Are Actuaries the FIRE Superheroes?


Who would pose such a question? I don’t suppose it would be… an actuary, perhaps?

If you’re thinking what I’m thinking, we’d both be right. Today’s guest post is, in fact, written by an actuary with an uncommon wit and a penchant for pensions, among other things.

I’ve had the pleasure of clinking pint glasses with the Actuary on FIRE when I happened to be in his neck of the woods a couple of years ago. We spoke of kids, numbers, spreadsheets with other fun people including Laurie from The Three Year Experiment and Liz, the Chief Mom Officer.

I haven’t seen the bloke since, but he continues to post sporadically as he races towards financial independence with a salary that would make many of my physician friends envious. He also recently created a course on FI spreadsheet making, because what else would you expect from an actuary?

Thank you, AoF, for the insightful and irreverent guest post that follows!


Actuary on FIRE


Are Actuaries the FIRE Superheroes?


When you were a kid, did you like to argue over what was the best superpower? Perhaps it was invisibility, or the ability to fly, or maybe telekinesis, but there’s no doubt that you couldn’t be a great superhero without excelling at one or more of these great powers.

But which profession is the superhero of FIRE?

Which profession has nailed all the FIRE superpowers to create the easiest path to financial independence and retiring early?

  • I examine five professions: Actuaries, Physicians, Teachers, IT Professionals and Lawyers.
  • I assess them on four key FIRE super-powers;
  1. Size of income
  2. Natural frugality
  3. Location independence
  4. Investment know-how


The Contenders


I’m going to single out four key professions that are widely represented in the personal finance community; Physicians, Teachers, IT Professionals and Lawyers. It is easy to find blogging or social media niches devoted to each of these groups and you will commonly come across many individuals from these professions in the personal finance space.

I’ve always felt that actuaries are not well represented, but they are a small profession and around 1/20 the size of the body of physicians. However, In terms of FIRE superpowers, I’m bullish that I’ll find that actuaries will punch above their weight!

To give you an illustration of the relative sizes the Bureau of Labor Occupational Employment Statistics from May 2018 has the total number employed as the following:


Profession Number ‘000s
Actuaries 21
Physicians 389
Teachers 1,052
IT Professionals 230
Lawyers 643


As you would expect there are a considerable number of teachers and almost two lawyers for every physician (I’m sure there’s a joke there somewhere…). But very few actuaries – we like to keep a stealthy profile.

We all know that the path to FIRE requires satisfying the equation of a high income combined with low costs and investing the difference over many years. So let’s look at income in more detail.


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Superpower 1 – High Income


The Bureau of Labor’s statistics has data on average wages that I summarize below.

Profession Median Wage 
Actuaries $103,000
Physicians $201,000
Teachers $60,000
IT Professionals $84,000
Lawyers $121,000


These figures look somewhat low to me, however, they are from a consistent data source and I’m not too concerned with the absolute values and I’m more interested in their relative sizes.  

[PoF: I’ll interject that these data sets are usually based on a 40-hour workweek, and physicians tend to work, on average, 50 to 60 hours a week. So the unadjusted median would be 25% to 50% higher, or $250k to $300k, which sounds more realistic. The same may be true of other professions.]

Based on this summary, I bet you are thinking that physicians are the runaway leader and should clearly be the FIRE superheroes.

Not so fast! You’re not looking at the bigger picture of lifetime earning.


Calculating Lifetime Earnings


To examine lifetime earnings we need to take account of speed to the workforce along with professional debt burden. It’s in these two areas that Physicians have it tough; not only is their period of study longer than most (all?) professions but they emerge with a huge debt burden.

Actuaries, on the other hand, can start work straight from a first degree, and can even get a head-start on the actuarial exams during their higher education. The time for actuaries to qualify is around 7 years, but employers sponsor a student’s progress through the exams, so there is a good salary from day one and the employer provides study leave and all education costs.

With discipline and speedy progress through the exams, it’s possible to see a very rapid ramp-up in salary with a concurrent paydown in student debt. There is no reason for an actuarial student to rack up further debt post-graduation.

In calculating lifetime earning, I’m going to assume the following; working to age 65 with a 7 year delay for physicians to reflect additional school and training on a relatively low salary, a debt burden of $200k for the physician, a $30k debt burden for the actuary, the average earnings from the table above and a discount rate of 5%.

It turns out that when you crunch the numbers the lifetime earnings for a physician are only 25% more than that of an actuary’s. That is a much lower differential than suggested by the above median earnings.

Why a 5% discount rate I hear you ask? Only because it’s a gray-suited-serious-kind-of-actuarial discount rate. Had I used a more brash-physician-red-Tesla type of discount rate and gone with 7%, then the lifetime earnings differential would have shrunk to a mere 10%. Barely any difference at all.

At this point, we need to rate our professions against the different superpowers, and to do this we will give a score of 0-3 stars for each category. Some criteria will be fairly easy to assess such as income, and others will be more subjective. However my judgement will be final and I will be adopting the international rating system – the Arbitrary Star Score (‘ASS’).

  • For income, it’s clear that physicians earn 3.0 stars.
  • Given actuaries’ strong showing in the lifetime earnings they will be awarded 2.0 stars, and I’m going to guess that lawyers might be similar at 2.0 stars.
  • IT Professionals receive 1.5 stars
  • And Teachers 1.0 stars.

Physicians are currently out of the gate quickly with a pretty good ASS.


Superpower 2 – Natural Frugality


Clearly, when on a path to FIRE, it’s desirable to keep spending low, but that can be tough as you progress through your profession and enjoy greater material rewards. However, a natural propensity for frugality can be a real benefit, but which professions have it?

I’m going to argue here that all the professions except physicians see relatively gentle progressions in their wages and this steady growth in earnings will support a frugal outlook. Physicians, however, see relatively poor incomes through medical school with a much more significant bump in earnings later in life.

It is this significant bump that can de-rail years of frugal penny-pinching. I’m sure that if I suddenly found myself in a position to now consume much more, then I would ramp up my standard of living.

This is really not the case with actuaries. You can see below a snapshot of wage progression for one branch of the actuarial profession. There is no real cliff-edge between being unqualified and qualified, it is more of a gentle progression as you pass exams and gain seniority.




Actuaries are not generally flashy, they are often your typical math-nerd types. You don’t need the interpersonal skills of a physician for most actuarial work, so I think this introspective tendency lends itself to frugality and I will award physicians 1.0 star and actuaries 2.0 stars.

I think there is no argument that Teachers are generally frugal in comparison and so receive 3.0 stars, and I yet to meet a frugal lawyer so I’m gonna give them 1.0 stars and programmers are somewhere in the middle with 2.0 stars.


Superpower 3 – Location Independence


In this context, location independence means your ability to practice your chosen profession in an area of the country that you wish with a low cost of living. You could be the most frugal person in the world, but if your profession requires you to work in New York or San Francisco then your FIRE plans could get blown up. So I think this deserves a category in its own right.

The Bureau of Labor came up trumps again with their data, and they supply the number of professionals and wages split by state so I started to crunch some numbers…

I wanted to measure income disparity across the country for each of the professions and weight that by the number of professionals in that state. A perfectly equitable distribution would have an equal number of people in a profession living in each state and all earning the same wages. In this case, you would have a fair chance of being able to move to a low cost of living state.

However, income distribution is not equitable for any of the professions and the most common measure of income disparity is the Gini coefficient. I’m always amazed at what I learn by blogging, and I learned that calculating the Gini coefficient is a huge pain, so I’m going to do things visually with a chart. (For the technically minded the curves I’ll show are the Lorenz curves, and the Gini coefficient is calculated from the area under the curve. 

In the chart below, the straight green line shows the perfectly equitable situation I described above. The extent to which a curve dips below this line show the disparity in income across the states.


lorenz curve


You can see that lawyers have the most un-equitable distribution. It is particularly steep at the end and you can see it goes through the point 90% and 50%. This means that 50% of the income power is distributed among 10% of the states. If you are a lawyer then the biggest opportunities by far are in Florida, District of Columbia, Texas, New York and California.

Not only do these areas have the highest number of lawyers but they are the best paid. If you want some geographic flexibility, then working as a lawyer provides the least flexibility.

By comparison, the other professions are more flexible, however none of them exhibit anything close to a geographic equitable distribution. In terms of stars I will award;

  • Actuaries 1.5
  • Physicians 2.0
  • Teachers 2.0
  • IT Professionals 2.0
  • Lawyers 1.0

The final FIRE superpower is investment know-how. It’s no good earning a barrel-load of money, being frugal and living in a low cost of living area if you make poor investment decisions.



Superpower 4 – Investment Know-How


In my research on financial literacy, there seems to be agreement that the public, in general, is pretty challenged around investment and personal finance issues, but I’ve not been able to uncover any research on the differences between the professions. So I will have to rely on my own personal prejudices.

Physicians…. what can I say? if there wasn’t a problem, then there would not be this proliferation of personal finance blogs aimed at doctors. I mean, how many equivalent blogs do you see aimed at actuaries?

There’s a reason for that. Physicians are not taught personal finance and investing, whereas actuaries have years of grueling exams on precisely these topics.

To illustrate how disinterested actuaries are in personal finance, here are the number of posts devoted to certain topics obtained from one actuarial online chat forum.


actuary discussion forum


You can see that actuaries would much rather talk about almost any other topic than personal finance. Given investments is their day job they would much rather talk about Game of Thrones (the predominant contributor to the 2.5M posts in “Non-actuarial topics”).



Consequently I’m going to award physicians 1.5 stars and actuaries 3 stars.


In terms of investment know-how, I feel that lawyers are a little worse than physicians with 1.0 stars and teachers are on a similar level to physicians with 1.5 stars. I think IT professionals have the math chops and the time to devote to learning this material and so I’m going to place them at 2.0 stars.


FIRE Superhero


It’s time to check out the size of those ASSes!

Actuaries 8.5

Physicians 7.5

Teachers 7.5

IT Professionals 7.5

Lawyers 5.0


I think you guessed that result was a foregone conclusion with actuaries leading the field with 8.5/12. Physicians, teachers and IT Professionals are not far behind with 7.5/12, however, lawyers are lagging the pack with sub-par FIRE superpowers. Perhaps they are destined to work forever!

I’m fully expecting the comments section below to be in eery silence as readers digest the power of this finely honed argument and the irrefutable conclusion. However, if you want to comment below to perhaps offer your moral support to lawyers or congratulate actuaries then that’s acceptable.


Actuary on FIRE is not actually on fire but blogs at and by day provides investment and pension consulting to corporate America.

He has recently released a new online course – Create a kickass financial independence spreadsheet and PoF readers can enjoy a limited-time discount of 50% with code POF500, bringing the cost of the course down to the price of about two lattes.


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What do you think? Are actuaries the true FIRE Superheroes? If not, what profession beats them? What would the Arbitrary Star Score on a 0 to 12 basis?

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21 thoughts on “Are Actuaries the FIRE Superheroes?”

  1. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  2. Fantastic article, it’s rare to find an actuary with a sense of humor and talent for writing, but AoF fits the bill. My new favorite blogger.

    I reckon the downside to actuarial studies is an inability to turn off the optimizing machine between the ears.

    Can’t enjoy a movie without looking at all of the probabilistic outcomes of what the main characters might do and likely always cognizant of what that hangover is doing to life expectancy.

  3. Initially I thought it’s a pain in the behind to be made the butt of the joke, but with hind-sight I re-ass-essed and I think the bottom-up comparison of lawyer ASS to other ASSes is accurate and could help young, rosy-cheeked attorneys-to-be see things from the back end and give them the shot to the keister they need to get off their rump and pursue FIRE with the benefit of the knowledge of those of us who can see this from the backside. Hindquarters.

    Seriously, though, I immediately assumed this post was inaccurate when I saw the median lawyer salary. The bimodal distribution of lawyer salaries makes the use of a median very misleading – a ton of us are making considerably less than that median, especially those who are not “lawyers for life,” which is the group we’re trying to analyze here. In other words, the lawyer salary seems really high to me, and you’d think that would cause lawyers to be ranked too highly. But, then I came to the Lorenz Curve, which should (and it seems did) correct for my problem with the use of the median above. So, in conclusion, adding some curve to the ASS really helped.

  4. Fun article. I’ll have to head over to AoF and take a look around.

    Re: location independence – is there a way to stratify by urban/suburban/rural? That to me is a better differentiator. COL is very different in Chicago vs Springfield. And doctors are often opposite to other fields in the the smaller the city, the higher the compensation.

  5. I wanted to protest and propose yet more splintering of my particular category but I started to get the bubbling feeling that I was edging my boat out onto Lake Wobegone if above averageness. Oops.

    Back to my spreadsheet of actuarial fire which has been incredibly helpful with sorting out my 6 different streams of income that will be wandering in and out of my life. I loved the course!

  6. Do most actuaries work with insurance? Are Hartford, Connecticut and Des Moines, Iowa the two big locations? Or do folks work remotely?

    • I am not sure about “most” actuaries working in insurance, and I can’t quickly find any data. But the areas you describe, plus NJ, are correct. I have certainly met many actuaries that work remotely. It’s becoming more common.

  7. What a fantastic post. I cannot wait to come check out your site. I agree with most everything except the location piece. In my experience the lower COL areas seem to pay higher physician salaries then the more expensive areas. I cannot speak for the other professions and I do have limited experience with physicians because I am only interested in my field of family medicine. But I have heard that the best salaries to be had were found in the LCOL midwest.
    Keep up the good work!

    • Sounds like that should also be true for teachers. We should pay more to teachers who work in areas of high need. But those market dynamics rarely seem to work well for teachers.

      It is certainly not true for actuaries though. The highest paid roles are almost always connected to expensive urban areas like NY, Chicago, Boston etc. And that’s true for investment professionals in general. If you want to earn a lot then you need to move to those areas. That’s one aspect that has hurt my journey to FI.

  8. LOL, I love the conclusion at the end about the eerie silence in the comments.

    I thought I’d give a little bump up to the IT Professional category. In some areas of this analysis they are labeled as IT Professionals, which could be level 1 hardware phone support. In another area, they are listed as programmers, which would be more similar to software engineering.

    While both jobs seem like a natural “work with computers” group, it’s almost like putting LeBorn James and a construction worker in the same category because they “work with their body.”

    PayScale (just to use the first source I found) says that Software Engineers make 17K more on average than IT Professionals (84K vs 17K), with actuaries coming in about the same as Software Engineers.

    Another thing that’s not mentioned with the freedom of location is that a programmer can literally work from the other side of the country or a different country than the job itself. Could you reasonably be California lawyer living in Maine? Probably not. I don’t know if actuaries are giving this flexibility of working from anywhere as long as the work is done.

    Finally, there’s the freelance/part-time option. Teachers can be substitutes and work part-time. There are a lot of part time and freelance programmer/IT gigs – just check out Fiverr. Doctors and lawyers can sometimes choose to scale back their hours. I don’t know about actuaries though. Are there freelance, part-time actuaries?

    It seems to me that’s worth a couple of stars on the FIRE scale

    • Great to hear another IT pro weighing in. At my senior level I make far more than that listed median. And like you said, IT people can work from just about anywhere, especially now that the internet is so widespread and communications options so vast.

      In observing my coworker programmers, I don’t find that their frugality or spendthriftiness has nearly so much to do with their profession as it does with family background and values. Many of my coworkers spend according to their income. Some don’t even contribute to the 401(k) and therefore are sacrificing the free money match. They likely took this career path because it paid well enough to live well. They have $400K houses and late model cars.

      A smaller percentage are more like me and didn’t allow nearly the amount of lifestyle creep to occur as their incomes grew. And if one has a goal to retire early, then the frugality habit is reinforced by the reward of watching those savings grow and debt getting retired.

    • All good points. The Bureau of Labor does split out the IT Professional category but it also splits out the other professions I discussed. I then had to make a decision of what sub-category of each of the professions to take. In the end I decided consistency of figures outranked ‘accuracy’.

      You might be right about the location independence of IT but it certainly is possible for actuaries to do freelance work, or even work remotely. I travel a lot to clients and don’t actually spend much time in my physical office. So I think all jobs are getting much easier to manage on a remote basis.

      Thanks for stopping by!

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  10. Great piece AoF. You certainly have my respect and I find the articles over at AoF very interesting since they often provide an off beat quantitative analysis (like ASS) which I find useful in my own thinking and planning. I also did your spreadsheet course on Udemy and it definitely teaches you how to write a spread sheet that allows you to “what if” scenarios. AoF, One of my favorite financial blogs, right up there with Big ERN

  11. But, if some of us make slightly more than “average”, have a “higher degree” of learned investment know-how (assuming all these blogs, books, etc are actually right), and more spendthriftery, than at least my immediate peers, I think we can see who the biggest ASSes really are! ? Also, I think that some kind of competitiveness score should have come into play ?

    • “some kind of competitiveness score should have come into play” – careful for what you wish for! 🙂
      You’re right averages really don’t tell us a whole lot in the end….


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