PhysicianOnFIRE Guide to Retiring at 45

I have met at least two physicians over the years who told me they planned on retiring at age 45.  We humans seem to like to measure things in multiples of five, and 45 is probably the earliest milestone age that a physician can realistically and comfortably retire. 

M.D. Financial Services

The first of these two physicians was a pediatric chief resident who worked with me when I was a third year medical student.  He had at least 15 years to go but already had the perfect sailboat chosen to sail the ocean blue.  Another was an anesthesiologist I worked with a few years ago when I was doing locum tenens work.   He only had a few years to go before reaching the milestone, but he also had an affinity for Porsche vehicles and his first baby on the way.  My guess is he may need a few more years, but I hope for his sake he proves me wrong.

Retiring at 45 ain’t easy for anyone regardless of profession.  It’s especially tough when you’re in debt to your eyeballs when you get your first decent paycheck sometime around age 30.  But, with proper planning, it can be done.  Depending on where you’re at, it’s probably too late to do all these things without a fully functional flux capacitor, but anyone can start to take control of his or her finances.  So how do you go about retiring at 45?


Don’t overspend on college. 


You don’t need to go to a prestigious undergraduate school to get into medical school.   It’s far more important to do well at your chosen school, score well on the MCAT, volunteer and/or do research, and show genuine interest in medicine.  And once you’re in, the slate is pretty much wiped clean.  You’re on the same level as your classmates, and almost all of you will go on to earn an M.D. 

The flagship public university in my state charges about $7,000 a year in tuition and fees.  A select few private colleges now charge over $50,000 a year.  Will you have a “better” experience at Tufts University compared to State U?  Depends on how you define “better”, but I’ll bet it won’t be seven times better, and I guarantee it won’t give you a sevenfold advantage on your medical school application, if any.

If your parents foot the college bill regardless, your college choice may not play a role in your ability to retire at 45.  Conversely, if you actually pay full sticker price for a private college or university (few actually do) and you do it all with loans, you’ll be starting medical school with debt that will continue to grow for many years.


Try not to overspend on medical school.


This can be trickier as most matriculants have fewer options compared to undergrad.  Paying in-state tuition at a public medical school may not be an option.  You may want to go to a top tier medical school, or may be forced to take what you can get.  But, if you have options or can obtain a scholarship, try not to overspend here.  If you have no choice, take comfort in the fact that you’ll be 4 years closer to an attending’s salary when you finish racking up that massive debt.

A resident’s salary is pretty close to the average American’s salary.  Hourly, it stinks, but $45,000 to $55,000 is enough for a decent life in most locales.  An apartment in a decent part of town.  A used car and gasoline to keep it going.  Groceries, the occasional restaurant meal, happy hour on Friday, etc…  You won’t be saving much and that’s OK.  In the first few months after residency, you’ll be able to set aside as much as you could from scrimping during several years of residency.  If you’re able to max out a Roth IRA throughout residency, that’s awesome.  But I wouldn’t blame you if you didn’t try.  Dollars will be much easier to come by soon enough. 


a couple favorites

On the other hand, residency is not the time to start living like a full fledged attending physician.  I had friends in residency driving Infiniti, BMW, Mercedes, etc…  a vanity plate doesn’t look half as good on a Chevy, am I right?  If you want to even think about retiring at 45, you must live like a resident when you are a resident.

Once you finish, you’ll be used to working hard and spending little.  Keep doing that for at least a couple years.  Pay off some loans.  Fund that IRA / 401(k) / HSA.  Sure, reward yourself a little, but keep it within reason.  Take a nice vacation; have a dinner at the fancy steakhouse.  Buy a case of your favorite wine, double IPA, or single malt scotch.  Buy the name-brand Chicken-in-a-Biskits.  Upgrade your lifestyle to that of a fellow making $60,000.  But hold off on the McMansion and the Humvee.  Those can easily erase any hope you might have had of retiring at 45.


Say Thank You” for the free meal, then walk away.


Savvy insurance salesman have aligned themselves with medical schools and residency programs.  You will probably have several opportunities to enjoy some good tapas or strip steak on their dime.  By all means, go for it.  Free steak is as about as frugal it gets, and I’ve found most of the advice at these gatherings to be pretty good.  Of course, the free advice comes with a side of sales pitch.  It may be subtle, but the goal is to obtain you as a client.  Initially, they may help you with products you should have anyway, like disability insurance and term life.  If you need those and have the ability to comparison shop, then the host may be a good resource for you.  But don’t invest in anything costly that you don’t understand (whole life insurance, variable life, etc…). 


Choose wisely.


When Indiana Jones chose the holy grail, it was important to choose wisely.  Things did not end well for the man who did drinketh of the shiny cup. 

“Choose wisely” should apply to your choice of a partner. I’m not saying you should fall in love based on the relative frugality of your date, but if you want to retire at 45, you’d best avoid marrying one of Kanye’s Gold Diggers.  Financial disagreements are a huge source of marital discontent, so it’s best to marry someone who shares at least some of your financial ideals and goals and understands the importance of setting a chunk of that paycheck aside for your glorious future together.  Many a physician’s retirement plans have been foiled by a spendthrift spouse.  If you don’t see eye to eye, opt for counseling.  You may find a happy medium and get back on the same blissful page, and well, divorce will completely derail any hopes of retiring at 45.

The “choose wisely” mantra also applies to location.  In medicine, there seems to be an inverse relationship between cost of living and potential income that doesn’t exist in other fields.  Physicians in middle and rural America, where housing and other costs tend to be lower, typically have higher salaries than physicians in population centers along the coasts.  If you can take advantage of this geographic arbitrage, you will have a much better chance of retiring at 45.

The same is true for housing.  It’s really tough to resist buying or building your dream home when you land a job out of residency, but it’s a really good idea to rent for awhile.  You may not be satisfied with your job, your colleagues, or administration.  They may not be satisfied with you and the promised “partnership track” is a Road to Nowhere. 

You probably don’t know all the neighborhoods, where the best schools are, are where it might be most convenient for you to live.  When you have been around a couple years, buy yourself a nice home with a low-interest 15-year mortgage.  It’s not unreasonable to spend a couple years’ salary, just don’t go for the most home the lenders will allow. 


Learn about Personal Finance.


Financial decisions can seem daunting and it can be as complicated as you want it to be.  You don’t want it to be complicated, so keep it simple and educate yourself.  You’re a physician; you are intelligent and you’ve proven to be a good learner. 

To help you, I’ve written a 20 Step guide to Effective DIY Investing. Step 1 is to start with a good book. 

My introduction to personal finance was Andrew Tobias’ The Only Investment Guide You’ll Ever Need.  A physician would be well served by Dr. Dahle’s The White Coat Investor: A Doctor’s Guide To Personal Finance And Investing. 

For great general investing knowledge, turn to The Bogleheads’ Guide to Investing.  For retirement specific issues, check out The Bogleheads’ Guide to Retirement Planning.  Once you have a fairly good general understanding, and you have specific questions, look to the Bogleheads® wiki or ask a question on the Bogleheads® forum.

Investing a little time to understand personal finance will save you a lot of money in the long run.  Odds are you’ll be better off handling your money on your own compared to deferring all those confusing financial decisions to your colleague’s money guy. 

It is astounding how much of your nest egg can end up in someone else’s hands if you let them make decisions for you.  According to Personal Capital, the range is $500,000 to over $900,000 over 30 years for someone with a $500,000 portfolio with overall fees ranging from just over 1% to just under 2% per year (full white paper here).  I’ve also shown how high fees can result in millions lost over a lifetime. You can easily construct your own simple portfolio with a low cost fund family such as Vanguard with total fees under 0.1% per year.

Act like the smart person you are and learn a little something about personal finance.


Develop a plan and stick to it.


If you want to retire at 45, you can’t afford to make too many mistakes.  I’ve made a couple, but thanks to a long-running bull market and a well compensated chosen specialty, I’m easily on track.  If I had listened to someone like the current me ten years ago, I’d be in even better shape. 

The specifics of your plan will vary depending upon your personal situation, but there are some general ideas that should be included.  Try to pay down debts, particularly those with high interest.  Fund your available retirement plans to the max, taking advantage of any available employer match. 

If you buy a home, look for one of the nicer homes in a decent neighborhood. Anecdotally, you might be happier in a $400,000 home surrounded by $300,000 homes than you would be in a $500,000 home surrounded by $600,000 homes.  And the neighborhood full of $600,000 will have a lot more of the pesky Joneses with fancy toys in the driveway tempting you to get your own Yetti ice house.

Use new money to accelerate your retirement savings.  You receive a raise, new money!  You pay off your school loans, new money!  You made partner, new money!  Don’t use the new money to increase your lifestyle, use it to increase your savings. 

Before your upgrade, you were putting $3,000 into a taxable account each month, now you can afford $5,000.  When you pay off the 15-year mortgage early, you can do $8000 a month.  Now you’re getting somewhere!

Know your expenses.  I’ve written about this elsewhere, but your retirement nest egg needs to be a multiple of your anticipated retirement expenses.  Keeping those expenses low is a double win.  You’ll be saving more quickly to reach your goal, and your magic goal number (let’s say expenses x 33) will be lower.  That, my friends, is a win win. 


Track your progress


Are you on track to retire at 45?  Or ever?  I use 2 websites and 2 spreadsheets to help me figure this out.  The sites are Mint and Personal Capital.  One spreadsheet shows my mutual fund holdings, real estate, brewery investment, etc..  The websites can do this (in fact I use Personal Capital to update my spreadsheet), but my own sheet is infinitely flexible unlike the 2 sites.  My other spreadsheet is full of projections.  I use a compound savings calculator  to project where my balances will be in 2 year increments based on different interest rates.  It’s a little bit of work, but I find it fun, just like writing these articles.  Speaking of fun…


Don’t forget to have fun!


My prescription of state schools, reading, and not spending might sound super-lame.  It’s easy to get caught up in the dollars and cents and forget that it’s OK to let loose and have a little fun sometimes.  I believe that having fun doesn’t require massive spending.  Some fun things are really expensive, but there are a million ways to have fun that don’t cost much.  Mr. Money Mustache seems to have a lot of fun spending about $25,000 on his family of 3 annually. 

My spending on a family of 4 seems to be nearly triple his, but I’m still spending a lot less than my physician (and some non-physician) friends.  I just don’t want to walk away thinking you have to live like a loser to retire at 45.  I feel I’ve had a ridiculously fun time throughout the years, and I haven’t sacrificed my future one bit to do so.

When you do loosen up the purse strings to spend a little extra, spend it on experiences, not things.  My wife and I take this message to heart, having traveled to places like the Galapagos Islands, Japan, Alaska & Hawaii, Europe, the Caribbean, and around our own great nation.  Yeah, I’m showing off a little, but in an attempt to illustrate that a life of relative frugality does not have to be boring.  


You don’t have to do it all.


It may be too late to avoid school debt; you might have no clue what your annual expenses are.  One of the reasons I chose age 45 is that it gives you about a several  year cushion to absorb the blows of a less than perfect plan, assuming you became an attending physician in your early 30’s.  In A Tale of 4 Physicians, Dr. A was on track to retire in about 10 years. 

Personally, I could have retired before my 40th birthday with a 4% safe withdrawal rate, despite making some costly mistakes and having a fairly rudimentary understanding of personal finance until quite recently.   A high-paying specialty and a quick recovery from a down market early in my career helped make up for a few missteps.

It’s best not to go overboard on cars, boats, and hobbies that might erode your ability to save.  But you don’t have to live like a pauper, either.  Do most of what I said, and a couple things differently, and you’ll likely be in great shape.  If not, you might have to wait until you’re 50 or 55 to retire early.  It’s not too late to change course (well… perhaps it is if you’re already in your sixties).

What do you think?  I think I could have written a dozen more paragraphs telling you not to spend frivolously, but that advice seems fairly obvious.  In fact, everything I’ve put on the screen in front of you is pretty straightforward, but if you polled 100 forty-year old physicians, I’ll bet more than 95 of them would have no hope (and perhaps no desire) of retiring in 5 years. If you have the desire and the youth to make it a reality, you now have a roadmap. Godspeed.


  • Raddoc

    Found your blog via WCI forum. Nice job so far.

    I am also aiming for financial independence by age 45 (age 40 now). In a high-paying specialty as well. NW is over $3mil now…aiming for over $5mil NW by age 45 before going to part-time with dream goal of over $10mil NW by 50 (but realistically 55).

    Goal is to work part-time after 45 to cover living expenses and still save a smaller am’t (but prob. still more than average American) and let compounding do the rest of the work until 55.

    Looking forward to more interesting posts.

    • You are killing it! I may be in the top 10% of physicians ate age 40, but I’d put you in the top 1%. Great work.

      I used to dream of an 8-figure net worth, but I’ve realized I’ll be very comfortable with 1/3 to 1/2 that amount, which I should have in the next 5 to 9 years. We’ll see how I feel about it when I get there.

      Part time work can be a great option for high net worth individuals who are not interested in retirement. You can expect to see a post about it in the future.

  • Wannaberetired

    Great job on your blog so far, it’s nice to know there are other physicians with similar goals and philosophy on life. I’m a rad who gave up partnership and full time work 5 years ago to work part-time tele radiology and move back to California. The goal was to completely retire at 45 which was 2 months ago… Not sure if it is OMY syndrome or I’m just a big chicken, but I haven’t done it yet. I have a similar AA to you with invested assets of about 2.6 as well as a paid off rental that nets 2500/mo, paid off primary residence and well funded 529’s for the kiddos. Our annual spending now is about 65k/yr, which would go up some for health insurance. Ironically, we would qualify for a sizable subsidy and the kids would be required to be on medi-cal. Our expenses could be easily covered by div, interest and rental income, so we shouldn’t eat into principle. The spend rate from the invested assets would be about 2%. The real reason for my hesitation may be that I have a wife that is not overly excited by the idea of early retirement as well as three kids ages 9-15 that I will be responsible for at least a couple more years. Bottom line I think it is hard to walk away from a lucrative career especially one that would be difficult to return to after a few years even when it seems you have enough.

    • Welcome, Wannaberetired! It looks like you’re in a great shape. I don’t think you need me to tell you that you are in a great position to retire IF that’s what you want to do. If you just turned 45 two months ago, you’ve still got nearly 10 months to retire at 45, so it’s certainly not too late.

      When I turn 45, my boys will be 9 and 11. Like you, retiring won’t give us the freedom that a retiree with an empty nest will have. And health insurance will definitely be a factor. I’ll investigate our options more closely when the time draws near.

      I completely agree that a high income acts like golden handcuffs, making it more difficult to walk away. I figure every year I work in the next 5 years will add on average about 20% to my nest egg. There are a couple interesting threads on the MMM forum, here and here, that address this paradox. The salary makes it easier to become FI, but tougher to RE.

      If you contribute to charity and haven’t started a donor advised fund, I highly recommend doing so before you retire. Put a large sum in now for the tax deduction, then give over time when you are retired in a much lower tax bracket

      • Dr. FISRE

        I would recommend cutting back on your hours more to the point of just covering your expenses and possibly even save a little every month. $65k per year after taxes should be pretty easy for your job and when your kids are off to college or finish college then you can reevaluate to see if you want to retire or keep working part time.

        That’s more or less my plan. invest heavily up front and then cut down to part time to cover expenses with less saving and letting compounding do the work.

        • Dr. FISRE, Yours is a good plan in theory, but for me, when I contemplate a scenario in which I work just a little bit, I always decide against it.

          There are carrying costs to stretching a career out like that. There are actual monetary and time costs incurred to maintain certifications (for me = ACLS, PALS, BLS,…), state licenses, CME, and MOC. On top of that is the mental / psychological cost of continuing to be exposed to potential litigation, a case gone wrong, another sleepless night, etc…

          If offered one more year of full-time work versus five more years of 20% time work, I’d take the one year every time, then call it good. But that’s just me. You do what works for you.


          • SFI

            I saw this post and wanted to comment. You don’t have to work in medicine part time. There are non-clinical jobs like what your doing now that will provide a nice income without the exposure risk.

            • So true. I do plan on writing about non-clinical jobs at some point in the near future. This one isn’t paying a whole lot, but there is potential. Eliminating the stress and exposure risk can be life-altering.

  • Military Doc

    Hi, PoF, really enjoying your blog. I’ve been a MMM-follower for a while.

    Another path to physician FIRE at age 45 is joining the military…

    I’m planning to retire at age 45 because that’s when I will reach the required years in service for a military retirement. I fulfilled tip #1 and #2 above (don’t overspend on college and med school) by signing up with Uncle Sam. I’m enjoying my time serving as a military physician. Thanks to a good pension plan for retired military members and Tricare (a MILITARY benefit, not a VA benefit as one of your prior posts states) and aggressive saving of my spouse’s salary all these years we should be in good shape when I hit 45. (In our mid 30s now, NW just reached $2M)

    I’m thinking I’ll still do locums after the military for “fun money” and to stay current at least until the kids are out of the house. (If all goes according to plan they will depart when I’m 50…but we’ll see!)

    Thanks for the idea of a DAF. Looking into that actively since we will probably have much more than we need in 10 years…

    • Thanks for the comments. Sounds like you guys are doing amazingly well! I’m glad to hear military medicine has been good to you. We need good doctors to serve our heroes. WCI was in military medicine as well.

      I really enjoy having a DAF, and half of this site’s revenue will be diverted to it. Once you give, there’s no taking it back, which I see as a good thing. You’re not allowed to renege on your noble intentions, but you do get do decide where the money goes.

      Thanks for the tip on the VA & Tricare; I’ll update the post.


  • Hatton1

    I am close to 59 now. I reached FI in my mid-fourties. Making that final trigger decision is tough. I am doing just GYN 3 days per week. This covers my expenses so I have not had to tap the nest egg yet. I still think the greatest unknown for early (prior to 65) retirees is the cost of healthcare. I have a lot of money in taxable accounts so it would be almost impossible to get my passive income to a level where I would qualify for an Obamacare subsidy. My husband is already on Medicare so I just am thinking about my costs. I plan to work until the next shoe falls. I mean some new regulation or requirement that I choose not to deal with.

    • The 3-day workweek sounds great! I would guess you enjoy the work and/or find it fulfilling because you clearly don’t need the job for financial reasons. It sounds like you have enough, and can walk away once you’ve had enough.

      The income level to qualify for an individual ACA subsidy is quite low, under $50,000. It’s closer to $100,000 for a family of 4, which is what I’ll have in my early retirement. Of course, the healthcare insurance landscape could look a lot different in 5 years when I’m 45.

  • Chucktown

    A bit of specialty advice please! My favorite rotations have been PM&R, Psych, and Anesthesia. I basically enjoyed each of these specialties equally, but all for different reasons (i.e. the things I loved in gas I wouldn’t get in psych, but the same is true for the headaches). Looking on and comparing that to AMA reported incomes for the other two it seems like Anesthesia is the most prudent choice. Do you agree with this? Do any later career clinicians around here have an opinion about the future earning potential for these careers?

    • That’s not a quick or easy question to answer, but I’ll do my best. The 3 you chose are very different in terms of workday and lifestyle. I chose anesthesia and I think it was the right choice for me. I would never suggest using salary as the #1 deciding factor, but if you are looking at 2 or 3 different specialties that you like equally, and 1 pays substantially more than the others, it might be a good choice, particularly if financial independence is high on your list of priorities in life. But be sure to weigh all other factors first and try not to let salary influence how you look at those other factors.

      More salary information in the Medscape Compensation Report if you’re interested.

      A couple things worth noting among the 3 options you’ve presented. PM&R physicians are eligible for a pain management fellowship (as is anesthesia) so there is some overlap there. If you like PM&R but want the opportunity to do procedures and increase your income, that opportunity will exist.

      Anesthesia does pay more, but there are reasons for that. Much of what we do looks routine and in a way becomes routine, but you will be supporting patients in true life and death situations on a pretty regular basis. You can mitigate your exposure to the most stressful situations to some extent based on the facility in which you practice, but you’ve got to be be prepared to keep your cool and perform in high-pressure situations, because you will find yourself in them regularly. This is true of many specialties, but compared to psychiatry and physiatry, much more prevalent in anesthesia.

      If you supervise in anesthesia, you’re often needed in 3 places at once. The first half of my workday can usually be described as controlled chaos. Also, unless you work strictly at an outpatient center, you will be working at all hours of the day and night. Babies and trauma don’t keep banker’s hours, unfortunately. I enjoy the job and the responsibilities that come with it, but it’s not for everyone.

      • Chucktown

        Thank you very much! Don’t worry, salary is certainly not the number one priority for me. Financial independence is definitely high on my list though. I can probably reach FI by 40 if I can clear $200k after taxes unless my lifestyle changes a lot (kids are hopefully in my future so that would probably count as a major lifestyle change). Even then I have to actively work against my saver personality. I’ve been lucky as a med student in the fact that I have really enjoyed every rotation except for Ob/Gyn. Because of that I figured it’s at least not a bad idea to consider the financial aspects of the decision.

        The updated medscape report is very helpful, so thanks for that. I hear mixed reports from the anesthesia residents and attendings about the future of the specialty and what that means for reimbursement. I do love the type of work I’d get to do as an anesthesiologist. The day-to-day variety is great, and my personality seems to mesh nicely with high pressure situations.

        The other thing that’s important to me is time outside of the hospital. I enjoy medicine and am happy to be afforded the opportunity to pursue this path, but I’m not willing to let MD be the defining aspect of who I am. The ability to negotiate whatever work situation I’d like is a big driver for pursuing FI. Ultimately I’m happiest when I’m spending time with family and friends, not when I’m pushing my brain to its max (though the post test high is always nice). I grew up with an Ob/Gyn mom. She was and is a great mother, and she was at every little league game and the vast majority of holidays growing up, but she was pretty clearly exhausted all the time as a result. I don’t want that. Do you think you get enough time off as an anesthetist? Do you feel pressured by partners to not take vacation time? Did you get to read to your kids more than one night a week when they were little? And if I went that path and took a full time private practice job in pursuit of the salary that would easily enable Financial Independence will that mean I live at the hospital? My only exposure to anesthesia is through academic medicine and these folks seem to always be here, though they spend a lot of that time doing research and sitting on various committees neither of which really interests me.

        Sorry that turned into kind of a book. I really appreciate you hosting this blog and making this type of discussion available. In the hospital it’s not really kosher to ask some of these questions so directly.

        • It sounds like you’ve been doing a lot of thinking and you know what you’re looking for. I like your priorities. Working in a community hospital, you can definitely find the lifestyle you’re looking for. You’ll have some very long hours and sleepless nights, but the good jobs give you enough time off to make it worthwhile. Yes, I read to my kids a lot. I actually taught both boys to read before their fourth birthdays and now they read to me. I’ve got a good, flexible schedule, but that isn’t the case with every job.

          If you’re willing to take a pay cut and give up some skills you can only maintain in a hospital, there are career options that involve only outpatient surgery centers. Those are better reserved for the tail end of a career, or after attaining FI. I would guess your mother is pretty close with some anesthesiologists. I would suggest talking to one of her anesthesia colleagues that she knows and trusts.

  • 45 is a great age for early retirement. At this age, one can accumulate the net worth enough for the other pursuits in life. At the same time, you still have a lot of energy to do whatever outside of your profession.
    I am in the dilemma how much extra buffer I need. How you determine that figure after you reach FI?

    • Great question. The easy answer is Zero. Safe withdrawal rates use worst case scenarios (using historical data). Of course, the future could be worse than anything we’ve seen in the last century. Hence, the buffer.

      I’m shooting for at least 40x expenses, which would give us an ultrasafe 2.5% withdrawal rate. If I really didn’t like my job, the target would be lower, but there are some things I’ll really miss.


      • Thanks. I am also aiming around 2%. Maybe a bit too conservative for some. Like most said, it’s not fun to be a Walmart greeter at your 70s, I am pretty sure it’s not fun to do that in your 40s or 50s either…:)

        Compared to 10-20 years ago, now we have more alternative investment opportunities in addition to the equity markets. Plan carefully, it can smooth out the rides along the way.

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