Join Early Retirement Today
Reply
 
Thread Tools Display Modes
More Details On My Savings and Salary.
Old 03-19-2006, 10:34 AM   #1
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 13
More Details On My Savings and Salary.

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

MedicalDoc is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: More Details On My Savings and Salary.
Old 03-19-2006, 10:49 AM   #2
Thinks s/he gets paid by the post
 
Join Date: May 2005
Location: Texas
Posts: 1,038
Re: More Details On My Savings and Salary.

You could retire right now. I would if I had your savings.
__________________
In theory, theory and practice are the same. In practice, they are not.
Lazarus is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 10:50 AM   #3
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
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
Er, Doc, I'm thinking you're not going to get much help here. *I keep looking for the sarcasm disclaimer or the smiley button but I'm going to treat this post as a serious question.

Your income is greater than some of the other board members by an order of magnitude-- literally by a factor of 10. *Your portfolio is probably twice the size of many on this board and it's about to grow to nearly that order of magnitude. *And in the philosophy of "Physician, heal thyself", you're also going to be accused of having a lock on healthcare expenses.

Unless you're carrying a pile of debt, or living next door to Trump & Oprah, or planning to raise a couple dozen kids and pay for their Harvard degrees, you appear to have the assets to retire yesterday. *Of course that depends on your expenses, but again keep in mind that most people here ER on $25K-$40K/year. *The last guy who insisted that he needed $100K/year "to support my lifestyle" had a tough time of it.

As far as I can see, your biggest issue is deciding why you're still working.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 10:58 AM   #4
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 13
Re: More Details On My Savings and Salary.

This is a serious post. I live in a major metropolitan area and could retire right now IF I sell my house (major expense in mortgage, upkeep, taxes, etc.) and make other drastic changes in my standard of living. If I did that, I'd also have to pay for a divorce lawyer. I presume that most people here are trying to preserve their standard of living into retirement.

MedicalDoc is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 11:05 AM   #5
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc

Take home: ~380K/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
I think you are on the right track.

If you are spending $250K a year, you would need $6-$7 million to retire.

So you'll be about 57 and, being medical doctors, if you've taken care of yourselves, you might have a good 20 years of quality life remaining to enjoy your savings.

I would opt for 40 years or more of quality life to enjoy my savings, but I only need $50K a year to keep me comfortable. *
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 11:18 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Ed_The_Gypsy's Avatar
 
Join Date: Dec 2004
Location: the City of Subdued Excitement
Posts: 5,588
Re: More Details On My Savings and Salary.

Quote:
I presume that most people here are trying to preserve their standard of living into retirement.
That would be nice. In our case, however, the objective is survival.
__________________
I have outlived most of the people I don't like and I am working on the rest.
Ed_The_Gypsy is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 11:57 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: More Details On My Savings and Salary.

My advice: give away more to charity

To see how you are doing you might wish to read this article on "Personal Financial Ratios..." http://www.fpanet.org/journal/articl...p0106-art6.cfm

And to add a personal note for you to compare: We are about the same age. Our salaries are about 1/3 of yours. You didn't mention children, we have 2 kids under 15. We have invested and saved up a little more than you have. We save about 35% of our income. Income taxes are only 15 to 17% of our income though.

More advice: Enjoy life. Practice retirement by taking one or two months of vacation each year. Reduce your investment expenses to less than 0.5% of your portfolio. And don't forget that charity.
LOL! is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:13 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: More Details On My Savings and Salary.

I would also recommend that you read The Millionaire Next Door if you have not already.* Also maybe The Four Pillars of Investing and Why Smart People Make Big Money Mistakes.

What other kind of specific advice are you looking for?
LOL! is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:20 PM   #9
Dryer sheet wannabe
 
Join Date: Mar 2006
Posts: 13
Re: More Details On My Savings and Salary.

I've read The Millopnaire Next Door and enjoyed it. Mostly, I'm mostly trying to get a sense of what people are saving who hope to retire with a standard of living that approximates their pre-retirement income. Trying to figure out whether I should try to divert more income to savings by reducing my expenses.
MedicalDoc is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:29 PM   #10
Recycles dryer sheets
 
Join Date: Mar 2006
Posts: 91
Re: More Details On My Savings and Salary.

7 Million! Is medical Doc seriousy asking if this is enough!!!!

some people never see one million let alone seven million. suggest medical doc (if he is sincere and i have my doubts) looks for an ER site for millionaires.
claire is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:35 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 10,252
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
.... Mostly, I'm mostly trying to get a sense of what people are saving who hope to retire with a standard of living that approximates their pre-retirement income. Trying to figure out whether I should try to divert more income to savings by reducing my expenses.
Then you probably already know that you will need 25 times your annual expenses in your war chest when you retire.* And it appears you have a handle on what your expenses are.* So you just run FIREcalc and you are all set.

Whether you will reach $7MM in 12 years is an open question but easily figured out. I imagine you have already done the calculation. *What average rate of return does that use? *It reads like you would contribute more than $2MM in those 12 years, so getting to $7MM with only $5MM "growth" from now should not be too hard starting from your current assets. *What is that 8% growth rate?

I have also found it helpful to run TurboTax with numbers projected from my first year of retirement.* You can then see how drastically your taxes will change and thus account for them in your expenses.
LOL! is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:37 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Gone4Good's Avatar
 
Join Date: Sep 2005
Posts: 5,381
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
Mostly, I'm mostly trying to get a sense of what people are saving who hope to retire with a standard of living that approximates their pre-retirement income.* Trying to figure out whether I should try to divert more income to savings by reducing my expenses.
Well I have an income similar to yours and live in a major metropolitan area (New York City) too, but I'm going to save about 75%-80% of my take home pay this year (before investment income). *I plan to retire at my current standard of living in 3 years . . . I'll be 38. *

I work with people who make multiple times what you and I do, but won't retire early because they let their spending get away from them. *With annual expenditures of ~$255k, you might be in a similar boat. *I think the trick is to not let your spending get that high in the first place, because it is easier to do without the 6,000 sqf home then it is to downsize. *My advice would be take a hard look at your expenses and try to move that retirement date forward. *

But in the end it is a matter of personal preference. *For me, I'd rather do without the big home and the beach house if it means I can spend the rest of my days doing the things I love to do. *
__________________
Retired early, traveling perpetually.
Gone4Good is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:41 PM   #13
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
Mostly, I'm mostly trying to get a sense of what people are saving who hope to retire with a standard of living that approximates their pre-retirement income.
I am saving enough to keep my before-retirement standard of living the same for semi-retirement and the same for full retirement. *If you think you are going to go on a financial diet when you retire, your likelihood of success will be smaller. *

Just like food diets don't work long-term, neither do financial diets. *It has to be a lifestyle with which you can be happy.

I'm not saying you shouldn't live on $250K a year even after retirement, if that is what will keep you and your wife happy. *For me, $250K would be excessive since I am happy with what I have using about $50K a year. *For others $50K may seem excessive. *I could get by bare bones on about $32K a year, but I wouldn't choose to retire to that. *I could also live it up a bit more on $75K a year, but I'm not willing to trade my fun hours left on this Earth to work 5 or 10 more full-time years to accumulate enough to draw an extra $25K a year.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 12:52 PM   #14
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,455
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
So we save about 1/3 of our take-home salary. How does that compare to you? Any advice?
We save 0.375 of our gross income - which is piny in comparison to $125K. No advice - you are doing exceptionally well.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 01:16 PM   #15
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,856
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
This is a serious post.* I live in a major metropolitan area and could retire right now IF I sell my house (major expense in mortgage, upkeep, taxes, etc.) and make other drastic changes in my standard of living.* If I did that, I'd also have to pay for a divorce lawyer.* I presume that most people here are trying to preserve their standard of living into retirement.
Ewwwwwkay, I understand.

I should point out that of the 2200 other posters on this board, many of them also live in major metropolitan areas and are probably living on ER expenses a little lower than your current budget. A lot of things get cheaper in ER when you're not paying the expenses associated with working. I'm not suggesting that your standard of living is inappropriate or needs to change, but I am suggesting that you would benefit from a look at how you'd spend your time and money in ER. It might be less expensive than you think.

As for your spouse's feelings about her ER standard of living... well, she's free to keep on working to preserve whatever standard of living she wants, isn't she? I know a guy married to a doctor who's pulling down some serious money-- north of $500K/year-- and he's deliriously happy to be the at-home parent raising their four pre-schoolers.

As for the rest of the numbers... well, if you're trying to compare to the rest of the board, you need a new board.
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 01:48 PM   #16
Recycles dryer sheets
Robert the Red's Avatar
 
Join Date: Aug 2005
Posts: 335
Re: More Details On My Savings and Salary.

If* you divide all MedicalDoc's numbers by something like 3-5, you end up where an 'average' poster hereabouts might be in mid-career.* So his idea of working 12 more years to retire seems about right.* The peculiarity is the division you have to do get this perspective.* If he's sick of dealing with whiny ungrateful sick people, nurses, med students, interns, residents, malpractice worries, billing departments, insurance companies, IRBs, NIH IRGs, et cetera (which is why he's ended up here, probably), then he is in an unusual situation -- he could pare back to a merely comfortable lifestyle and get out of the medical ratrace now.* But if he even mumbles this idea to himself, his wife looks at him like he's mad.

So the problem might be mid-life mixed expectations and aspirations.* Not a financial problem.* Meet the wife in the middle?* Maybe an adventure -- go overseas and practice medicine for expats for 2 years.* Maybe go practice in a beautiful rural area (for me, the Rockies call) at lower pay and lower pace?* Maybe give up the glorious clinical salary and just do research?
Robert the Red is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 02:01 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Brat's Avatar
 
Join Date: Feb 2004
Location: Portland, Oregon
Posts: 7,108
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by Robert the Red
If* you divide all MedicalDoc's numbers by something like 3-5, you end up where an 'average' poster hereabouts might be in mid-career.* So his idea of working 12 more years to retire seems about right.* The peculiarity is the division you have to do get this perspective.* If he's sick of dealing with whiny ungrateful sick people, nurses, med students, interns, residents, malpractice worries, billing departments, insurance companies, IRBs, NIH IRGs, et cetera (which is why he's ended up here, probably), then he is in an unusual situation -- he could pare back to a merely comfortable lifestyle and get out of the medical ratrace now.* But if he even mumbles this idea to himself, his wife looks at him like he's mad.

So the problem might be mid-life mixed expectations and aspirations.* Not a financial problem.* Meet the wife in the middle?* Maybe an adventure -- go overseas and practice medicine for expats for 2 years.* Maybe go practice in a beautiful rural area (for me, the Rockies call) at lower pay and lower pace?* Maybe give up the glorious clinical salary and just do research?
It seems to me that Doc and wife-Doc should start thinking about their goals and develop a plan to acheive a common goal.* This couple may be so busy working that they aren't in sinc.* If she takes the position that the goals cannot be reconciled it is better to know that now than later.
__________________
Duck bjorn.
Brat is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 02:35 PM   #18
Full time employment: Posting here.
 
Join Date: Feb 2006
Posts: 987
Re: More Details On My Savings and Salary.

Well - to just answer the basic question (without getting into who has/does what* : ), my DW/me currently save/invest an amount that is 1/3 of our current gross income.

No, we did not start at that level (I understand that some folks save/invest more, some less).* We started at about 2%, increasing it over the years.

Our plan is on track to retire at 60 (less than 2 years), having 100% of our current NET income (it's a lot easier to think that way, then how the "advisors" suggest).* Sure, it's taken us a little less than 25 years to get here, but we were at the "survival" level the first 10 years of our marriage (financially), and everybody understands that you have to have at least food, shelter, and clothing before you can think about saving/investing.

We don't have multiple homes, nor travel round the world.* We do have the house we built 12 years ago (no mortgage) and travel to Europe every year (with a second vacation in the U.S.)

Everything we do, or buy, is done for "cash".* That includes our vacations, our cars (my wife saved for 10 years to pay for hers; I still drive a 17 year old Olds).* Our 30 year mortgage was paid (through a lot of "delayed gratification) in 5 1/2 years (of course, we "saved" $125K in "unpaid interest".* If you calculate what we would have had to earn to pay that interest, our savings was closer to 150K).

Anyway, that just some info for comparison, for the Doc for his original question, and some additional on "financial lifestyle", regardless of income.

Just one other thing - we live about 90 miles west of the City (NY) and our "cost of living" is greatly influenced by the folks from NY and NJ that are moving here and taking public transportation to their jobs in the City.

- Ron
rs0460a is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 02:52 PM   #19
Thinks s/he gets paid by the post
 
Join Date: May 2005
Location: Texas
Posts: 1,038
Re: More Details On My Savings and Salary.

Quote:
Originally Posted by MedicalDoc
This is a serious post. I live in a major metropolitan area and could retire right now IF I sell my house (major expense in mortgage, upkeep, taxes, etc.) and make other drastic changes in my standard of living. If I did that, I'd also have to pay for a divorce lawyer. I presume that most people here are trying to preserve their standard of living into retirement.

Your standard of living is much higher than most people now. ($250K) per year in expenses. I live on about $50K expenses now and don't lack for anything. In fact I probably have more than most of my neighbors. I have earned about 1.5 Million in my entire life. I have about 1/3 of that in net worth now. Are you saving enough?

Your wife would divorce you if you lowered your standard of living to something like mine? If so, you have a serious matter to think about. Much of your spending is most likely for status. Would you rather have freedom or status?
__________________
In theory, theory and practice are the same. In practice, they are not.
Lazarus is offline   Reply With Quote
Re: More Details On My Savings and Salary.
Old 03-19-2006, 04:41 PM   #20
Thinks s/he gets paid by the post
Eagle43's Avatar
 
Join Date: Jan 2005
Location: DFW
Posts: 2,016
Re: More Details On My Savings and Salary.

Errr ruh, What's Up, Doc?* Why do you want to retire?* You have the loot to walk this minute.* But, you have spent half your life training to be a doctor, I suppose, where you can do some good.* If you want to just chuck the lifestyle, why not start charity work somewhere in a ghetto?* Then you could still use your skills.* If your wife will divorce you, and you want to stay married, then the decision is made.* Anyway, you got more money than I will ever have.* Good luck in your decision(s).*

BTW:* I heard somewhere that doctors and lawyers have the most serious problem with regards to lifestyle.* They just have to live high on the hog.* True??* If so, then you probably need all that money.
__________________
Resist much. Obey Little. . . . Ed Abbey

Disclaimer: My Posts are for my amusement only.
Eagle43 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
You probably need 25 to 30 times your current salary saved to retire?????? nun FIRE and Money 28 04-19-2007 08:21 PM
2006 personal savings drop to 74-yr. low ScaredtoQuit FIRE and Money 98 02-10-2007 07:27 PM
Covering a gap until pension starts utrecht FIRE and Money 15 11-30-2006 04:42 PM
Savings Tips thechoson Young Dreamers 60 06-03-2005 12:28 PM

» Quick Links

 
All times are GMT -6. The time now is 02:48 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.