Ten Reasons to Delay Your Early Retirement by Five to Ten Years
Prepare to be taken on a musical journey through Vagabond MD’s extended-play version of One More Year Syndrome. Today’s post borrows ideas from a wide variety of talented artists, so strap on your Beats and enjoy the ride.
Our guest author is a financially independent interventional radiologist who will soon be working part-time. He is a frequent and thoughtful contributor to the White Coat Investor forum with over 1,100 posts to date.
You may recall his previous guest posts, both of which generated much discussion.
- Kids are Dynamite for Your Early Retirement Plans
- Top 5 Reasons This Physician Holds $500,000 in Cash
Let’s hear what the Vagabond Doctor has to say today.
You have met your savings goals, and the calculators, gurus, bloggers, and advisors all agree that you are financially independent and can pull the early retirement trigger. Even your mother-in-law is giving you the green light to hang up the stethoscope. Before doing so, here are a handful (or 10) reasons why you should delay doing so for a handful (or 10) years, along with some musical accompaniment.
As has been written and discussed ad nauseam, the health care system, and specifically buying your own Blue Cross (“The Blues”), Cigna, or United health insurance on the individual market in the U.S. is an unmitigated disaster.
Estimates for the cost of insurance can be $24,000/year or more, not including the various co-pays, deductible, and other out-of-pocket charges, nor dental care and other health related costs. There is nothing on the horizon that will change this.
If you are employed as a physician, there is an excellent chance that the bulk of these expenses will be borne by your employer or practice, and this is one excellent reason for an MD to stay on the job, well after having achieved financial independence.
And feed them, and clothe them, and … I have previously written about the negative financial effect that children can have on early retirement aspirations, with expected and unexpected costs that can exceed tens of thousands of dollars per year…or not.
One way to hedge the financial impact of your children on early retirement is to retire later. The further into your own children’s lives that you are working, the more of these expenses will be in your rear view mirror and the better you can estimate their future expenses.
While your six year old may have the bloodline and potential of a D1 scholarship athlete, by age 16 you will probably know whether or not this is really in the cards. Furthermore, if your 15 year old is approaching the high costs of driving, college, and grad school, by age 25 these expenses will (hopefully) no longer be your concern.
(But good luck getting them off your family cellphone plan…)
Life is precious, and it is both a blessing and a curse that we do not know when is our last day. I have two friends from my fellowship class of six that did not make it beyond age 50. A recently retired colleague in his late 50’s, a lifelong nonsmoker, was recently diagnosed with Stage IV lung cancer.
Saving and investing money is laudable and creates great flexibility for your unknown future, but so is having wonderful experiences with family and friends…today. If you plan to work a little longer, you can comfortably spend a little more to enjoy life along the way. I would hate to reach life’s finish line with a large hoard of cash, an unscathed bucket list, and a lifetime of regrets
Be they retirement plans, taxable accounts, pensions, inheritances, or even the much-maligned social security system, the laws of simple intuition and math dictate that the longer you add to the pile and less time you have to subtract from it, the larger the pile will last. QED
Working longer will increase your Safe Withdrawal Rate (SWR), the percent of your assets that you can comfortably spend to live. And, if it so interests you, you will also likely have more money to leave to your heirs or charities.
You went into this medical thing for a reason, spent 4 years in med school, 3-10 years or more training, in large part so you could have the experience to assist people during a time of physical and or emotional need. You have been in practice for ten, fifteen, twenty years or more. You know your EMR like the back of your hand. You can do the routine procedures in your sleep. You know and like your patients and colleagues, and they know and like you. The hospital CEO is your Facebook friend. You have already done the hard work of building your career, and the wind is at your back. While some might even suggest that it is your duty to practice, if you are still able, why not just keep enjoying the long, strange trip.
6. “Work less, smile more” (apologies to Hamilton: The Musical – “Talk less, smile more…”)
Most medical specialties are in demand, and that allows creative and forward thinking MDs to craft their own schedules. If adding to the nest egg is not as high a priority, you can work less, creating time and space for family, hobbies, and interests, while a decent income keeps rolling in. You do not have to go cold turkey.
Here are some part time schedules and job sharing arrangements that I have known people to take in the later years of their careers:
3 days per week
2 1/2 days per week
No nights or weekends
Every other week
Every other month
Six months on, six months off
Locum tenens only
“x” shifts per month in ED, UCC, Clinic, ICU, Hospitalist (dial in whatever “x” you want)
Contrast coverage for imaging center
Two weekends per month
Sporadic prn coverage
In reality, the part time possibilities are infinite for a physician in good standing, especially one with a strong professional network.
As a prospective early retiree MD, you have no doubt been a super saver and hard worker, and you were likely laser focused on the career for many years. Do you have enough hobbies and interests to keep you busy and engaged? Sure, you can retire at age 45 and play golf every day for 45 years, but guess what? You can retire at 55 and play golf everyday, and in either scenario, you will still be bored and tired of golf in 6 months! People are living longer, too, so retiring at 40 or 45 might leave you with 50+ years of time to fill.
Now that the career is in the bag, you can divert some of your focus to your hobbies, interests, additional education, and charitable work, while you work, and you will be better prepared for the next phase of your life.
If you retire sooner, rather than later, you might find yourself alone much more than you are accustomed. Maybe your significant other works or has his/her own routine. Your kids are at school most of the day or have already left the nest. Most of your friends still work. Your work friends still work (that’s why they are your “work friends”), and you will miss them. Do you really want to spend more of your days alone?
Totally counterintuitive, but there are a lot of studies that suggest that early retirement is a risk factor for an early death. Work longer and live longer.
There are certainly many other factors and confounding variables, but if working beyond financial independence allows me to keep my wits for a bit longer, it is probably the sane and intelligent choice.
Some of the above points may not apply to you, but at least a few must resonate with most. Early retirement is a goal worth striving for, but once you get to the point that you can FIRE, there are many excellent reasons to work a little bit longer.
Obviously, one should be more choosy with the job and lifestyle when playing with house money, perhaps working less and letting go of elements of the doc job that you find unappealing. You might just find that toiling beyond FI is when work is the most enjoyable and worthwhile.
If you enjoyed this post, be sure to see The Top 5 Money Lessons From Prince. You might also be interested in my pre-emptive rebuttal, written nearly a year ago and published over at Financial Samurai: Rejecting Every Reason Not to Retire Early.
And remember, don’t retire to something, retire on something!
Which is your favorite reason? Which is your favorite song? Got a number eleven to contribute?