Changing Course #illumedati


Hey everyone, it’s Finance Fridays again. Today we’re going to talk a little about “Changing Course”.

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Changing Course?

Yea… this post doesn’t really pertain to me specifically, since I’m still hoping to stay on track for The 20 Year Career. However, this is more to illustrate that it’s important to be flexible and aware of what you want out of life.

So I have a good friend that shares similar financial goals as me. We agree on most things, however, his number is $4 million. Ever since I’ve known him that is the number he is saving toward in order to retire. Furthermore, his plan allows him to retire at 57 years old. In addition, he’s calculated that he will still be able to put a good amount of money away for his 3 kids in their 529s. As you can, he’s kind of planned this out pretty well.

As it stands right now, he works full time, or 1 Full Time Equivalent (FTE). His wife currently works 0.7 FTE, which is a little less than full time. All of this is within their plan for $4 million in retirement accounts by 57 years old as I described above.

Let’s give a little more background:

My friend is kind of the case study on what to do.

He and his wife are both physicians. However, his residency/fellowship was 6 years and hers was 3 years. They met in medical school and were able to live together for all residency/fellowship. For a portion of his training, she was working as a full time attending and making an attending salary. This helped them put money toward their loans and still live like residents — because, well, he still was in training anyways.

They took their first jobs over here and bought a reasonable house. Now they were both making attending money and putting money toward their loans. Then when they had some more children, they needed a bigger house and upsized just a little bit to a bigger, but still very reasonable house.

This has all allowed them to pay down all their loans and put away money in their 529s while still maximizing all available retirement accounts.

Basically, they did exactly what I advise everyone to do. Of course White Coat Investor and Physician On Fire advise the same thing. Unfortunately for me, my plan to pay down the loans so early after finishing training hit some snags because of moving, buying a house, etc. However, I was aware that these things were going to put me behind. That said, starting this year I think my wife and I will start making some real headway against our student loans. Soon™

So… he’s all set, why change course?

Well, life is all about flexibility.

My friend has been considering going down to 0.8 FTE, which equates to about 1 extra day off a week — or if you prefer a “4 day work week”. Of course, he’ll still have to take call, but we’ll leave that aside.

So instead of staying 1 FTE and retiring at 57, he’s considering dropping down to 0.8 FTE and pushing his retirement back a bit. I’m not sure he’s done the calculations, but I would guess it’s probably 60 or maybe 62.

Why is he changing course?

Well, as the saying goes “We’re not getting any younger.”

If you don’t have to work full-time, would you be happier working 0.8 FTE? I guess this kind of depends on you. As for me, my 20 Year Career plan is not to retire at 20 years, but more to give me the option to retire. More likely I will probably continue full-time until I decide to drop down to part-time, likely in some kind of phased retirement plan. However, I don’t really worry about these things because it’s a long ways away.

However, for my friend, he could probably drop down to 0.8 FTE this year if he really wanted to, with the understanding this would push back his retirement a few years.

So what now?

I guess the real question is, which option is better for him? Which makes him happier? What about you? Would you prefer to drop down to 0.8 FTE and push back retirement or stick to your plan and retire early? These are all questions with answers that are highly individualized.

In my case, because my schedule doesn’t really let me go down to 0.8 FTE, it’s not really an option for me. However, for others it might make sense. Having an extra day off a week may increase your happiness significantly. It may also help with “physician burnout” — a term which I still think is a misnomer. It should really just be Physician Dissatisfaction or Loss of Fulfillment or something like that.

Anyways, the point of this post is take the time to re-evaluate your current job. You may be surprised that the ability to go 0.8 FTE may not significantly impact your financially, but will increase your happiness and potentially lengthen your career as a physician. Give some thought to the possibly of Changing Course.

Just to clarify a bit. My 20 Year Career Plan isn’t necessarily for all physicians to up and retire at 20 years. It’s more to be financially comfortable and able to retire after 20 years. This would afford the possibility of going part-time or undergoing phased retirement. However, if you’re like my friend and think you can do it earlier (ahead of the curve), then that’s an option to consider whenever you’re ready.

TL;DR

You might have a retirement plan, but you can always change it.

The” you” when you wrote your retirement plan and the “you” now may be different people with different priorities.

Life is short. Be Happy.

Finance Fridays Sensei

-Sensei

Agree? Disagree? Questions, Comments and Suggestions are welcome.

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