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Post FI Notes 012: Mostly Retired at 55 with a Military Pension and Millions

Today’s interviewee has income coming from multiple directions, and any of the three primary sources could support a majority of their generous annual retirement spending.

First, there’s his retirement nest egg, which, based on a 4% withdrawal rate, is all they would need to support their lifestyle. Next, there’s a military pension that he earned the hard way — Thank You for your service. Finally, he serves as a medical consultant a few days a month, making some active income that helps pay the bills.

His biggest conundrum is figuring out how to tell others his age that he doesn’t really need to work anymore. Many of them can’t fathom such a thing!

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


You’re financially independent. About how much does your household spend in a typical year? How much could you spend while still abiding by the 4% rule?

In pre-pandemic years, we spent about $130,000 per year, which amounts to approximately 4% of our investments. However, I do have a few sources of passive income.

My military pension covers about 58% of our average spending and dividends cover about 8%. Therefore, our actual withdrawal rate is just around 2%.

Another way of valuing the military pension, using annuity calculators, is the present value of a pension at $76,000/year, with a conservative annual cost of living rate of 1%, over the next 25 years, is worth roughly $1.7 million during retirement.

Needless to say over the past year and a half during the pandemic, our spending has been much less than in previous years.


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 a 55-year-old recently retired (1.5 years ago) surgeon, and my wife is 51 (also a retired professional, for 9 years now). We live in the South. We have a 21-year-old daughter who is a college student in the New England area. Most of her college costs are covered by a 529 plan.

Recently, we started paying for a caregiver to assist my father-in-law, and we partially pay for a caregiver to help my mother.


Are you still working? In what career? Did your work schedule or attitude towards work change once you knew you were FI?

Although I retired from full-time clinical practice, I have a part-time medical consultant job for a few days each month. My last full-time job was as a hospital employee, and my attitude towards work did change after I realized that I was FI.

I still had two years left on my contract, but FI allowed me to put into better perspective what I thought was important to patient care and what was not. I did not let the little irritations bother me as much (computer/EHR problems, patient no-shows, lack of supplies, the pre-authorization process, slow O.R. turnover, etc.).

I spoke up more in staff and committee meetings in support of doctors or patients more than in support of policies or the organization.

For almost 3 decades, I defined myself primarily through my work, but after FI, I realized that work was just a means to save, invest, and yes -spend, but ultimately to live intentionally. In addition to husband and father, I am still trying to figure out other aspects of my true identity.


Was financial independence a long-term goal of yours? Did you think you might retire early or be able to do so when you first got started in your career?

I have always been frugal. I never wanted to be in debt. I went to a state school for undergrad and had a military scholarship for medical school. Therefore, I had no student loans upon graduation – I was just indebted to the military (and ended up staying for 20 years).

I lived like a student during residency and lived like a resident as an attending (before getting married).  I didn’t know that I was seeking financial independence, necessarily. I thought I was just pursuing wealth.

I hoped to be a surgeon for life. However several years ago I was starting to burn out professionally, and at about the same time, I started reading up on the FIRE movement. Until then, I never dreamed that I could reach a level of financial independence that allowed me the freedom to work on just my own terms or to walk away from work completely if I wanted.




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

Almost all of our investments (>90%) are based on a standard 3-fund portfolio of index funds or equivalent. My desired asset allocation is 50% U.S. stocks, 10% international stocks, and 40% bonds. We paid cash for the house we live in.

I also own the house my parents live in, with $60,000 remaining on a 15-year mortgage at 3%. I could pay it off, but I choose to remain invested in the stock market. Because my monthly military pension covers almost 60% of our spending, we hold no more than 2 months in cash as an emergency fund.


Are your investments primarily in tax-deferred, Roth, or “taxable” post-tax accounts? Do you have investments in an HSA? How about 529 Plans?

Currently about 50% of our investments are in a taxable brokerage account (stock index ETFs and a municipal bond ETF from which we draw from as needed at a 15% capital gains rate).

Approximately 40% are in tax-deferred accounts (IRA, TSP, HSA, and a 457(b) from which we draw annually for the first 5 years of retirement). Approximately 10% is in a Roth IRA that is all in VTSAX. The 529 account will cover our daughter’s current 4-year undergraduate career.


What has been your best investment?

One of my most sensible investment moves was to invest maximally in the Roth IRA when it first became an option in 1998 while I was still a resident, and putting it all in Vanguard 500 Index Fund (until converting it all to Total Stock Market Index Fund a few years age).

Another good investment was buying some public shares of Google (now known as Alphabet) in 2010. Since it has appreciated over 900% since then, most of the shares have been used to open a Donor Advised Fund.


Your worst investment?

I thought I was a savvy investor during the dot-com craze. In 1999 I invested $10,000 in nutritionsuperstores.com, which ended up being a scam, and I lost all of it. I also invested in a medical technology dot-com stock of which I lost 87% during the dot-com bust. I proved to be a poorly-informed, inexperienced investor at that time.


Post-FI Life


What do you like to do with your free time? How much free time do you have these days?

A typical day starts lazily with a light breakfast, coffee, and browsing the news on the Internet for half an hour. Next, I pick up momentum by taking each of our 3 dogs on their first walk of the day. Then, I get a personal workout in, either lifting free weights, riding a bike, swimming, or doing yoga.

After that, I typically take on large or small projects, like fixing things around the house, in the garden, on the cars, or on the bicycles. I might take a break from the daily project to read financial and retirement blogs. During the pandemic and the recovery, I have had a lot of free time to do chores and help family, also.


Do you enjoy travel? Tell us about a favorite trip you’ve taken.

My wife and I started traveling internationally over the past 10 years. She really enjoys visiting Eastern European countries, while I enjoy more of France and Italy.

A recent favorite trip of ours was a cruise through Australia, Tasmania, and New Zealand in early 2020 along with some dear friends just before the pandemic lockdown.

My wife is quite a savvy travel hacker – flying us to and from Australia in business class on rewards and getting a room with a view of the Opera House across the harbor at the Park Hyatt Sydney on points.

Some of the unforgettable highlights of that trip include climbing the Harbour Bridge and touring the Opera House in Sydney, feeding the kangaroos, spotting Tasmanian devils and koalas at a wildlife sanctuary in Tasmania, and hiking and biking in different parts of New Zealand.


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Do you incorporate giving (money or time) into your post-FI life?

My wife volunteers with local dog rescue shelters, and she is a volunteer mentor to at-risk students. I volunteer time with my alma mater’s Alumni Association.

We contribute every year to charities that we have personal connections with through our Donor Advised Fund.


If retired, do you miss work? Do you get bored?

I do not miss the daily grind of work. I do miss the relationships (staff, patients, colleagues) from work. I also miss the prestige and satisfaction of providing care as a surgeon.

It took almost a year before I stopped checking up on co-workers or reading professional journals on a daily or weekly basis. I still attend my subspecialty’s annual conference. I have ample time to do everything I want, but I do not get bored.


What advice do you have for others hoping to achieve the financial success you’ve found?

Live below your means by figuring out what things you enjoy that do not cost a lot. They do exist; you just have to find them, e.g., reading, hiking, cooking, writing, etc… Have an active plan to simultaneously tackle debt and to save/invest – better yet have a written Investor Policy Statement.

My wife and I always remind each other of how fortunate we are. We are lucky that we can just hop on a plane at any time to go help our elderly parents (which we have done several times over the past year) or to take a mini-vacation.


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

I still haven’t found a good way to explain to my siblings/cousins of similar age that I have FIREd, especially since most of them still live paycheck to paycheck.


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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8 thoughts on “Post FI Notes 012: Mostly Retired at 55 with a Military Pension and Millions”

  1. Just curious, are you receiving disability also as income from serving in the military as most service members do when they exit the military which in most cases it almost doubles their income(tax free by the way)?

  2. Subscribe to get more great content like this, an awesome spreadsheet, and more!
  3. Telling others about mid-50’s FIRE:

    You don’t owe them an answer. You’ve made great decisions and are now reaping the harvest. Tell them how great life is now and keep FIRE’ing away. Haters gonna hate…

  4. Congratulations on your success! I am guessing that your family is already aware of your success and hard work
    My family has been appreciative of some cash gifts for college
    I am interested in how you got involved in consulting
    Thank you for sharing your story

  5. Siblings and cousins most likely won’t be receptive to hearing you have FIREd, and in fact sharing this info could backfire due to envy. They may perceive the news as bragging.

    It’s also sad to think someone in their mid-50s is living paycheck to paycheck. I’ve known people like this and they have made that choice, and they have to change their choices if they are tired of the situation. These same people tend to portray themselves as victims of circumstance, which I guess gets them off the hook for taking responsibility for their choices.

  6. The HSA we have is small and was from when my wife was working before she was on Tricare with me. We haven’t used any of it yet.
    Yes, the military pension is probably worth more. As you can see, my estimates were conservative and my asset allocation is also conservative. We will probably increase equities slightly once we feel we are out of the sequence of returns risk window.
    I did not elect SBP, but I have term life insurance (good rates at Navy Mutual) until the age of 75.

  7. Thanks for your openeness with your post and excellent job with reaching FIRE. I do agree with the previous post that with your military pension your portfolio of 60/40 does seem a bit conservative. But you have already won the ‘game’ so I understand trying to preserve wealth and have smaller risk adjusted returns. You can also look into RE syndications as part of your allocation if you would like to learn about that asset class.

    For your military pension did you choose SBP or did you decide to just self-fund in case that situation occurs? Also, do you maintain life insurance in retirement, or have decided to self-fund and not maintain life insurance? Just wondering as I will also soon be in a similar situation, being in the military, and will need to make those decisions.

    As for telling your siblings/cousins that you have FIRE, I would recommend just telling them if it comes up in conversation about what you are doing now. And explain how you achieved that and how others can as well. You mentioned they are similar age as you and paycheck to paycheck, so they may not be able to achieve that. But I am sure that if they have children they would love to share that knowledge with them. This way their children have the option of learning this at a young age.

  8. Congratulations!

    Given your large pension, have you considered increasing your equity exposure? If your overall goal is a 60:40 split, one could argue the pension is significantly tipping the scales towards safe.

    On the one hand, you have won the game so no need to take more risk. On the other hand, if 60:40 is the risk that is right for you, perhaps increase equity exposure

  9. Thank you for sharing! An inspiration for the rest of us!

    I am curious how you were able to fund an HSA as tricare does not offer a HDHP? I was always under the impression that was not possible/allowed.

    Also, I believe your pension is worth far more than 1.7 Million dollars. The odds are you (or your spouse with the SBP) will be drawing on it for far more than 25 years is likely and the COLA is also very valuable and I do not believe a comparable annuity is even available for purchase today.

    Either way, you are I great shape! Congrats!


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