If you can afford to retire, why are you still working? It’s a question I find myself pondering from time to time, and you may be in a similar boat.
At first blush, as someone who retired from anesthesiology at the age of 43, I may seem like the poster child for those who say Yes to retirement and No to work. The truth, however, is that I not only continued to work in medicine for nearly five years after I realized that I could afford to retire, but that I also continue to work in a different capacity to this day.
There are some very good reasons and not-so-good reasons to continue working despite having attained financial independence.
Let’s look at why people work when they don’t need the money, and I’ll try to do some self-reflection, as painful as that can sometimes be.
Newton’s first law of motion is a tough one to overcome. A career in motion tends to stay in motion. An abrupt change in direction or a complete stop requires a strong outside force, and it’s often easier to let the ball keep rolling. Continue the status quo.
While counterintuitive, choosing not to work requires a substantial effort.
You must convince yourself that you’re ready; you may have to convince loved ones and friends, too.
Most professionals, especially those in the healthcare field, can’t just give two weeks’ notice and start packing up the office. Breaking up is hard to do, and your contract or conscience may demand that you give several months’ notice or more. I effectively gave more than two years’ notice once I had convinced myself and my family that I was ready to move on from the operating room.
The status quo typically comes with certain benefits, too, like a steady income, regular social interaction, and a sense of purpose and satisfaction. I’ll touch more on that later.
My Take on Inertia
When I discovered that I was financially independent, I had been in that particular anesthesia position for less than a year. It was far too soon to consider retiring; I needed a few years to solidify the fact that I was ready to make a drastic change.
Now, I continue to work, writing regularly as I build this business. I’m reaching and teaching a lot of people who genuinely appreciate what I do here, and if I were to take a break or stop entirely, I’d be letting myself and others down.
That said, I haven’t had a week off in more than 6 years, which is why I continue to ask the question at hand.
I mentioned some tangible and intangible benefits above, but now I’m talking about the benefits package one receives when gainfully employed.
Health insurance is the most frequently cited, all-important benefit, but there are a number of others, including but not limited to 401(k) or 403(b) matching and profit sharing, disability insurance, life insurance, dental and vision coverage, legal services, and more.
The self-employed have figured out that you don’t need an HR department to have these things, and the truth is that you don’t even need a job to buy these things. You need money to buy these things. That’s what you need. Money. And you’ve got that.
Psychologically, it can be hard to walk away from a job that provides all of these benefits. However, if you’re still working solely for the benefits, it’s probably because you’re not confident that you can afford to pay for these things on your own. Or maybe you’re just not accustomed to it. Either way, this is a problem that money can solve.
Yes, there are uncertainties surrounding the future cost of health care, but that’s true of the cost of everything. Did you anticipate $6 gasoline when you were filling up for $1.50 a gallon in 2020? Me, neither.
Making sure you have more than enough money to cover just about any unexpected expense is another good reason to keep working when you no longer need to, but there will be a point where you’ve got beyond enough.
My Take on Benefits
I was responsible for my own benefits for the first half of my anesthesia career as a locum tenens physician and independent contractor. Before leaving my final employed position, I created a retirement readiness checklist and made sure the boxes were checked.
In some cases, that meant purchasing insurance, like health insurance via Healthcare.gov. In other cases, I decided I could self-insure / not insure, as is the case with life insurance, disability insurance, and dental care.
What if mortgage rates double in six months? What if stocks and bonds tank at the same time? Oh, crap. They already did. Welcome to 2022!
Based on historical market returns, you have an excellent chance of making your money last when you retire with 25 years’ worth of expenses saved up. There are a lot of assumptions here, though, and one of them is that you don’t plan to upgrade your lifestyle from the baseline you’ve established.
If you retire early as a relatively frugal fellow, but your working friends continue to increase their salaries, retirement accounts, and budgets, you may develop fatFIRE tastes that you never knew you had.
Again, there is a point where you’ve saved up enough money or built all the passive income streams you’ll ever need to deal with any non-apocalyptic catastrophe. I don’t know at exactly what point one crosses that line, but my initial FIRE goals called for having 40 to 50 years’ of expenses saved up before leaving medicine.
If a 2% to 3% withdrawal rate makes you feel more secure going into retirement, go for it, especially if you enjoy the work that you do.
My Take on Security
With strong stock market returns in my final working years, I met that 50x goal of being 2x FI before leaving medicine in 2019.
Despite dealing with two bear markets in my first three years, I’m happy to say that our net worth has grown, and that’s without including the value of this business on our spreadsheet.
I feel that we are very secure from a monetary standpoint, and I’m glad that we’ve built up a sizeable cushion that mitigates all kinds of risks, including sequence of returns risk.
Your work looked at as a calling, a career, or a job. The more meaning you derive from the work and the more your identity and ego are intertwined with your profession, the more likely you are to consider your work to be a calling.
If you’re there for the paycheck or because you can’t think of anything better to do with your time, you’ve got yourself a job.
You may thrive on the intellectual challenges that your work routinely provides. The gratitude of your patients or, in other fields, clients (I refuse to refer to patients as clients, as administrators like to do these days), may be the reason you get out of bed each day. Some people genuinely love their jobs, and working doesn’t feel like work. That’s a fantastic position to be in!
A sense of purpose is important for mental health, and without purpose, you could wind up wandering aimlessly, drinking endlessly, or just dealing with some low-level uneasiness that’s difficult to describe.
I think we tend to undervalue the power of a sense of purpose, but most grownups have several of them. There’s paid work, yes, but there’s also the purpose of being a caring spouse or partner, mother or father, sister or brother, and son or daughter. Animals need love, too.
Retirees can find purpose with volunteering, civic organizations, or, after caring for others their entire adult lives, focusing more on self-care. If you do choose to stop working for money, remember to retire to something (or on something).
My Take on Purpose
One’s purpose can evolve. Work can be a tremendous source of purpose and pride, but there’s so much more to life.
It was difficult to be everything to everyone in my anesthesia days, and I know there have been times that I’ve disappointed and been unavailable to people that are important to me.
I’d like to make family and friends a bigger part of my life, but after so many years of busyness, it’s tough to flip the switch. I think I’ve done a great job of making my immediate family a priority, but I need to branch out more. Having this business has made it easy to maintain a level of busyness and has given me a convenient excuse for my shortcomings.
We’ve already gone over some of the most fearful aspects of leaving the world of the working, but I feel that fear, often irrational fear, keeps too many people working in careers that they no longer love.
Don’t be afraid of things beyond your control. Your portfolio will take some hits. Unexpected expenses can be, paradoxically, expected, and probably more often than you think. Yeah, you’ll have to pay for healthcare if your retire before you turn 65.
I wouldn’t want you to retire without enough money (here’s how much it should take), and as my Dad likes to say, “if money can solve your problem, you don’t have a problem.” Money solves a lot of these problems.
If money can’t eliminate your problem, you’ll probably be glad you retired early. A terminal diagnosis in yourself or a loved one is devastating, but much more difficult if only your nights and weekends are your own. Try not to fear the unknown.
Don’t be afraid of what other people think. Most people are more concerned with what other people think of them to care that much about your decision to work or not.
My Take on Fear
Most of my fears are irrational, and yours probably are, too. Most spiders are pretty harmless, and if you’re not taking a selfie while backpedaling, you’re pretty safe checking out the Grand Canyon from the rim trail.
I think the fear of what others think of you and your choices sets in during puberty, and it’s a really tough one to shake. I definitely worried about other people’s opinions of me leaving medicine in my prime, but once I had my parents’ nod of approval, I felt a lot better about it.
Would you rather catch up on Stranger Things or prevent 100 children from getting cholera?
That’s not a question you’re likely to face, and it’s not exactly a fair question. Those aren’t mutually exclusive options.
Still, there are charitable organizations doing good for people and places all over this great big world, and your money and time can be used to further their objectives.
This ties in to having a sense of purpose, and you may decide that trying to make the world a better place in whatever small or large way you can is a part of that.
Continuing to work, even when you don’t need the money, can be quite noble. Maybe you don’t need the money, but billions of people less fortunate than you could certainly use it.
Having a charitable mission can keep you working when you might otherwise feel ready to call it a day.
Do you think they get cholera in the upside down? I suppose they have bigger worries down there (that’s a Stranger Things thing, if you’re not yet caught up).
My Take on Philanthropy
I felt a tinge of guilt as I contemplated leaving millions of dollars on the table by retiring young, knowing how much good could be done with my future potential earnings. To minimize my likelihood of regret, I decided to grow our donor advised fund balance to about 10% of our baseline FI number.
Since leaving medicine, I’ve donated multiple six figures of business income from Physician on FIRE to continue building up a charitable endowment while making grants to hundreds of charities along the way, many of which I let the readers choose.
The day will come where our active income ceases, but we’ve got a charitable war chest from which we’ll be able to deploy five figures annually for decades to come.
It was important to me to be able to be generous later in life when I wouldn’t have the income or any tax incentive. Now, I’ve got that.
Should You Keep Working? Should I?
Once you’ve got the money part figured out, you have the luxury of deciding how you want to spend your remaining days.
There are laudable reasons to continue the career, and some people cannot imagine doing anything else. The opportunity cost, however, in terms of time and missed experiences, can be huge.
Working can keep you receiving benefits and earning money that can be put towards a greater good. A career or calling can provide an all-important sense of purpose, but recall that there are other ways to live a meaningful life.
If you’re on the fence, don’t allow fear or inertia to keep you in a place where you’re no longer thriving. Life is too short to be less than fulfilled, especially once you’ve got the money part figured out.
What other reasons, good or bad, can you come up with for someone to keep working when they can afford to do whatever they want in life?
8 thoughts on “Why Work When You Can Afford to Retire?”
In my opinion, if you are only practicing Medicine for the money, you’re not practicing Medicine.
I think for some, there has to be purpose. I transitioned out of clinical work into a business owner/entrepreneurial position. I spend about 10 hours a week overseeing the operations. I enjoy this much more than the clinical work. It gives structure to my life. Still having income without having to touch our nest egg is also comforting.
Excellent and thoughtful post. I continue to work, full time for the first time in five years (!), despite having enough resources to retire comfortably. All of the above points contribute to the reasoning, but there is also something I learned during the early days of the pandemic, when a was furloughed for three months – I actually like work!
Of course I do not like not everything about work. I shifted into a non-clinical job, enjoy my work most of the time, like working from home, like being able to walk my dogs four times each day, and like a pretty firm 8-5 schedule, with an hour off for work. I also do like continuing to add to retirement savings plans and even taxable accounts with this lower paying job.
I think that unanticipated expenses, as you get older, are more frequent and costly. We are currently helping to support my mother-in-law, who is literally broke. My mother seemed like she had enough to live on but is rapidly spending down. My wife requires a very expensive arthritis medication (she tried and failed all of the cheap ones). Your teeth wear out over time requiring expensive dental work. Who knows what the kids might need in the future? Etc. So continuing to work is a hedge against all of these sorts of expenses and all of the ones that I have not thought of.
Thank you for weighing in and for the kind words.
Your path proves that a career transition can be more effective in curing what ails you than a full-on retirement can be. It’s also more fruitful, obviously.
It’s also folly to assume that one’s current expenses are a good baseline for the next few decades. More money does take care of the vast majority of contingencies.
One other category of people who continue to work might be labeled “enjoyment”. These are people who just love their job – love what they are doing. Tony Bennett, who still performs at 95 is an example of this. Why stop when you have one of the best jobs in the world? It’s more than just ego.
Bennett may be a unique example, but I do know many people who have worked themselves into jobs they just love. Beyond ego, they exemplify the idea that if you do something you love, you never work another day in your life.
Very thoughtful post.
I think retirement for physicians is a very difficult decision, particularly for those who consider medicine a “calling.” There are few professions other than medicine where “helping” people is the primary objective. Pharmaceutical companies “help” people, and so do restaurants, but I would argue that helping is a by-product of their primary goal of generating income. That may be the case for some physicians but probably not most and certainly not all.
Further, once a physician retires for more than a year or so, it can be near-impossible if not impossible to return to clinical medicine. That door is permanently closed.
I agree that one should retire “to” something rather than “from” something to maximize the chances of a successful retirement!
Locum tenens does offer the possibility of a flexible schedule and continuing one’s medical career outside of a permanent position and should be considered by those who would like to “ease” into retirement.
As you correctly point out, there is an opportunity cost to continuing to work as the world does offer many options, particularly for those who have achieved financial independence.
Thanks for a good discussion of a complex issue!
Greed is another bad reason to keep working when you can afford to do whatever you want. You have dealt elsewhere with the hedonic treadmill and the problem of not having a concept of “enough “. I am surprised at some of my colleagues who continue on , despite clearly not enjoying the work and having tremendous resources, because “the money is just too good “.