Hello, 42 year old MD looking to partly retire at 45

[brainsqueeze]

42, married, 2 children in elementary school. Full time doc. I enjoy my job but don't want to do it so much of the time. Like right now I am in the middle of a 10 straight day stretch, which is probably why I'm on this board today!

We have about 30x our current spending saved, plus another $300k for college for the kids. However we are upsizing our house out of necessity, which means a new mortgage/higher annual spending which drops us down to around 20x. So not quite FI yet. My goal is 2-3 more years of heavy savings and paying down the mortgage with a goal of getting to:

Age 45
25x savings
20 years left on the mortgage
$500k for college

At which point I want to go part-time, something like 1/4-1/2 time, maybe as a pseudo-locums for my current employer, to use me when they need coverage, etc.

Biggest challenge is health care, as it is for many. I have some chronic health problems of moderate severity. The good news is I am on no expensive drugs. The bad news is the diagnosis is a mystery so I'm constantly getting more tests and there's the possibility of an eventual diagnosis which would necessitate expensive treatments.

Anyway, that's it in a nutshell. Looking forward to gleaning the wisdom of the FIRE community.

 

[Katiek]

Welcome. You're well positioned, and it's great you have a job that can be something other than all or nothing. That will give you a lot of flexibility in the coming years. And good luck with the diagnosis and treatment of you health problems.

 

[MBAustin]

Welcome brain squeeze! If you haven't seen them yet, there are two excellent resources here that might be helpful:

http://www.early-retirement.org/forums/f47/some-important-questions-to-answer-before-asking-can-i-retire-69999.html

and

Early Retirement FAQs - Early Retirement & Financial Independence Community

We'll do our best to answer your questions also - lots of friendly and knowledgeable folks hang out here!

 

[cooch96]

I suspect once your workload/stress goes down, your health will improve. But I'm not a doctor.

Welcome to the board! It sounds like you've done well and have harnessed momentum. Congratulations!

 

[rkser]

Hi Doc,

I retired last year at age 59 from solo private practice after selling (Under sold) it to a group.

NO DEBT, no mortgage when you retire is what I would suggest. Pare your commitments down as much as you can before you take the leap.

Good Luck

 

[EastWest Gal]

Doctors are in an excellent position to go part time/independent contractor/locum if they want.

I have found that full time practice as an employed physician always resulted in overwork--too many days in a row, too many hours, etc.

Eighteen months ago, I went from full time to part time, though I intended to retire, due to an emergency physician shortage in my group. Then I went to full independent contractor with the group. My pay doubled, but I pay self employment taxes and get my healthcare through ACA. I can probably look into health insurance through other organizations or on my own, and will do so next year.

Your health insurance premiums will be based on age and smoking and that's it. Deductibles and out of pocket are where your problems lie. You may want to get some quotes or browse the exchanges online to figure those expenses.

One thing you want to do is get your malpractice insurance covered. If you work with a locum tenens company, they cover your expenses including travel, housing, and malpractice.


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[outdoorgirl02]

Welcome! I have ongoing health issues that sound similar to yours - some diagnosed, but one that isn't and requires endless tests at the moment. I have been self employed for 10 years. The health plan I bought this year through Anthem's website (not ACA) is around $470/month, has a $1250 deductible with 10% co-insurance after that. Out of pocket max is around $6800 for the year. I think it's great coverage for the price and the premium is tax deductible if you are self employed. I am about the same age as you. Don't let health coverage deter you from retirement!

 

[Richard4444]

Welcome brainsqueeze. Financially, you should be fine, as you get to choose when to quit and your resources are in good shape. IMHO, what you mostly need to consider is these 10 day stretches having a stressful negative impact on your undiagnosed medical condx. In your early 40s, these are likely do-able, but not as you get older. From the limited amount of info you provided, I would think about implementing the part time option at some point. Or get properly diagnosed.

Rich

 

[papadad111]

hello

I would shoot for. 28- 30x , paid off home and transition to a part time gig by age 45 - this part time work can be used to cover your ongoing expenses so as to avoid drawdowns til maybe age 50. You might find a network that pays you as a contractor and can get health insurance through them.

Medical profession is interesting. Many shortages and as an incentive do offer health coverage - eg, friend is part time RN and got health coverage via the group she works for @ just 24 hrs per week- which is all she wants to work - and was a nice benefit that's probably more important to her than $$ income.
The rest of her income is used to fund a 401K and HSA and then some mad money to spend on fun stuff.

For others, ACA solves the coverage issue - it's just a matter of the premium and deductible/OOP expense now.

500k for kids school may be more than most but I can fully understand why on that front too..

 

[EastWest Gal]

If you want to get an idea of how many unfilled vacancies there are, and how many locum opportunities there are, check out this website:

locumtenens.com

Once you see how many openings there are you will be amazed.

And if you can cut back even a little bit it will help your health.


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[brainsqueeze]

Thanks for the welcome!

It is not achievable nor do I think it is necessary for me to reach full FI in order to reduce my hours in ~3 years. If we start with 25x at age 45 we should have 50x by 65... it's hard to see how things could go very wrong in that scenario. This presumes we both continue to work enough to pay for current expenses (about 1/4 or 1/3 time for me, and she works 1/2 time and doesn't plan to stop).

My next step is to draw enough cash from a muni bond fund paying 1.45% to pay down my 30 year 3.625% mortgage, getting the payoff date about 8 years closer (so 19 years from age 45, ie 64, rather than 72). This is part of the reason our multiple will drop from 30x to 20x (the other being the higher mortgage). I wonder about the wisdom of this. On the one hand, it won't reduce monthly expenses; on the other hand it makes 'full retirement' at age 65 a breeze. The impact on liquidity is not significant.

Then we have some large one-off purchases (a new vehicle, a travel trailer for camping in as my knees and back have made tent camping a no go and we really love to do this, and some minor home remodeling) to make which shouldn't impact our ongoing monthly expenses too much but will probably use up a year's worth of all cash flow outside of usual tax-deferred retirement savings, which we will continue to make.

So it looks like:

42 - all excess cash toward one-offs
43 - excess cash toward taxable investing
44 - same
45 - same, then early retire.

I believe we are done with 529 investing. Don't want to overfund any pay a lot of taxes and penalties. College itself will be paid for from the 529s, taxable investments, and cash flow as needed. When the kids get to college, for those 7 years I will work more if necessary, to ease cash flow. Hopefully it will not be necessary!

Thank you for the feedback and your wisdom, and I'm open to any more if the additional facts are helpful.

 

[StuckinCT]

Sounds like you are on track. I am currently partially retired as I have sold my business, still working in a consulting role.


Regarding healthcare, we currently pay $13k a year with a $6k deductible which is easily used with a large family. I find it outrageous that our cost of healthcare has gone up so much while others are subsidized. Definitely not what our founding father's had in mind; if you are responsible you are penalized today. Hope they get to the bottom of your health issue too and good luck.