More Details On My Savings and Salary.

[HFWR]

Yeah, organic stress relief; that's the ticket!! O0

 

[Ed_The_Gypsy]

Spanky,

However, the big egos in engineering go into management--where they usually sink the ship.

 

[MedicalDoc]

I think that alot of the comments have been thoughtful and useful.  Obviously a small number have not.  First, one person's reference to our salary and the cost of medical care.  Physician's salaries represent only a small fraction of the cost of medical care.  Hospital costs, drugs costs, nurses, and insurers get their share.  Second, consider the cost and years of training.  4 years of college, 4 years of med school, 1 year internship, 3 years residency, 2 years fellowship.  On an hourly basis, I made less than minimum wage throughout residency and fellowship while working more than 80 hours each week.  And during that time, the interest on my loans accumulated.  Thankfully, my work week is closer to 60-65 hours now.  

Another person commented on how they make it on $50k/yr.  Our after-tax child care costs approach that (we pay salary, health care, car expenses, room and board, and social security for our child's caregiver).  Is that an extravagance?  Not in our mind.  My wife and I both work long (and sometimes unpredictable) hours and feel that having trustworthy and dependable care for our child is worth the cost.  So do our patients who don't have to worry that we aren't showing up to care for them because our child's school is closed because of snow.  

Anyway, my impression is that people looking to retire early generally all into one of 2 categories:
1.  Those who seek to retire as early as possible, even if it means having a significantly diminished standard of living now and in retirement.  For them, any money spent  delays retirement (and is therefore bad).  You can recognize these folks as the ones who pride themselves on how little they spend
2.  Those who seek to retire early but are willing to work a bit longer if it means maintaining a "comfortable' standard of living.  They enjoy splurging for the occasional extravance, but don't want to work until they die.  

 

[REWahoo]

Anyway, my impression is that people looking to retire early generally all into one of 2 categories:
1. Those who seek to retire as early as possible, even if it means having a significantly diminished standard of living now and in retirement. For them, any money spent delays retirement (and is therefore bad). You can recognize these folks as the ones who pride themselves on how little they spend
2. Those who seek to retire early but are willing to work a bit longer if it means maintaining a "comfortable' standard of living. They enjoy splurging for the occasional extravance, but don't want to work until they die.

I think your assessment identifies two ends of the continuum of early retirement, but it isn't really possible to deliniate where one of your categories starts and the other ends. The point being, what one aspiring early retiree might consider a "significantly diminished" standard of living could be a "comfortable" standard of living to another.

We are all individuals and each of us has their own standard of living measurement scale. Mine has "possum living" on one end and "MD living" on the other... I declared ER when I reached the position located right between poppa bear and momma bear...

 

[Rich_by_the_Bay]

MedicalDoc,

I sent you a personal message on this board - check out the link at the top of the page.

 

[MedicalDoc]

ReWahoo

I agree with your comments.  I think that the trick is to strike a balance and that balance varies among people.  As some on this thread have suggested, I probably could retire tomorrow, if I were willing to drastically change my lifestyle.  Obviously I am not.  I enjoy my lifestyle and have certainly become accustomed to it.  My wife enjoys it too and as she contributes significantly to our income, her views and desires are important.  

 

[Enuff2Eat]

hi doc, that is awsome and ton of congrats. i say the more you make the more you spend. i read somewhere that physician and dentist tends to have a very difficult time to retire early simply because they caught up the "social" status and have to live like they make big bucks. this philosiply is fine but that put physician in a position that they can "never" retire early.

so 7 million dollars for you in 10 years... may be may be not. i say that we make 1/5 of what you make (40years old) and we got a "comparable" networth.

enuff

 

[retire@40]

Another person commented on how they make it on $50k/yr.  Our after-tax child care costs approach that (we pay salary, health care, car expenses, room and board, and social security for our child's caregiver).  Is that an extravagance?  Not in our mind.  My wife and I both work long (and sometimes unpredictable) hours and feel that having trustworthy and dependable care for our child is worth the cost.  So do our patients who don't have to worry that we aren't showing up to care for them because our child's school is closed because of snow.

This is where the roads diverge, at least for me.  And this is actually one of the reasons for my semi-early retirement while in my mid 30s.  

I'm sure you love your family and this is not meant to be any kind of attack on it.  I just want to express a difference in philosophy.

I hope you never come to realize this the hard way, but life is very short.  You can only be with your children once, meaning you can only see them walk their first walk once, enjoy their first words once, along with all those other small things that sometimes go unappreciated until it's too late.

My choice was to cut my workload mainly to spend more time with my child (and wife) and be there along with my wife to watch him grow, and to talk with him even when he couldn't talk back, and to be there as he got older to answer all his dumb questions like why the sky is blue.

That means a lot to me, and I hope someday it will mean a lot to him.  

Would I love to have $6 million in the bank and live a $250K/yr lifestyle?  I'm sure one could easliy get used to it  But I wouldn't trade that for all those days from the time I used to take my child to the park to let him crawl on the grass to now when I take him to the park to play catch, and all the time in between.  That's what life is all about, at least to me.

 

[Spanky]

Would I love to have $6 million in the bank and live a $250K/yr lifestyle? I'm sure one could easliy get used to it Smiley But I wouldn't trade that for all those days from the time I used to take my child to the park to let him crawl on the grass to now when I take him to the park to play catch, and all the time in between. That's what life is all about, at least to me.

My brother, a physician, who spent very little time with his two children because of the demand of his job. They are now in their twenties. I often wonder if he would turn back the time to watch his children grow. I feel fortunate to have spent time with my two daughters.

 

[Sam]

My wife and I are physicians in our mid-40s
Our total gross income: $~580K/yr
403B and academic annuity savings: ~$1,000,000 (90% stocks)
After tax retirement account: $500K (75% stocks)
Take home: ~380K/yr
Savings (403B and after tax accounts): ~125K/yr
Academic annuity (paid by our employers) 60K/yr

On the average, I save about 20% of my gross.  You're doing 22%.  I think it's great.

Based on your provided data, I'm guessing that you and your wife have been working as full fledged doctors for about 15 years.  Your saving todate is 2 millions or roughly 8 times your current expense, including the 50K you spend on the care of the kids.  Without the 50K "daycare", your saving is 10 times your expense.  So, it appears that you don't need 6 to 7 millions to retire.  At 4% swr, you only need 5 millions.

Sam

 

[macdaddy]

MedicalDoc,

Thanks for posting actual numbers, it helps us see different realities and possibilities. I had one question, which is how do you shield your assets from liability? Is your academic annuity shielded? Where are you planning to build up the bulk of that 7 million and how will it be protected (i.e. trusts for your child)? My father is a physician with similar figures and planning needs so I have worked through some of this with him. Not knowing what specialty you and your wife are, or what state you live in, I am not sure how big of a concern liability is, but would be interested to hear your thoughts on it.

Second, my father as a physician altered his schedule while my sibling and I were younger to allow himself to spend more time with us. He probably worked ~ 40 hours a week MAX from when I was 5 to when I was 15, when he started to pick up the pace. He never suffered from a career point of view but he is a hospitalist (specialist) and didn't have as much need to build up a practice. He is happy at work, I suspect because he never killed himself and took it easy, and is now happy to keep practicing until he is 55 and then part-time/locums (3-6 months a year for 100k-150k/year) until he drops. I truly remember him being there for me during my younger years and believe it did have an impact on me and appreciate him for it! Could he retire now versus 5 years from now if he had worked much harder for those 10 years... yes... but I don't think it would have been worth it.

My 2 cents.

 

[TargaDave]

I think that alot of the comments have been thoughtful and useful. Obviously a small number have not. First, one person's reference to our salary and the cost of medical care. Physician's salaries represent only a small fraction of the cost of medical care. Hospital costs, drugs costs, nurses, and insurers get their share. Second, consider the cost and years of training. 4 years of college, 4 years of med school, 1 year internship, 3 years residency, 2 years fellowship. On an hourly basis, I made less than minimum wage throughout residency and fellowship while working more than 80 hours each week. And during that time, the interest on my loans accumulated. Thankfully, my work week is closer to 60-65 hours now.

Another person commented on how they make it on $50k/yr. Our after-tax child care costs approach that (we pay salary, health care, car expenses, room and board, and social security for our child's caregiver). Is that an extravagance? Not in our mind. My wife and I both work long (and sometimes unpredictable) hours and feel that having trustworthy and dependable care for our child is worth the cost. So do our patients who don't have to worry that we aren't showing up to care for them because our child's school is closed because of snow.

Anyway, my impression is that people looking to retire early generally all into one of 2 categories:
1. Those who seek to retire as early as possible, even if it means having a significantly diminished standard of living now and in retirement. For them, any money spent delays retirement (and is therefore bad). You can recognize these folks as the ones who pride themselves on how little they spend
2. Those who seek to retire early but are willing to work a bit longer if it means maintaining a "comfortable' standard of living. They enjoy splurging for the occasional extravance, but don't want to work until they die.

Doc, don't let the snide comments get to you. You have probably already figured out this site has a very vocal proportion of posters in category 1 (or not too far from it) and they can be a little rough on those who don't fit a certain way of thinking. It's still a good site to monitor even if you don't post much, but please keep posting. I think this board would benefit greatly from a broader range of posters (more category 2's). I for one greatly admire what you have acheived and would like to hear more.

I work around venture capitalists, angel investors and other hi-tech entrprenuers. Whether its ten goats or $10M it's normal to think about dealing with wealth-money-retirement and getting to the next rung on the ladder. Some people just don't quite understand that. (I should disclose that I'm much closer to the ten goat category myself but hoping to move up to 15 soon ).

 

[Spanky]

Spanky,

However, the big egos in engineering go into management--where they usually sink the ship.

Classifying all management as egotistic may be viewed as stereotyping. It may be more appropriate to label them as ambitious, dominant, entrepreneurial, superior in leadership, and so on.

 

[SteveR]

MedicalDoc,

Welcome to the board. There are a number of folks here with some pretty significant Net Worth values as can be seen in any number of polls done here from time to time. Your incomes will allow a very nice networth which will be able to fund a nice income stream in retirement.

Some may feel intimidated by your income level and your expenses but it is all relative. Don't let the negative comments get in the way of a fruitful discussion on what you would like to gain from being part of this site. Most of the folks here represent a somewhat distorted slice of the world due to the nature of the subject content on the board. Early retirement is not the same as Retirement. The concept of retiring before age 65 is only a distant dream to millions of people. Here it is a daily experience. It takes a different mind-set to plan and execute the life-style changes that must occur for one to attain the lofty goal of early retirement. The average working Joe or Jill out there can't see the forest for the trees and continue to get further in debt and fail to save much of anything most of their lives. One day they wake up and see that retirement is only a few years away and they have saved nothing.

No matter how much one makes saving and investing are critical to creating and growing a nest egg that will later serve as the source for an income stream during retirement. The amount of that income stream will vary by the needs (or wants) of the individual. How much is enough? That is what it is all about. The more you need or want the more you need to have in the stash to fund it for however long you will live. For you and others with a high income and higher live-style the amount will be much higher than many others here who can and do live on much less. It is all relative. You CAN live on much less than you do currently. You COULD retire earlier than you plan to if you chose to live on less. Wanting to live on more is a trade off for you buy requiring you to save longer to create the size nest egg you feel you want to fund the life style you desire. There is nothing wrong with that if that is what you want to do. But you won't get much sympathy from the dumpster divers here.

Good luck in your quest to fund your personal nest egg. The trick is to know when you have "enough" and then stop working. Maybe in 12 years you will change your mind on how much you really need for expenses........or maybe not. It is all up to you.

 

[MasterBlaster]

The trick is to know when you have "enough" and then stop working.

That's it in a nutshell. Obviously from an economic point of view you are best to keep working. However you just have to weigh at what lifestyle is acceptable to you and are you willing to keep working to improve it.

A book along these lines, "Your Money or Your Life" by Joe Dominguez and Vicki Robin talks about the tradeoff that I found helpful. The book was written a couple of decades ago and is however kind of dated. The investments recommeded are ridiculous today.

How much is enough is the question we all should be asking.

 

[cute fuzzy bunny]

1. Those who seek to retire as early as possible, even if it means having a significantly diminished standard of living now and in retirement. For them, any money spent delays retirement (and is therefore bad). You can recognize these folks as the ones who pride themselves on how little they spend
2. Those who seek to retire early but are willing to work a bit longer if it means maintaining a "comfortable' standard of living. They enjoy splurging for the occasional extravance, but don't want to work until they die.

3. People who realize that they dont have to live up to other people ideas of what a "high standard of living are". I used to make more than you and your spouse put together, but it finally sunk in that getting rid of the stress, aggravation and time consumption of my working life in order to actually live MY life and raise my own child made a lot of sense. I traded off running on the hampster wheel to pay for living the high life for a very pleasant life style where I do myself what I used to pay others to do.

Hmm...work ten hours a day to drink $4 lattes, $5 cocktails, $40 meals and pay people to mow my lawn, clean my house and raise my kid, or spend a few hours a day brewing my own coffee, popping my own wine corks, cooking my own food, mowing my own lawn, cleaning my own house (ok...not very well sometimes), and I've seen every single living "first" my son has accomplished.

And Robin Leach never, ever wants to interview me, which is a huge plus as far as i'm concerned

However, if the wife isnt going to go for it, you've either decided to move forward with half your assets or keep doing what you're doing.

Good luck.

 

[TromboneAl]

Fair or not, that $7 million figure is going to come into my head when I write my health insurance checks. Just like I think of the oil company record profits figure when I pay $2.75/gal for gas.

 

[poyet]

For more helpful (and accurate) comparisons, here is my data:

My wife and I are physicians in our mid-40s
Our total gross income: $~580K/yr
403B and academic annuity savings: ~$1,000,000 (90% stocks)
After tax retirement account: $500K (75% stocks)
Take home: ~380K/yr
Savings (403B and after tax accounts): ~125K/yr
Academic annuity (paid by our employers) 60K/yr

So we save about 1/3 of our take-home salary. How does that compare to you? Any advice?

We are hoping to retire in about a dozen years and figure that we should have around 7 million by then

Saving 120k per year, invested @ say 14% (quite difficult over 12 years) and tax deferred will yield 2.8 millions. If your 120k/year grow @ 7% it will just be 1.9 million. Growing to 7 millions will be a challenge for many reasons and will also depend on how you handle taxes and leverage if any. It also depends on the expected returns on your current assets. But that's an interesting objective. The question is do you postpone enjoying your life to when you're 57 to be sure of having 7M$

 

[region2]

MedicalDoc, Where are you starting from? What is your current nest egg? Amassing 7 million even on your income may be a gargantuan task.

 

[Enuff2Eat]

hi doc,

is it true that husband and wife physians couple have ZERO SEX??

hi stress, hi lifestyle, long hours and no time....are the things i heard.

enuff

sorry for unpolite question but just want to confirm the fact.

 

[cute fuzzy bunny]

is it true that husband and wife physians couple have ZERO SEX??

Maybe not with each other

 

[haha]

I think that alot of the comments have been thoughtful and useful.  Obviously a small number have not.  First, one person's reference to our salary and the cost of medical care.  Physician's salaries represent only a small fraction of the cost of medical care.  Hospital costs, drugs costs, nurses, and insurers get their share.  .   

You know Doc, I never thought of this. It's those damn overpaid nurses, coming to work in their BMW 7xxs that have made US medicine so terribly expensive. And of course, every time reform is attempted, like a single payer system, the American Nurses Association throws in with the insurers and other leaches and blocks it.

Thanks for setting me straight, Doc.

Ha

 

[MasterBlaster]

HaHA:

When you need your bypass operation we'll send you to the doc only pullin in 19k/year.

 

[cute fuzzy bunny]

I dont have much of a problem with someone who goes to a bazillion years of school, works another bazillion hours for peanuts, then making a good living.

 

[haha]

Thanks fellas, I knew you would understand. 

Ha