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FIRE Crossroads 033: Government-Issued Golden Handcuffs

Today’s dual-physician couple has not yet arrived at their crossroads, but they can see it if they zoom out far enough on Google Maps. Will they turn left? Or right?

Financially, they will likely reach their goals when he’s in his early 50s and she’s in her mid-40s. If they hold out another four to five years, not only will they reap the benefits of working one more year again and again, but they will also qualify for a beefed-up pension and health insurance for life.

That’s not an easy proposition to walk away from, and that’s their primary conundrum at the moment. What would you do in their shoes?

If you’re interested in participating in one of three interview series, please download the most appropriate form for your life situation: FIRE Starter, FIRE Crossroads, or Post-FI Notes. To see other posts in the series, visit our Q&A archive.




Getting to Know You


Where are you on your financial independence journey? Have you crossed the halfway point in terms of net worth and/or passive income?

My wife and I are 30-40% on our way to FIRE, so we can start to see the outer fringes of a light that might be the end of the tunnel!


Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?

I am 45 and my wife is 37.  We have no children and support no other humans (but have two dependents…errr dogs named Charlie and Beau).  We reside in northern Illinois.


In what field are you working? How is your career going? What do you like best and least about your chosen profession?

I am a hospitalist for a VA hospital and my wife is a general internist with a regional health system.  We both are passionate about having the opportunity to change our patients’ lives for the better, but at the same time, we feel like the time commitment hinders us from our other true passion which is traveling.  


Do you feel you’ve come to a crossroads of sorts? If so, tell us about it. What options are you contemplating?

I don’t think we are necessarily at a crossroads in the sense that we are making any major changes soon. 

Our plan (at least since I took the government position) was to work until age 57  (and for my wife, age 49) because we both feel the pension and federal employee retirement system benefits were “golden handcuffs” from which we cannot walk away.

In reality, we could likely retire in nine years, at 53 and 45, but it will depend on the health insurance environment at that time.




How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives? 

We both have 90% of our investments in the C-fund (the S&P 500 fund within the federal TSP program) and VIIIX, the institutional S&P 500 fund from Vanguard. 

The other 10% is in both Vanguard’s REIT index fund and a very minor amount in cash.


Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts?

We have 60% in tax-deferred/Roth/HSA and 40% in a Vanguard brokerage account.


Do you have investments in an HSA? How about 529 Plans?

We contribute the maximum to our HSA every year.  We have no 529 plans.


What has been your best investment?

Honestly (and this is not just an attempt to get this interview published 😊), the numerous hours I have spent reading PoF’s and Dr. Dahle’s websites (along with BIG ERN) have been by far the best investment in our future.


Your worst investment?

For the first two years of our career, we worked for the same hospital system and were investing most of our money into a stock fund with a 1.25% expense ratio.


Into the FIRE


Numerically, what is your FI goal?

This is a very interesting question.  We are aiming for a 30X expense goal and our retirement spending in today’s dollars will be around $120,000 annually, so $3.6 million is our current “number.”


When do you suspect you will achieve financial independence? Will you retire from your career once you’re comfortably FI?

As I mentioned above, we will likely reach our goal in eight years, assuming a conservative real return of 3%, but the early retirement part will be questionable at that time due to the extra benefits of retiring 4 years later at age 57, which is my minimum retirement age in order to have an immediate pension, and being allowed to carry the FERS health insurance forever and pass that coverage on to my spouse in the event of my death.


What are your post-FI plans? How will your life change? What do you look forward to the most?

Our only post-FI rule is we MUST be either on the west coast if we do not immediately retire early, or in Costa Rica whenever we do pull the trigger.


Have you made any major changes in your lifestyle or investments to accelerate your FI path?

At first, we were only maxing out the tax-deferred plans, but after discovering the physician financial websites, we recognized the importance of the triple-tax advantage of the HSA, not to mention the power of the backdoor Roth IRA! 


Are you facing any unique challenges making FI or RE more difficult?

I was very poor during graduate school and med school, so of course, I jumped at any loan money they threw at me that was “extra” after tuition was paid. 

The result, unfortunately, was owing $500,000 in student loans but I have paid 75 of the 120 required months towards PSLF.  It should be about 111 out of 120 but I was short-sighted in residency and did not make payments during the low-income years.



What advice do you have for others who are seeking financial independence?

Keep it simple! 

Aim to invest at least 25% of gross income. Don’t keep up with the Jones families. Utilize all of your tax-advantaged space. Never borrow against your retirement accounts. Low-cost index funds are king!


Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.

Is it worth working four more years than I might otherwise in order to keep great health insurance for the rest of our lives?


PoF: Catch all the future interviews from those just getting started, at a crossroads, or at the end of their FI journey with a free subscription to Physician on FIRE.




I thank today’s interviewee for sharing their story, and I’ve shared my feedback privately with them. I wouldn’t want my opinions to influence yours. Please give your take and answer any questions they have had in the space below!

Again, if you’d like to partake in a future Q&A, please download a FIRE Starter, FIRE Crossroads, or Post-FI Notes interview form.


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17 thoughts on “FIRE Crossroads 033: Government-Issued Golden Handcuffs”

  1. I’m in the same situation. I’m literally working for the health insurance. We have about 32x our annual expenses saved, but the allure of the VA health benefits was just too much. I would otherwise be “retired”, but due to some past health issues, we need excellent insurance and the cost to buy that ourselves would significantly increase our expenses. We were paying $1500/month before I took my VA job. 😫

    I will be almost 58 when I hit my 10 years of service, but not sure I’ll make it that long. I do have the option of working PT and am planning to do that as soon as I hit 5 years in 2026. I have no plans to work beyond 58 and will gladly take the permanent reduction in my pension to retire then.

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  3. I had a similar dilemma, but with far few years of service and less savings, after initial retirement from a state job. We opted to continue for a full 6 years, to earn the medical benefits, but it was not an easy decision. I did though have a unique VA job, which allowed periodic times off, but unfortunately this program is no longer available.

    In the past, retiring with medical benefits has allowed retirees to make a choice to opt out of Medicare, Parts B and D at age 65, and continue the retiree medical benefits. I do not know if this is still possible, or not.

    I would meet with a VA HR specialist knowledgeable with these choices and their requirements now, as you begin making plans.

    I would also look at the ACA costs and programs for medical insurance from ages 57-65, including high deductible plans. If you have a good amount in your HSA, I believe that you could use this in this situation. But please check. Subsidies for ACA plans are also based on yearly income. However, limiting your income during those years may not be a good option.

    The federal retiree healthcare plans are quite good, and it’s a lot to give up. However, it’s also a lot of years, and I would guess with planning that you would be able to cover the healthcare costs if you elect to retire at age 57.

    If the high deductible ACA plans had been stable and available, and I had had HSA savings, I might seriously have gone the route of working only for 2-3 years and forgoing the federal medical benefits.

    Good luck in your decisions. It’s good that you are planning from now.

  4. Have you looked into the temporary PSLF waiver? You may be able to get credit for those missed months in residency even if you didnt make any payments!

  5. Excellent health care is a huge incentive. I’d have a very hard time walking away from it. I agree with everyone who has expressed similar opinions above. You are pretty young. You will still be young when in 4 years. I’d put in the time – it is always good to know you are well prepared if something happens with your health.

  6. Golden handcuffs, but worth it. Pslf in four years will be huge. Going part-time at VA is not an issue…you just have to tell them …or just move to va system that will allow it for the last few years to get to Mra.

    You’re working for benefits not really the dollars by that time. If your number is 120k annual and you have 3.6 already you’re nearly there with fers pension, let alone wife’s pension and still a decade to go…..plenty time.

  7. Go part time now. Travel now. Keep working GS part time until you lock down the retirement. Your “number” decreases if you have AN INFLATION ADJUSTED PENSION WITH HEALTHCARE BENEFITS!
    So if you earn a little less, and save a little less now, you will still be fine since your pension will increase with your longevity at work, and your nest egg will have fewer years that it needs to last you.
    Also remember your younger (likely surviving) spouse will be in a higher Filing Single tax bracket and her nest egg will need to last longer. So go slow, work longer but part time, and enjoy life now.

    • Appreciate your advice and greatly appreciate your service!! Yes my wife is very much in the “stay a little longer and get them bennies” camp 🙂

      • I’ll mention you don’t have to be a traditional working physician in those 4 years either. Heck I don’t know if our agency Doc is a GS or a contractor but except for having to become our COVID expert the Doc mainly has to review employee physicals to deem if we were fit for duty. Or you could take any part time federal job.

      • Immediate Retirement
        An immediate retirement benefit is one that starts within 30 days from the date you stop working. If you meet one of the following sets of age and service requirements, you are entitled to an immediate retirement benefit:
        Eligibility Information
        Age Years of Service
        62 + 5 years
        60 + 20 years
        MRA + 30 years
        MRA + 10 years
        If you retire at the MRA with at least 10, but less than 30 years of service, your benefit will be reduced by 5 percent a year for each year you are under 62, unless you have 20 years of service and your benefit starts when you reach age 60 or later.

        MRA is 57 assuming you were born after 1970. I assume you are considering MRA + 10 years in order to retire with an immediate FERS annuity at 57. The pension is reduced but you still get the benefits. Part-time employment counts towards service requirements. I am working part-time as an internist at he VA and it is working out well. I would stay for the health insurance especially since your wife is much younger than you. By the way, if you retire with FEHB and take Medicare part B at 65, practically ALL OF YOU AND YOUR WIFE’S MEDICAL EXPENSES WILL BE COVERED.

  8. My answer is no. It’s a carrot. Time is your most valuable non-renewable resource. If you have reached your number, enjoy your time!

      • VA obviously has pluses and minuses but since you have been there so long it doesn’t sound like it is about wanting to leave that environment. Do you already have the $3.6 million? In my opinion you have already put in the investment in a VA career, are relatively young and will not be fat retiring so I would consider the actual number of the reduction in your pension but likely do the part-time option. Everyone is healthy until they aren’t so I believe access to excellent health benefits is important.


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