Fat ER or earlier ER?

[Diogenes]

I just hit the million dollar milestone, .... We tuck away about $12k per month to retirement/investment accounts. ...

One recipe, or litmus-test, or whatever moniker we use for making a decision, is to assess annual contributions from salary, vs. extant portfolio. Your portfolio is now around $1M, and your annual contributions are about a quarter of that... ratio of 4:1. That's an enormously powerful incentive to keep working and saving.

Assuming a decent stock market, consistent savings-habits and no enormous increases in salary, you can use your favorite calculators to estimate portfolio-to-savings ratio as the years advance. More common is to use a safe withdrawal ratio or ratio of annual expenses to portfolio, but this doesn't account for opportunity cost. The current suggestion does.

At some point, you might have a ratio of portfolio to annual savings, of say 40... ten times more than currently. Is that "enough"? Subjective, of course! But we can intuit that a 4:1 ratio means a large opportunity cost (not that you'd consider retiring today), whereas 40:1, vastly less so. Pick a ratio that appeals to you, and use that as a criterion.

 

[gcgang]

My PCP who was complaining about too many health questions on my part mentioned that he was still paying loans and he was early 50s. How do you deal with THAT?

Kool-

Your PCP still has student loans because he lives in Hawaii. Illustrative of why HI has such a shortage of docs - make same $ as mainland, have 50% higher cost of living.

 

[Gremlin]

My PCP who was complaining about too many health questions on my part mentioned that he was still paying loans and he was early 50s. How do you deal with THAT?

My brother, an ophthamologist, died at 58. He still had medical school loans he was working on paying off at the time of his death.

 

[Koolau]

Kool-

Your PCP still has student loans because he lives in Hawaii. Illustrative of why HI has such a shortage of docs - make same $ as mainland, have 50% higher cost of living.

Yeah, that's a problem, though people with "decent" salaries (doctors would hopefully qualify for that) can make it in the Islands IF they don't insist on a large house in a top tier neighborhood.

Most people who live in Hawaii understand that much of what they are paying for is Hawaii itself (the beauty, the amazing weather, beaches, sun, surf, mountains, etc.) SO, I was more than willing to live in a 1000SF condo instead of a 2700 SF SFH.

A good friend of mine (now deceased) moved to Hawaii with $63 in his pocket in 1973. He planned to live on the beach but found a sales j*b right away. His boss floated him enough to rent a small place and the rest is history. You pretty much have to WANT to live in Hawaii to live here - if you w*rk for a living. Otherwise, you're better off on the mainland. Heh, heh, I waited for retirement.

 

[dirtbiker]

No offense taken. I try to be as frugal with my time and my PCP's time as I am when buying something. I used to take a list to my PCP and he would always compliment me on my thoroughness in asking questions. The next PCP gave me the "lecture" I described. So I suppose there could be "that doctor" as well as "that patient." No offense intended.

I'm talking about such things as a new pain in my salivary gland - 2 years after stage 4 thyroid cancer diagnosis, removal and treatment. My current PCP "felt me up" for that issue but had no explanation. So I'm still curious what it might be and he didn't have a clue. I'm okay with that. He's done what he could and doesn't believe I need a specialist or tests. BUT he did listen, he did check and (after literally, months, the pain has seemed to resolve on its own.) Whew!

But my old PCP might have suggested that I come back in a couple of weeks - just so he could "feel my pain." I wouldn't have liked that very much. That PCP became a "Hospitalist" and I hope I never get him when I'm in the hospital.

I understand that doctors are being "squeezed" from both sides - patients and the money people (insurance, clinics, investors, etc.) But I hope we never forget that patients are people too, with all the foibles and fears and pains that come with the issue of being human.

Heh, heh, just one patient's opinion, so YMMV.

As with any profession, there are some excellent physicians, some terrible ones, and most are somewhere in between. Your last PCP may have been on the lower end of that spectrum, it sounds.

 

[dirtbiker]

I'm not in the medical field, but I booked a few virtual MD video calls, and one doc shared that he had close to 30 years ER experience. He was now working from an office or home (I couldn't tell), basically doing video consults all day. Obviously, far less $$$, but seemed like an interesting close-to-retirement gig with a lot less stress.

You couldn't pay me enough to do telemedicine all day. The year or so I was forced to do it during COVID was more than enough. I still have the occasional telemedicine visit, maybe once a month or less, and even that is too much. It's hard to practice good medicine over a video call.

 

[dirtbiker]

OP-you mentioned not retiring with mortgage. If it is under 4% (maybe 5%) I’d rather retire with a mortgage, putting those funds you’d use to pay off the mortgage into your portfolio.

Just because you’ve got a mortgage doesn’t mean you can’t retire.

We just bought our house last year when interest rates were high, so after paying points we're at 4.625%, which isn't bad, especially buying in 2023, but I miss my last 2.5% mortgage!

I completely understand the math of investing in something that will return far more than the mortgage, but I personally won't retire with debts, whether good or bad. Even if it's not the best financial move, the peace of mind of retiring without debt is worth it to me, and that's if it's even an issue. I honestly don't think I'm going to retire before the mortgage is paid off anyhow... just weighing options, and regardless, I've still got years to go.

 

[dirtbiker]

Change to a different PCP.
The OP mentioned in a different thread that he went from a negative net worth due to educational debt to a positive net worth. So the pressure of paying off the loans seems past. Now the goal should be to balance work and personal time so that life becomes joyful again, for the long haul which most medical careers turn out to be.

About five years ago, our net worth was -$200,000. We're ecstatic to call ourselves millionaires right now.

However, I'm still paying student loans. I now work for a non-profit and am paying the minimum necessary for the public service loan forgiveness. The loans won't be forgiven for 7 more years. With the size of my loans, this made the most sense to me financially. Any extra that I would be pumping into the loans to pay them off early I'm putting into investments.

 

[dirtbiker]

One recipe, or litmus-test, or whatever moniker we use for making a decision, is to assess annual contributions from salary, vs. extant portfolio. Your portfolio is now around $1M, and your annual contributions are about a quarter of that... ratio of 4:1. That's an enormously powerful incentive to keep working and saving.

Assuming a decent stock market, consistent savings-habits and no enormous increases in salary, you can use your favorite calculators to estimate portfolio-to-savings ratio as the years advance. More common is to use a safe withdrawal ratio or ratio of annual expenses to portfolio, but this doesn't account for opportunity cost. The current suggestion does.

At some point, you might have a ratio of portfolio to annual savings, of say 40... ten times more than currently. Is that "enough"? Subjective, of course! But we can intuit that a 4:1 ratio means a large opportunity cost (not that you'd consider retiring today), whereas 40:1, vastly less so. Pick a ratio that appeals to you, and use that as a criterion.

Our annual contributions are about $140k, so about a 7:1 ratio. Regardless, this is a good way to look at it. Thanks.

 

[dirtbiker]

Thanks for all the replies everyone!

 

[Stormy Kromer]

I chose to retire early at 50. 8 years later I'm not FAT Fired,...but I've gained a lot of weight.

Now its living a simple life here on my farm with a big garden and freezer full of venison & fish. I drive my old truck and live in a 100 year old farm house that I remodeled. Behind the scenes, DW and I take 2 or 3 international trips a year plus some car vacations. We keep a low profile, few people know.

When I retired from my small business 8 years ago I thought that if I needed money I could go back to work in a lower stress job. Hasn't happened and now I'm confident it won't. If I had worked these last 8 years it would only have damaged my health (mental and physical) and added to Estate planning issues. We're gifting to keep the estate in line.

My tipping point decision when to retire was when I realized "why am I working for money I'll never spend ?"

Haven't looked back.

 

[Koolau]

I chose to retire early at 50. 8 years later I'm not FAT Fired,...but I've gained a lot of weight.

Now its living a simple life here on my farm with a big garden and freezer full of venison & fish. I drive my old truck and live in a 100 year old farm house that I remodeled. Behind the scenes, DW and I take 2 or 3 international trips a year plus some car vacations. We keep a low profile, few people know.

When I retired from my small business 8 years ago I thought that if I needed money I could go back to work in a lower stress job. Hasn't happened and now I'm confident it won't. If I had worked these last 8 years it would only have damaged my health (mental and physical) and added to Estate planning issues. We're gifting to keep the estate in line.

My tipping point decision when to retire was when I realized "why am I working for money I'll never spend ?"

Haven't looked back.

I ignored that calculus - earning money I'd never spend - but the thought often occurred to me. I'd be standing at the soda machine wondering if I should put in a dollar for a 20 oz drink. Was that a foolish expenditure? Then it occurred to me that I was making almost that much in my portfolio just standing there looking at the machine and wondering if I should buy. BUT somehow I put the thought out of my head, bought the soda and soldiered on at Megacorp - mostly because I was still enjoying what position I had carved out for myself.

Conversely, the day Megacrop took that position away from me - I hit the exit, running. I guess it all w*rks out one way or the other and YMMV.

 

[dirtbiker]

I chose to retire early at 50. 8 years later I'm not FAT Fired,...but I've gained a lot of weight.

Now its living a simple life here on my farm with a big garden and freezer full of venison & fish. I drive my old truck and live in a 100 year old farm house that I remodeled. Behind the scenes, DW and I take 2 or 3 international trips a year plus some car vacations. We keep a low profile, few people know.

When I retired from my small business 8 years ago I thought that if I needed money I could go back to work in a lower stress job. Hasn't happened and now I'm confident it won't. If I had worked these last 8 years it would only have damaged my health (mental and physical) and added to Estate planning issues. We're gifting to keep the estate in line.

My tipping point decision when to retire was when I realized "why am I working for money I'll never spend ?"

Haven't looked back.

Sounds a lot like our life. We live on a farm in an older house. We love our livestock, gardening, and hunting. Besides traveling, we don't have a ton of planned big expenses in retirement. But, we do want to spend a lot on traveling.

 

[RetMD21]

I’ve always thought a medical career is more a marathon than a sprint, considering the many years of education it took to get there. A better work life balance is much needed here, at least now that the educational loans are behind you.

True, since medical school is 4 years beyond college (US) and then there is residency and possibly fellowship you are just starting a "real" job in your late 20s or early 30s. Not the obvious path to early retirement.

 

[teej1985]

Yeah, that's a problem, though people with "decent" salaries (doctors would hopefully qualify for that) can make it in the Islands IF they don't insist on a large house in a top tier neighborhood.

Most people who live in Hawaii understand that much of what they are paying for is Hawaii itself (the beauty, the amazing weather, beaches, sun, surf, mountains, etc.) SO, I was more than willing to live in a 1000SF condo instead of a 2700 SF SFH.

A good friend of mine (now deceased) moved to Hawaii with $63 in his pocket in 1973. He planned to live on the beach but found a sales j*b right away. His boss floated him enough to rent a small place and the rest is history. You pretty much have to WANT to live in Hawaii to live here - if you w*rk for a living. Otherwise, you're better off on the mainland. Heh, heh, I waited for retirement.

The cost of housing has skyrocketed though, right? When I search Redfin for 1000 sq ft condos in Honolulu with no land lease, the results are not cheap and a lot of them have some pretty steep HOA fees. A lot of them in big towers, some of which probably have some deferred maintenance...

 

[2017ish]

It's not so easy for me to do a career change. I'm a physician, so I have 4 years of college, plus 4 years of medical school, plus 3 years of residency in learning my trade, that cost me a LOT of money. It would be very difficult to find a new career that would match my salary I'm now accustomed to. I do realize this is a good problem to have, FWIW. If I did find a new career that I enjoyed, I think it would likely cause me to work many more years, and even if I did that, I'd still be a slave to the clock...

****

Ultimately, I don't hate my job, but I am getting burnt out... It's the demanding patients that really take it out of me. 5% of my patients cause 75% of my stress, unfortunately. The other 25% is the administrative/paperwork burden.

Boy, tough call, but you don't need to make it now. ANECTDATA time.

DW was small group, private practice OBG (call every other to every 4th night over the years, and she delivered a lot of her own patients at night regardless of call schedule). She absolutely loved what she did, but we had a long-held goal to travel more than our careers allowed ( I was boutique firm commercial litigator.).

I was looking at numbers for years, kept getting more conservative, and ended up employing extremely conservative metrics (i.e., she is to live to 105, 2% withdrawal to cover our "have to" expenses, zero social security, zero inheritance, etc.). She jokes that I was saying "4 more years" for a decade. "Finally" retired at age 57/56 in 2017. We definitely have a FAT retirement, as we spend the same amount post-tax m/l as we did when working--plus more than that for travel each year. So, double or more the post-tax spending as when we were working.

It has been 7 years of traveling with minimal concerns about our "budget," and it is looking like we made the right call--but if one of us had come up with physical limitations that impinged upon our travel, it would be a different story. You pays {saves} your money and you takes your chances.

 

[Koolau]

The cost of housing has skyrocketed though, right? When I search Redfin for 1000 sq ft condos in Honolulu with no land lease, the results are not cheap and a lot of them have some pretty steep HOA fees. A lot of them in big towers, some of which probably have some deferred maintenance...

Yeah, buying is especially tough in the Islands though renting is "relatively" a "bargain." You are right that HOA fees are high. One thing we didn't realize was just how much w*rk is involved in keeping the grounds of our building nice (also keeping them safe.) A could of times a year, we have tree trimming. Loose palm fronds have to be dislodged and removed - as do coconuts - to prevent hazards. All the walks are pressure washed several times a year to keep them from becoming unsafe (slick when it rains.) It's a constant battle with mother nature to prevent unsightly over growth and unsafe conditions.

 

[wrigley]

Military pension at 58? That must be a military doctor thing?

Mike

 

[ncbill]

Military pension at 58? That must be a military doctor thing?

Mike

Since nobody else responded...20 years until military pension for active duty.

Age 60 for Guard/Reserve...but that can be bought down by active duty deployments a maximum of 90 days annually...one of my kids plans on doing that every year they can so they'll likely be eligible in their mid-50s.

 

[DrRoy]

You are still quite young in the scheme of things. I would wait until you can do it with a 3% WR. That would give you some slack, or allow more spending.

 

[dirtbiker]

True, since medical school is 4 years beyond college (US) and then there is residency and possibly fellowship you are just starting a "real" job in your late 20s or early 30s. Not the obvious path to early retirement.

I took a bit of a nontraditional route to medical school, being a troublesome teenager, then teenage father, then joining the military to straighten myself out. I didn't finish up residency until I was 36.

 

[dirtbiker]

Boy, tough call, but you don't need to make it now. ANECTDATA time.

DW was small group, private practice OBG (call every other to every 4th night over the years, and she delivered a lot of her own patients at night regardless of call schedule). She absolutely loved what she did, but we had a long-held goal to travel more than our careers allowed ( I was boutique firm commercial litigator.).

I was looking at numbers for years, kept getting more conservative, and ended up employing extremely conservative metrics (i.e., she is to live to 105, 2% withdrawal to cover our "have to" expenses, zero social security, zero inheritance, etc.). She jokes that I was saying "4 more years" for a decade. "Finally" retired at age 57/56 in 2017. We definitely have a FAT retirement, as we spend the same amount post-tax m/l as we did when working--plus more than that for travel each year. So, double or more the post-tax spending as when we were working.

It has been 7 years of traveling with minimal concerns about our "budget," and it is looking like we made the right call--but if one of us had come up with physical limitations that impinged upon our travel, it would be a different story. You pays {saves} your money and you takes your chances.

To be honest, I think retiring in our mid to late fifties is our most realistic goal, and if so, it should be a fat retirement, especially since my wife and I will both have pensions on top of our investments. Though my pension kicks in at 58 and hers at 60.

I've also thought about working my last five years for the VA, buying back my five years of active duty time and retiring with a 10 year pension after working only five, which would give me two pensions. Though this would require dealing with government bureaucracy for five years...

 

[dirtbiker]

Military pension at 58? That must be a military doctor thing?

Mike

Since nobody else responded...20 years until military pension for active duty.

Age 60 for Guard/Reserve...but that can be bought down by active duty deployments a maximum of 90 days annually...one of my kids plans on doing that every year they can so they'll likely be eligible in their mid-50s.

Yes, Guard/Reserve retirement with deployments.

Traditional age to collect retirement is 60, but they can be bought down 3 months for every 90 days deployed, starting in 2008.

You can collect a maximum of 360 days per year actually, but they run in 90 day segments. In other words, if you do 315 days, you will only get 9 months of early retirement time, not 10.5 months. It used to be that a 90 day segment couldn't cross fiscal years, or it wouldn't count. Starting in 2014, that changed, and as long as it is 90 days, it doesn't matter where in the calendar it falls (as it ALWAYS should have been).

Unfortunately for me, I got screwed with the timing of my many deployments. I have 40 months of deployed time between 2000 and 2008 while in the Guard. This would translate to 2 years and 9 months of early retirement time (based on fiscal years and 90 day segments). However, because it was prior to 2008, it doesn't count.

I'm not gonna lie, I do get a bit bitter watching guys take easy stateside deployments, often times local where they go home every single night, and it adds to their early retirements... Yet I did combat deployments to Afghanistan and Iraq, as an infantry medic, and that time doesn't count. My longest deployment I was away from home for 18 months in Iraq in the early years of the war. Not that I want these guys not to benefit, but I wish they'd retroactively give me my time...

/sorry, rant...

 

[pjigar]

We were/are in the similar boat as you but a little ahead on the curve: similar NW profile at your age in the past, live on the farm, 50-60% savings rate at your age, split between time and money question, want to spend more in retirement, etc. I have been fortunate to have a job which I have mastered over the years and is not demanding on time part so we have opted to continue to FatFIRE which for us is double than what we spend now. FWIW we are comfortable with 3% withdrawal rate.

If I were were you, I will keep an eye on BS bucket and call it in somewhere between FI and FatFI.

 

[brett]

I changed my career and where we lived several times over my working life. I had a significant job change at age 50 and retired at 59. Always for one or more of the same reasons....I disliked my job, my employer, my position, opportunity.

As it happens, those last nine years were the most enjoyable and rewarding financially of my working life.

Perhaps one difference was that I knew I could walk at any time.