PIMD welcomes Physician On Fire as our guest post. POF is a personal finance website created to inform and inspire both physicians and our patients with insightful writing from a physician who has attained financial independence and the ability to retire early.

1. You love your job.

You had a life-altering experience as a teenager. You made up your mind that you were going to help people. You studied your butt off for the next seven years and got into medical school. After three to six years of residency and perhaps another year or three in fellowship, you’re finally doing it! You’re a real doctor and you’re making a difference one day, one patient at a time.

This is what it’s all about. Truthfully, there are moments nearly every workday that remind me that I made the right choice and make me feel good about being a physician. When I do decide to move on, there are aspects of the career I will miss dearly.

A big part of my job as an anesthesiologist is to ease the fears and anxieties of my patients and their loved ones. We sometimes employ feel-good drugs to accelerate the process, but it’s often nothing more than a confident smile and a handshake, or connecting with a child at her level.

If you love what you’re doing, and don’t mind the nonsense and ever-shrinking hoops you’re asked to jump through, that’s a great reason to keep working. If you don’t love it, but mostly like it and enjoy the steady paycheck, that’s a good enough reason to keep working. I’d put myself in the latter category for the time being.

Once you’ve achieved all of your financial goals, ask yourself a simple question: If your job transitioned to being a volunteer (no compensation whatsoever), would you keep working? Would you scale back? The answers will help you decide if you truly love your job. If the answer is yes, you can keep right on working, because you love your job!

2. You Can’t Retire Early!

That private college was expensive. So was medical school. Sure, you lived like a resident… in medical school.

In residency, you leased a luxury SUV. You bought your dream house when you got your first dream job, and put it on the market two years later when it was time to look for your next dream job.

I’m not blaming you, I’ve made some unwise choices too. We make many financial decisions that will have consequences, good or bad. Some we will never regret. Other choices will have our older self wondering what on earth the younger self was thinking.

It’s tough to save money. Two car payments, mortgage and property taxes on a million dollar home in a high cost of living area, private school. These things cost serious $$$!

Nevermind what the studies say about spending and happiness (they say having more than $50,000 to $75,000 per year doesn’t significantly increase happiness)? They didn’t study you, did they? You’re not keeping up with Dr. Joneses, you are Dr. Jones. They all wish they could keep up with you.

You worked hard for this. And you will continue to work hard for a very, very long time, because once you and your family become accustomed to living a certain high-cost way, it’s really hard to scale back.

And what about colleges? 529s??? You can barely afford to max out your 401(k). You’re going to want to work until the kids have finished college. Then work some more to pay for a lavish wedding or two. And have you seen the price of arugula at Whole Foods? You don’t want to follow me down that rabbit hole! Don’t retire early; you can’t!

3. You’re walking away from Millions!

Let’s keep the math simple. If you can expect to make an average of $250,000 a year and retire at 45 instead of 65, you’re walking away from $5 MILLION in gross earnings. That’s a huge pile of cash. Of course, in the real world where we pay taxes and such, it’s not so simple, but an early retirement can be costly.

The only way I could justify walking away from millions is by having millions when I walk away. Sure, I could have more millions, but at what cost? I don’t need them, won’t spend them, and at some point, I will no longer be interested in trading time for money in the prime of my life.

Those additional millions will lock me into a higher tax bracket in retirement. It’s a good problem to have, but if I can save up 30x to 40x expenses, another 30x is simply unnecessary. I do feel a tinge of guilt when I think about the good I could do with additional money by donating it to cause better than my retirement life. I plan to eliminate that guilt by building up my Donor Advised Funds to about 10% of my nest egg before I leave clinical medicine for good.

“The only way I could justify walking away from millions is by having millions when I walk away.”

Gordon Gekko wouldn’t walk away from millions, and neither should you, so keep on working, for more millions!

4. You don’t know what else you would do.

After 20 years of 60-hour workweeks, you haven’t really had time for hobbies. The last time you had a week off and didn’t go anywhere, you felt lost and couldn’t decide what to do with yourself.

I hear this affliction is actually rather common. I’ve heard of plenty of physicians failing retirement. They stop working but not working simply doesn’t work for them. I think this is especially true if a spouse is still working.

It is said that it’s best to retire to something, not just from something. part time work or a sabbaticals can help people find out what that thing or things might be.

Personally, I can think of at least 50 things I’d like to do with more free time. But you’ve got to do what works for you, so keep working, what else could you possibly do?

5. You need health insurance.

This is a big one for the early retiree. Unless you have a working spouse with health benefits, have retire benefits from a previous employer, or expect to have Tricare after serving in the military, you’ll need to figure out how to bridge the gap from your early retirement age to the magical Medicare age of 65.

The Affordable Care Act (if it survives) can come into play here. If your MAGI (modified adjusted gross income) is reasonably low, which should be in an early retirement, you can qualify for a subsidy. For a family of 4 in 2019, MAGI needs to be below $100,400 to qualify for the lowest subsidy in the lower 48 states. For a couple, it’s $65,840, and $48,560 for an individual.

Lacking a good crystal ball, I’m not going to pretend to know what the health insurance landscape might look like in five or ten years. What I can do in the meantime is max out my HSA and plan on carrying a high deductible health plan. After all, if you are concerned about a $5,000 or $10,000 deductible making retirement difficult, you don’t really have enough to retire.

You need to be protected from the $500,000 bill that can come from having a medical catastrophe with no health insurance. As long as you’ve got that full time doctor job, you don’t need to worry about any of this, so keep working, for the health insurance!

What’s your #6? Why would you choose not to retire early?

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