Advertiser disclosure

Terms and Restrictions Apply
Physician on FIRE has partnered with CardRatings for our coverage of credit card products. Physician on FIRE and CardRatings may receive a commission from card issuers. Some or all of the card offers that appear on the website are from advertisers. Compensation may impact on how and where card products appear on the site. POF does not include all card companies or all available card offers. Credit Card Providers determine the underwriting criteria necessary for approval, you should review each Provider’s terms and conditions to determine which card works for you and your personal financial situation.
Editorial Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed, or approved by any of these entities.

4 Physicians Revisited: Dr. D & The Impact of Lifestyle Deflation

It’s time to tinker with the hypothetical life of another one of our 4 physician friends.  Doctors Anderson, Benson, and Carlson have taken their turns, so we’ll turn our attention to Dr. Dahlgren. 

To recap, Dr. D was a big spender, with an annual budget of $200,000.  When your salary is $300,000 and you’ve got to pay taxes, there isn’t much left at the end of the day for saving.  In fact, after funding a 529, he only had $4000 left to put in his 401(k) every year.  At least his employer was contributing $16,000 in profit sharing and match to his 401(k). 

With only $20,000 in annual tax deferred savings and a high rate of spending, Dr. D was on track to work more or less indefinitely. 




After a lousy round at the country club, Dr. D looked over PoF’s analysis and didn’t like the numbers he saw any more than the double bogies he recorded on the course.  One of his buddies in the foursome was 18 months into fighting an unfair malpractice claim, and another just learned that his 56-year old brother was diagnosed with pancreatic cancer.  Dr. D worked hard to pay for his club dues, private school tuition, and the precious pony’s stable fees, but he couldn’t see himself keeping it up forever.



Answer quick MicroSurveys for cash. Designed with convenience and timeliness in mind, 70% of surveys are answered on a mobile device in just a few minutes.

Physicians, Pharmacists, and other healthcare professionals are invited to join Incrowd today!

Dr. D Undergoes Substantial Lifestyle Deflation


Dr. D had a heart-to-heart talk with his dear wife, and together they decided it was time to scale back on the spending.  Over the course of a year, they traded in their overpriced vehicles, enrolled the kids in public school, started golfing at the municipal course, and sold the beachfront condo.

They weren’t able to let go of all their spendthrift ways, but found they could live quite comfortably and happily with a $120,000 a year budget.  Assuming Dr. D had his change of heart around the time Dr. A became financially independent, 11 years had passed since we first met our 4 physicians.  We’ll assume Dr. D had a 4% real return like his colleagues, accumulating $277,000 in those 11 years.  Let’s see how the 40% reduction in annual spending changes Dr. D’s timeline to becoming FI.





Excellent!  It’s not too late for Dr. Dahlgren to make meaningful changes. He was hoping to be able to retire in this lifetime, and it appears he can now afford to retire in his fifties.  The $80,000 in lifestyle deflation gave him a smaller nest egg goal and allowed him to save an extra $102,000 per year.  Financial independence can now be achieved in about 13 to 18 years with reasonable market returns.

Dr. D also gains the advantage of tax diversification.  In his first 11 years, the only retirement savings was in his 401(k).  All of that would be taxed upon withdrawal. 

Now, he’s got Roth money which will never be taxed again, and HSA money that will be treated the same if used for healthcare.  He’s got funds in a 457(b) that can be accessed if he opts for an early retirement, and a sizable taxable account that may not be taxed at all in retirement.  If he plays his cards right, he could potentially have many years of zero federal income tax in retirement.

Which Doctor are You?


In order to learn something from these posts, you should be able to compare yourself to these physicians.  Does your situation more closely mirror Dr. A, B, C, or D?  Or none of the above?  In what ways are you different?  How much do you spend in a year?  No idea?  Start keeping track or work backwards by subtracting your after-tax investments from your take-home pay. 

How much do you invest in a year?  How much are you paying in taxes, and can you improve your tax situation?  The answers aren’t that difficult to come up with, but they do require some time and attention.  I’ve created a spreadsheet you can use to calculate your own savings rate here.  

When you’re equipped with pertinent financial information, you’re better able to look at the big picture.  You can reflect on what’s most important to you and decide what you want your life to look like in 5, 10, or 20 years.  Your priorities and vision of your ideal life will evolve and change with time, and so will your plan. 

I think and blog about an early retirement, but I can’t promise you I’ll follow through with it.  It sounds pretty sweet right now, but my priorities may be different 5 years from now, and I reserve the right to grab the rudder and change course. 

Do you know someone like Dr. D who spends two-thirds of his salary, saving next to nil?  Apparently there are many Dr. Dahlgrens out there.  According to a Fidelity study, nearly half of physicians are saving less than 15% of their income, and 71% do not contribute to a non-qualified plan, such as a 457(b).  I find it worrisome to imagine such a large percentage of our physician workforce working past retirement age out of necessity. 


How about you?  Do you know your savings rate?  Would you be able to make drastic changes like Dr. D if necessary?  Comment below!

Follow this link for the rest of the 4 Physicians series.

Share this post:

5 thoughts on “4 Physicians Revisited: Dr. D & The Impact of Lifestyle Deflation”

  1. My name is sarah williams,All thanks goes to Dr.uduebor for saving my
    marriage from toning apart.i feel so grateful and only have good words
    about a powerful spell caster named Dr.uduebor who helped me bring back my
    husband. We had been apart for 4 months, at first I was thinking if I was
    doing the right thing by contacting a spell caster, but I so much love my
    husband and won’t give him up for anything in this world. I decided to
    contact Dr.uduebor through his mail address I found on several testifiers
    messages online,and I told him about my situation, he laughed and told me
    my husband will be back to me in the next 48 hours. I felt it wasn’t going
    to happen at first until my husband called me and was so eager to have me
    back more than anything on earth.. Now we are together and him cant do
    without me,and both of us are happy. I feel so happy sharing this testimony
    because there was no negative act attached to his work. His work was smooth
    and fast. Thanks to Dr.uduebor for bringing back happiness to my life. I
    swear with my life that Dr.uduebor is a man to trust and take your problems
    to. You can contact him on his e-mail if you really truly want your love
    back.(..drudueborsolutions@gmail.com or whatsap him +2349037541959

    10*HIV CURE

  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. I met someone once who was in his late 50’s making $200k and he could only “afford” to save about 3% of his salary per year. He actually thought he could retire in 5 years and was completely oblivious to what kind of assets he would need to maintain the extreme spending of his current lifestyle. I have no idea what happened to him but I can’t imagine he is going to be living the lavish retirement lifestyle he was envisioning.

    • Hopefully, he had a wake up call and “deflated” his lifestyle prior to retiring. Cutting back after years of high spending can be not only difficult, but humbling, or even humiliating. Thanks for sharing!

  4. Thanks for these interesting posts. I found your blog from the MMM community, where I lurk regularly, but our income more closely mirrors the physicians you discuss here than most folks on MMM. It’s nice to see how other high earners deal with these situations, and the dramatic swings that can be affected by some simple lifestyle inflation or deflation. I’m looking forward to digging in on your tax post next–always such a challenge with high-income.

    • You’re welcome, and glad to see you found me via MMM. I can identify with many of Pete’s philosophies, and his blog was the first one that got me thinking about the concepts of FI and RE.

      By far and away, the best way to reduce taxes is to reduce taxable income. Retirement does that. Contributing the max to tax deferred retirement accounts does that. Most other strategies involved spending money to save on taxes (mortgage interest, charitable giving, etc…) Tax loss harvesting is a useful and poorly understood tool that can be utilized. At some point, I’ll write about my TLH strategy.


Leave a Comment


Doctor Loan up to 100% Financing

Related Articles

Subscribe to Physician on FIRE

If you do not see a subscription box above, please navigate here to subscribe.

Join Thousands of Doctors on the Path to FIRE

Get exclusive tips on how to reclaim control of your time and finances.