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Our couple today is made up of a retired cardiologist alongside his retired office billing manager, retiring to sunny Florida was 35 times expenses in the bank.
They have a very simple investment portfolio and find themselves with lots of time (and a fair bit of money, too).
Let’s take a look at how financial independence and retirement is treating them.
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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?
All in, we spent $189,275 in 2022. Without taxes, home improvements & gifts we spent $103,000.
Taxes were $57,945 (including estimated taxes paid in January), gifts of $24,219 (529 contributions are not listed here as they were transferred from son to grandkids), and home improvements were $34,079.
We can spend around $250,000 and still keep the withdrawal under 4%.
Tell us about your household. How many people and at what ages? Are you supporting anyone outside of your home? Where do you live?
We are financially independent. I am 66 and my wife is 61.
I am a retired cardiologist, and my wife is a retired office billing manager. We have two kids, ages 38 and 30. They are gainfully employed. We have three grandchildren that we love to spoil. We do not support anyone outside of our home, and we live in Central Florida.
Are you still working? In what career? Did your work schedule or attitude towards work change once you knew you were FI?
We are retired. When I knew our savings were enough to retire, we did.
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?
Yes, financial independence was our long-term goal. We are immigrants from India, and it was not easy getting into a residency after taking the required tests.
We started with nothing in the USA. We are fortunate to be where we are in a great country.
Investing
How is your nest egg invested? Approximately what percentage is allocated to stocks, bonds, real estate, and alternatives?
Our asset allocation is 65% stocks / 35% bonds with no real estate or alternatives. We have five holdings. Our savings are at roughly 35 times our yearly expenses
Taxable (72% of portfolio):
- VTI: Vanguard Total Stock Market
- VXUS: Vanguard International Stock Market
- VWIUX: Vanguard Intermediate Term Tax Exempt
- VBIRX: Vanguard Short Term Index
Tax-Free Roth (10% of portfolio): VTI
Tax-Deferred IRA (18% of portfolio): BND Vanguard Total Bond Index
Do you have investments in an HSA? How about 529 Plans?
We have an HSA.
We also have a 529. Both of our kids graduated debt-free and have graduate degrees.
What has been your best investment?
I would guess VTI (ETF equivalent of VTSAX, a Total Stock Market Index Fund), though I do not have the figures.
Your worst investment?
I think Total Bond Index, especially in 2022, since it seemed like bonds themselves needed a ballast of some kind.
Post-FI Life
What do you like to do with your free time? How much free time do you have these days?
We have a lot of free time. We walk along with our dog in our neighborhood, we go to a chair yoga class at the Senior Center, and we socialize with friends at group potlucks.
I am online at Bogleheads, early retirement & other financial websites.
I volunteer at a free clinic and my wife volunteers weekly at Meals on Wheels. I may also go back to Meals on Wheels, and I volunteer as a master gardener at the local county extension.
Do you enjoy travel? Tell us about a favorite trip you’ve taken.
We frequently travel to Georgia and Tampa to visit kids and grandkids.
We had an RV for a couple of years. We made a memorable cross country RV trip over a month and half, and we visited Vancouver, Canada, Yellowstone, and Mount Rushmore.
We spent another month-and-a-half RV trip to the Grand Canyon, Hoover Dam, Las Vegas, San Diego, and Quartzsite, Arizona, with small stops on the way. We also took lots of smaller trips.
We recently went to India for my medical school class reunion, which was lots of fun. We have taken several trips to Europe, but Australia, New Zealand and the Far East still remain on our list.
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Do you incorporate giving (money or time) into your post-FI life?
We have a donor-advised fund set up, from which we regularly donate to a scholarship we started at our county community college, to our places of worship, a seniors group we belong to, and others as well.
If retired, do you miss work? Do you get bored?
Yes, I get bored, but my wife not as much. I do miss work, but I don’t miss managing the solo office as much.
What advice do you have for others hoping to achieve the financial success you’ve found?
Save money for an emergency fund and then invest in an index fund, apart from your IRAs and company 401k.
We started with saving whatever we could during residency and continued saving in our work life.
We knew how bad it was living with very little money so we were motivated to save and invest, and luckily the bull market did the rest.
Finally, is there anything under the sun that you’d like some help with? The hive mind would be happy to weigh in.
I need advice. We are doing a lot of Roth conversions before 2026, attempting to stay in the 24% federal income tax bracket while being mindful of the IRMAA brackets for Medicare Part B.
Do you know of any program that can help with this planning when some dividends (taxable income) aren’t paid out until the final week of the year?
Is a tax-exempt municipal bond fund appropriate for us? If not, which bond fund should we own in our taxable brokerage account? While the income is exempt from income taxes, it does increase MAGI, and it has pushed us into a higher IRMAA bracket in the past.
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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.
14 thoughts on “Post FI Notes 024: Retired Cardiologist Combatting Boredom”
They’re using the antiquated 60/40 model? A good way to lose money now.
Get into non-correlated assets like art, gold, farmland, etc. Art should do well at the high end. People who buy fine art have so much money they don’t care about the cost.
Farmland is a must. There is a fertilizer shortage that is only going to get worse. The good news is that the US is not dependent upon other countries for nitrogen and phosphorus. The US imports most of its potash but it cones from Canada so I think that supply chain is safe. The rest of the world is at the mercy of China, Russia, and Belarus.
Also, LNG is used to combine with nitrogen to make the nitrogen compounds in fertilizer. Don’t think about energy, think about starvation.
Gold is your insurance against loss of faith in the currency.
Rental real estate is undergoing major crashes in quite a few metro areas, mostly the ones that had the biggest booms. So if you’re in Austin and patting yourself on the back for your SFH investments, think again. Places like Austin are going to see cascading effects that will lower rent across the board. The big boys who scarfed up rental homes are now sellers.
They’re using the antiquated 60/40 model? A good way to lose money now.
Get into non-correlated assets like art, gold, farmland, etc. Art should do well at the high end. People who buy fine art have so much money they don’t care about the cost.
Farmland is a must. There is a fertilizer shortage that is only going to get worse. The good news is that the US is not dependent upon other countries for nitrogen and phosphorus. The US imports most of its potash but it cones from Canada so I think that supply chain is safe. The rest of the world is at the mercy of China, Russia, and Belarus.
Also, LNG is used to combine with nitrogen to make the nitrogen compounds in fertilizer. Don’t think about energy, think about starvation.
Gold is your insurance against loss of faith in the currency.
Rental real estate is undergoing major crashes in quite a few metro areas, mostly the ones that had the biggest booms. So if you’re in Austin and patting yourself on the back for your SFH investments, think again. Places like Austin are going to see cascading effects that will lower rent across the board. The big boys who scarfed up rental homes are now sellers.
Like Ray, I look at all our income in mid-December, look at the projected end of year dividends and then fill up our bracket. The actual conversion only takes a few minutes and could be done pretty late in December (but I wouldn’t push past the 29th, but I do it even sooner). If you go over just a bit, you only pay the extra tax on the small overage, so not that big of deal. But if you would beat yourself up mentally for that, then shoot to be a little under.
Congrats and enjoy retirement, you have room to spend. Maybe take the grand-kids (and kids I suppose!) on a vacation that you pay for. Fly first class (it is so nice, well worth it) or spend on some of the experience that you really would enjoy.
Oh and regarding municipal bonds vs taxable bonds, this is a math equation. If taxable bonds are paying 4.5% and you are in the 24% tax bracket, that is 3.42% net (0.045 *(1-0.24)). If municipal bonds are paying 3% (4.5 and 3 were what I saw on Vanguard today), then taxable bonds provide a better rate of return for you.
This accounts for federal taxes only. Depending on how your state taxes municipal bonds or taxable bonds, you should be able to do something similar to see how much the state is taking from you. Being that you are in Florida, that answer is none (for you)!
Like Ray, I look at all our income in mid-December, look at the projected end of year dividends and then fill up our bracket. The actual conversion only takes a few minutes and could be done pretty late in December (but I wouldn’t push past the 29th, but I do it even sooner). If you go over just a bit, you only pay the extra tax on the small overage, so not that big of deal. But if you would beat yourself up mentally for that, then shoot to be a little under.
Congrats and enjoy retirement, you have room to spend. Maybe take the grand-kids (and kids I suppose!) on a vacation that you pay for. Fly first class (it is so nice, well worth it) or spend on some of the experience that you really would enjoy.
Oh and regarding municipal bonds vs taxable bonds, this is a math equation. If taxable bonds are paying 4.5% and you are in the 24% tax bracket, that is 3.42% net (0.045 *(1-0.24)). If municipal bonds are paying 3% (4.5 and 3 were what I saw on Vanguard today), then taxable bonds provide a better rate of return for you.
This accounts for federal taxes only. Depending on how your state taxes municipal bonds or taxable bonds, you should be able to do something similar to see how much the state is taking from you. Being that you are in Florida, that answer is none (for you)!
I was hoping to have the boredom aspect explored a little bit more. I think a little boredom is okay. It’s “spaciousness” that allows you to develop new interests and ideas. But I wouldn’t want too much!
I tell my kids that “Only boring people get bored” but I think we could all get bored without some deliberate effort to avoid it.
I was hoping to have the boredom aspect explored a little bit more. I think a little boredom is okay. It’s “spaciousness” that allows you to develop new interests and ideas. But I wouldn’t want too much!
I tell my kids that “Only boring people get bored” but I think we could all get bored without some deliberate effort to avoid it.
I’m adding “maximize spaciousness” to my financial plan!
Holistiplan is a software that advisors use to help with tax planning projections. It is a paid subscription on a yearly basis. You can do a free trial. I found them through Kitces.com. I went on a free webinar and it sounds promising. I have not tried it yet probably in 2 years when we are near retirement. Holistiplan.com
I enjoyed your post and am also doing Roth Conversions up to the top of the 24 % bracket also remaining aware of the IRMAA Brackets. The problem of course with the IRMAA brackets is they are not published for next year only for the current year and estimating what they will be is difficult.
Dividends are generally estimated by the brokerage houses so in Mid December you can get a good estimate of end of the year dividends.
Then I use the 1040 tax calculator at Ameriprise to help me with figuring out how much to convert to stay in the 24% bracket tax wise and under my IRMAA estimate.
To access the calculator type in 1040 tax calculator in the search bar at Ameriprise.
To make it worthwhile you have to understand the tax code and fill in all the pertinent info.
I have found it very helpful.
I enjoyed your post and am also doing Roth Conversions up to the top of the 24 % bracket also remaining aware of the IRMAA Brackets. The problem of course with the IRMAA brackets is they are not published for next year only for the current year and estimating what they will be is difficult.
Dividends are generally estimated by the brokerage houses so in Mid December you can get a good estimate of end of the year dividends.
Then I use the 1040 tax calculator at Ameriprise to help me with figuring out how much to convert to stay in the 24% bracket tax wise and under my IRMAA estimate.
To access the calculator type in 1040 tax calculator in the search bar at Ameriprise.
To make it worthwhile you have to understand the tax code and fill in all the pertinent info.
I have found it very helpful.
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Congratulations! and thank you for sharing your story with us.
How long have you been retired? How long prior to your retirement you paid off your mortgage?
Thank you.
We retired about 7 1/2 yrs back when I was 59, we downsized to a smaller house & paid cash.