The Finish Line Keeps Moving for This Primary Care Physician

She ran the numbers. Looked good. But what about… shoot! Not so good. The end is in sight; she should be able to retire soon, but the finish line keeps moving on her.

There’s also the possibility that spending could go down after retiring, particularly if you’ve currently got kids at home that will eventually be self-supporting rather than eating you out of house and home. Anyway, the key is to think about all contingencies, and that is what today’s post is all about.

This July I took a lovely vacation, longer than I have had off in a while. I visited family, saw new places, and actually relaxed for a few days. I would love to do that more often.

On my return, I was soon working in the hospital with July interns. It was intense–both good and not so good–but exhausting. Everything that was not medicine went by the wayside: exercise, reading new books, watching suspenseful miniseries (I can’t wait to get back to The Night Manager).

Both experiences have left me wondering where my finances are vis a vis readiness for retirement. I was thinking about this last summer also, and I think it is time to revisit that question: are we there yet? With the corollary: how can I figure out where the finish line is?

The Nest Egg and the 4% question

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The simple answer to: are we there yet? is that if you have savings of at least 25 times your annual spending (25x), you should be able to retire at your current level of spending and never earn another dime. 

Since 4% of 25x is X, we get the inverse truism, that having a nest of 25x your yearly spending should last you through a 30 year retirement. There are arguments all over the internet whether 25x is fine, or if 30x or 33x [your annual spending] is safer, but the principle is the same.

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