on your wifes situation, but that could mean she wouldn't have any backup/fail safe should something go terribly wrong... that may make you re-think holding off a few more years or maybe her working some part time gigs along the way.

2) Health Care.. I budgeted $15k for the 2 of us at 43/45 and assume 10% YoY growth. That is given that I have no meds, he has 1, and we typically on do the 1/yr checkup. That's $750/month premiums (no subsidy), plus out of pocket medical, dental, eye... and this year we are at $14,760... running injury for him requiring therapy and an ER trip for me over something stupid, 2 pair of glasses, normal teeth cleanings. Many on here tell you to assume $18k plus.. depending on area, that may be accurate.

3) outside of that, I quit my job this year, similar situation, we can easily get 20 hr week jobs to make an extra $40k if need be.. my DH wants to keep working so if he even goes down to consulting, we'll be fine. Now that I've quit my job, I've never felt better... stopped going to the chiropractor every week as my back stopped hurting, sleep through the night now, lost 20 pounds for lack of stress, my relationship is so much better with everyone as I don't come home with the "I hate my job" mentality.... ie there are TONS of immeasurable reasons to start over, take some time for you... and only you can say when enough is enough. Now of course this year was rough, zero return in the market and I think we will have a substantial pull back in the next year or two...but even with all that, I know I personally made the right decision. Just be sure your wife is 100% on board, its a major decision and while you can always do something else, you'll likely never be able to go back.
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Old 12-26-2015, 12:41 AM   #8
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Do it ! keep your expenses around $60K-$65K and you should be fine. I assume you'll get social security. Your savngs should last you a long time. If you're not feeling retirement is for you, go back to work at around 43-45 years old. Just take a 3- 5 year leave and see if that's what you like - if you liker retirement, you can easily control your expenses to stretch out your savings. You've got around $1.6 mill, so you can retire.
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Old 12-26-2015, 05:19 AM   #9
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I am worried that working 10 more years at the same job would eliminate my desire and ability to do something else meaningful with the rest of my working years.
I would suggest that this type of concern is more in your head than a hard reality. There is no reason that a future endeavor would be rigidly tied to how long you worked in a previous job. It seems to me that working as you are gets you to a more reliable FI faster than anything else you can do, and puts no limitations on your future.
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Old 12-26-2015, 11:06 AM   #10
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Current income is 420k [...] assets are a 450k home with no mortgage, 450k in retirement accounts, 1.2 million in non-retirement accounts. Spending currently is about 80k per year.
IMHO, you should keep working 3-4 more years and sock away an additional $500 thousand towards retirement. If you can live on $60-70K per year, this should be pretty easy to do. I think if you were to walk away from that $420k job at this fairly early point in your life, and then if things got harder or kind of uncomfortable financially a few years down the road, you may look back and regret giving up such a lucrative gig. I don't think $1.2 million is enough at your age. I'm several years older than you and have been semi-retired for about 2 years now, and I didn't consider giving up my high-salary job with great benefits until my net worth was significantly higher than yours and Firecalc was giving me 99% success rates. My two cents...
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Old 12-26-2015, 12:10 PM   #11
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I would stay in the saddle for a few more years at least until the window closes on the kids/no kids decision.

And that's coming from someone who pulled the plug at 44 with a preschooler at home.
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Old 12-26-2015, 12:31 PM   #12
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So I hit the big 4-0 and I'm wondering whether it's time to early retire.
I don't understand your question. It's always time to retire early.......
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Old 12-26-2015, 12:57 PM   #13
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You are too poor right now.
You need to build up more SS credits.

Perhaps what you need to do is to spend some time now while working enjoying vacations, so try out a cruise, go to Europe, etc. It will make the work less burdensome and get some of those expenses out of the way while you are working.

Perhaps some could even be deductible if you are imaginative.
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Old 12-26-2015, 12:57 PM   #14
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Thank you everyone for your thoughtful responses and talking me off the edge. I will keep at it for another couple of years at least until we have figured out whether or not we are going to have children.
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Old 12-27-2015, 12:53 AM   #15
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Yes, if you are still trying to have children, then it would be wise to hold off on quitting your medical career for a few more years. But it does sound like you need a change. Can you negotiate a lighter work schedule? Less being on call? Feeling burnout is a well-known hazard of your field. Try to schedule more time off each month, if that is possible, especially if you don't mind the income reduction.

Agree with Sunset, try to work in some enjoyable experiences while you're still employed. Those good memories last long after the experience has ended and make working seem not so bad.
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Old 12-27-2015, 07:43 AM   #16
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Sorry, I should have mentioned that 420k is pre-tax income. Take home is half of that, and then after expenses I am saving about $130k per year. Still very nice and I feel fortunate to be making a very good living (after a very long period of training), but I don't think working 1-2 more years would make that much of a difference financially. What happens to the stock market in the next 1-2 years could have a much bigger impact on whether I can safely retire soon. I am afraid there will be a major correction coming in the next 2-3 years as the fed starts raising rates, oil prices are no longer artificially depressed, and the US economy starts slowing down. Not sure if others feel this way, but I would be more comfortable retiring during an economic recession and major correction in the stock market, knowing that at that low point I had enough to live on and would likely have a tailwind behind me as the economy and market recovered, than to face the awful prospect of tendering my resignation letter and having the market crash soon after.

Having said that, I think you are right that continuing to work is probably the most realistic option. Working 10 more years would set me up for a solid typical type of retirement, but I guess what I am considering now is not so much retirement as a second act. I am worried that working 10 more years at the same job would eliminate my desire and ability to do something else meaningful with the rest of my working years. It's the choice I am facing now that I've reached the official midpoint of my life. The core question here is, what is my time worth? Time is definitely my most valuable asset, and it only gets more valuable as I get older.




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I am 11 yrs older but can perhaps give you some perspective based on some similarities...

- My wife has not worked since our first kid was born almost 26 yrs ago (have 4 kids). Curious, why does your wife not work?

- I'm self employed, but my income has pretty much been at or above yours for the last 10+ years. While i have always lived below my means, I find higher income folks typically get used to enjoying some of the finer things in life, particularly if they start having many consecutive yrs of high income. Take a hard look at the pros/cons of your job as you are very fortunate to be able to generate that kind of income and it could be very difficult to replace if you change your mind down the road.

- If you do have kids, they are very expensive... Sports/possible private school/cars/insurance/college/weddings/just stuff, etc. If you think kids are in the cards I Would definitely not quit.

- I am looking/tracking to FIRE at 55 (4 yrs) and my rationale is as follows... My last kid will be out of college, 1 wedding done/2 more girl weddings to go go, I don't hate my job and it is too lucrative to give up right now, I have higher RE income desires ($200k+... remember my earlier comment how it's easy to get used to a certain standard of living). At 40 and the fact you still may have kids, I would look hard at a plan that takes you at least to 50, but you will have to be the judge of that.

- I am trying to use these next 4 yrs to figure out what I am going to RE too. I think this very important before you shut the income faucet off. My DW and I are starting to dabble in our bucket list to see if what we THINK we want RE life too look like is really what we want. It's great to dream about spending 3 months in Italy, but maybe it's really not your gig so in our case, we will try 2 - 3 weeks first now to see what we think. I would recommend spending time really figuring this out while you are working... pretty important.

You are thinking the right way, but I think you need to keep putting $$ away and really get with your DW on these important impactful decisions. You have rich people problems, not all bad. Good luck!
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Old 12-27-2015, 07:48 AM   #17
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I find higher income folks typically get used to enjoying some of the finer things in life, particularly if they start having many consecutive yrs of high income.
Whenever I see people attempting to drastically reduce expenses, I always think of this...

There is a big difference to say you do not need to spend the money, compared to you cannot spend the money (because you do not have it).

Even someone making $75K a year cutting back to $40K makes me wonder.
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Old 12-27-2015, 07:54 AM   #18
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Whenever I see people attempting to drastically reduce expenses, I always think of this...

There is a big difference to say you do not need to spend the money, compared to you cannot spend the money (because you do not have it).

Even someone making $75K a year cutting back to $40K makes me wonder.
10-4

And I should have added, in addition to doing some test runs on what you think you want RE to look like, you should try and live at least 1 yr on your proposed budget to see if you can cut the mustard, particularly if you are cutting back from your current living exps.
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Old 12-27-2015, 02:16 PM   #19
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Old 12-27-2015, 04:15 PM   #20
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I would be careful about quitting completely so soon. Medicine is an all consuming profession, and tends to eat up all your time and energy, leaving you with fewer hobbies and other interests in your spare time. It's really important to know what you want to do with all that extra time.

Also, I don't think you have quite enough saved. The likely market correction in the next few years has me concerned, and I'm 16 years older and have not quite double your assets. I have planned about $85K/yr. our health insurance alone is about $10K/yr.

I spent a lot of my career fighting burnout and often drove to work telling myself I just can't do this anymore. A change in jobs helped that feeling a lot.

Seriously consider locum work. You talked about making $20-30K/year. In my primary care field that's about 2 months of work. Last year the group I was retiring from paid me $20K for 3 weeks of work. I'm sure you could find about 6 months of positions around the country, make half of what you do now, and live in all sorts of interesting places, with free housing wherever your position is. That would give you six months of free time to adjust to the lifestyle changes needed do you can afford early retirement. Locums gives you the best of both worlds-free time and good income. The company pays for housing and your food expenses as well, within reason. They cover your malpractice insurance as well.

I know pediatricians who do nothing but locums who have set up their own LLC allowing for significant tax breaks. Also, a self employed person gets to deduct health insurance premiums as well.

I strongly advise you look into locums. It pays way better than park ranger and you'll still get to hike anyway! Maybe you'd like to spend some time in Hawaii. It could happen.


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