How much do you save per year?

[Eyesore]

How much do you save per year?

Share what you are comfortable with, whether it is a percentage or actual dollar amount.

Is that pretax or post tax? Do you invest in individual stocks, index funds, bonds, rental properties, business franchises?

Do you have a set number ($) before you retire, or slow down, or set age to retire?

Is anyone considering FIRE (financial independence retire early) and planning accordingly? If so, what is you strategy?

With current uncertainty in healthcare, I'm curious to see what others are doing or planning.

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[PistolPete]

My goal is 20% to retirement, 20% to student loans (both pre-tax), 35% to taxes, and live off the remaining 25%, for the next 1-2 years. I invest in index funds.
My goal is about a $3 million nest egg in retirement savings, slowing down at around age 55, then completely retire at 57-58 or so.

 

[tartesos]

Not enough


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[Plastikos]

Savings rate is about 38%/yr +/- 2% depending on the year, post tax I believe (as you cant control that part beyond what you can do). I include principal payments on things like student loans and equity into home/rental properties.

Set number? Not really, but 3m would be about right, I would love to be absolutely finished by 55, the sooner the better. The more assets I have the more I feel medicine is a liability.

I am mostly in the market through typical accounts and taxable, but do have a rental property now as well. We'll see how that goes and if its not too annoying I will expand that, otherwise will probably move into syndicated deals as it becomes more similar for taxes/return and less overall hassle. Always coming up with something else to do, hopefully I follow through one day and give it a go.

 

[DrCommonSense]

Savings rate is about 38%/yr +/- 2% depending on the year, post tax I believe (as you cant control that part beyond what you can do). I include principal payments on things like student loans and equity into home/rental properties.

Set number? Not really, but 3m would be about right, I would love to be absolutely finished by 55, the sooner the better. The more assets I have the more I feel medicine is a liability.

I am mostly in the market through typical accounts and taxable, but do have a rental property now as well. We'll see how that goes and if its not too annoying I will expand that, otherwise will probably move into syndicated deals as it becomes more similar for taxes/return and less overall hassle. Always coming up with something else to do, hopefully I follow through one day and give it a go.

Correct, medicine (particularly high risk specialists) becomes a much bigger liability as one accumulates assets.

When an MBA calculates doing a "deal" in business, they use a NPV calculation to determine if future Discounted Cash Flows will be sufficient to make a profit with an initial investment. This calculation can be used for "assets" of a physician that are exposed to liability (outside of 401K or homesteaded house in Texas or Florida) to determine the salary you would need to make post tax to obtain the current value of your assets.

For instance, say one has 3 million in EXPOSED assets (normal insurance policy is 1m/3M). A physician would require making approximately 300K post tax for 30 years to obtain 3 million in current dollars using a discount rate of 6%. Remember 300K is is worth alot less in 30 years than now.

Assuming a growth rate in terms of future salaries (very unlikely considering Obamacare for most specialities), the future DCF number is a little more tricky and can be slightly lower considering an approximately 2-3% growth rate in salaries over 30 years.

Ergo, placing oneself in large liability for under 300K post tax if one has more than 3 million in exposed assets is very problematic from a business perspective (300K posttax is about 500K+ a year in salary, particularly for NY/CA).

When a lawyer gets a forensic account to determine your net worth and finds you have 3 million in exposed assets, its GAME ON. If he gets a judgement for 10 million, don't expect them to "settle" for just your insurance policy limits when they can get far more.

 

[QofQuimica]

As an attending, I've been saving about $169,000 per year. This works out to be more than 100% of my net pay (low expenses and also have a 457 and an employer match as well as my 403b), and about 60% of my gross (no state taxes, but I do have to pay federal income tax and payroll taxes). I invest in mutual funds, a state annuity plan, US savings bonds, and ETFs. The mutual funds and ETFs are all index, none active. The money is pretty evenly divided among a Roth IRA, the 403b, a taxable account, and the US savings bonds/annuity.

I will be quitting my job in about six weeks to go back for a fellowship, and I do not intend to take another FT faculty job afterward as I will be FI by the time I finish the fellowship at age 44. I am thinking of myself as about to be semi-retired. No set age to completely retire; I'll quit when I decide it's not fun to work any more. For that reason reaching FI is very important to me. The RE part is less so. I kind of feel that most people who are Type A enough to FIRE are probably not going to be happy being put out to pasture playing shuffleboard all day. Basically, you need something to retire TO, particularly if you are a goal-oriented, motivated person. Which is why I decided to pursue this fellowship in an area that is not particularly remunerative but is a special interest of mine. Had I not decided to do that, my plan was to go to PT work after this year. I still may do that after my fellowship. Oh, and definitely no more nights (I've been working as a nocturnist for the past couple of years.)

 

[Mman]

How much do you save per year?

Share what you are comfortable with, whether it is a percentage or actual dollar amount.

Is that pretax or post tax? Do you invest in individual stocks, index funds, bonds, rental properties, business franchises?

Do you have a set number ($) before you retire, or slow down, or set age to retire?

Is anyone considering FIRE (financial independence retire early) and planning accordingly? If so, what is you strategy?

With current uncertainty in healthcare, I'm curious to see what others are doing or planning.

My wife and I currently save roughly (as percentage of gross salary)

13.8% to individual stock/bonds in brokerage account (post tax)
12.5% to paying off student loans/saving towards new home contruction (post tax)
6.5% to 401K (pre tax, as self employed that is maxed contribution allowed)
6.4% contributing to pension plan (pre tax)
1.4% to backdoor Roth (post tax)
1.3% to 529 plan (post tax)
0.8% of gross salary to HSA (pre tax)

Throw another 40% towards taxes (give or take) and we live on about 20% of our gross pay. We have no mortgage or car payments. She'll probably stop working in another few years and I'd like to get our retirement savings up to about $5M or so and then cut back to half time. I could see myself working half time for 10 years or so to provide insurance and enough income to not dip into savings while letting what's there double or more in value (hopefully) and still having plenty of time off to enjoy life.

 

[DrCommonSense]

My wife and I currently save roughly (as percentage of gross salary)

13.8% to individual stock/bonds in brokerage account (post tax)
12.5% to paying off student loans/saving towards new home contruction (post tax)
6.5% to 401K (pre tax, as self employed that is maxed contribution allowed)
6.4% contributing to pension plan (pre tax)
1.4% to backdoor Roth (post tax)
1.3% to 529 plan (post tax)
0.8% of gross salary to HSA (pre tax)

Throw another 40% towards taxes (give or take) and we live on about 20% of our gross pay. We have no mortgage or car payments. She'll probably stop working in another few years and I'd like to get our retirement savings up to about $5M or so and then cut back to half time. I could see myself working half time for 10 years or so to provide insurance and enough income to not dip into savings while letting what's there double or more in value (hopefully) and still having plenty of time off to enjoy life.

How much wealth would you believe is sufficient to avoid higher risk specialties? If one has >7M (or less like 3M?).

That is the most interesting stuff.

 

[Mman]

How much wealth would you believe is sufficient to avoid higher risk specialties? If one has >7M (or less like 3M?).

That is the most interesting stuff.

that is a totally state dependent issue. I practice in a state with a low cap on pain and suffering awards and it's been a long time since a doc got an award beyond their med mal limit here. My advice would be not to practice in a state with a bad med mal environment if you have significant assets that you haven't shielded. If you do practice in such a state, consult an attorney on how to structure your estate and you can mostly mitigate that risk anyway.

 

[Chromium Surfer]

I have no knowledge or experience in this area. But if someone were to retire at age 65, how much money in savings should they have accumulated? Also how is this retirement money utilized? Let's say you saved 3M would you live off the interest, or take a fixed amount such as 100k out per year for 30 more years?

 

[Mman]

I have no knowledge or experience in this area. But if someone were to retire at age 65, how much money in savings should they have accumulated? Also how is this retirement money utilized? Let's say you saved 3M would you live off the interest, or take a fixed amount such as 100k out per year for 30 more years?

Probably not living off the interest. $3M in an account that yielded 1% would only be $30K per year. Most people would suggest withdrawing 3-4% of the total value each year to live off and that would theoretically sustain you for 30+ years regardless of what the stock market does. 4% withdrawal would be $120K per year. There are other more complicated formulas.

The nitty gritty details depend on where that $3M is. If it's in a 401k, you need to pay taxes on the earnings you withdraw each year. Withdrawals from a Roth would require no additional tax payments. For most people it's in a combination of places.

 

[QofQuimica]

I have no knowledge or experience in this area. But if someone were to retire at age 65, how much money in savings should they have accumulated? Also how is this retirement money utilized? Let's say you saved 3M would you live off the interest, or take a fixed amount such as 100k out per year for 30 more years?

How much money you need depends entirely on your expenses. If you can live on $20,000 per year, you'll need to accumulate much less money than someone who requires $100,000 per year. It also depends on your legacy goals for your money. If you want to leave an inheritance for your heirs, you will need to save more money than if you intend to use it all up yourself.

What I suggest you do is to spend some time recording all of your expenses. Figure out exactly how much you're spending per month or year, and use that to give you an idea of how much you need. If you retire at age 65, a 30 year retirement life expectancy is customary, in which case a 4% withdrawal rate (both from dividends, which run about 2% on average, and from selling some of your funds) is likely conservative and reasonable. Google the Trinity Study for more info regarding the genesis of this 4% rule.

 

[Mman]

If you retire at age 65, a 30 year retirement life expectancy is customary, in which case a 4% withdrawal rate (both from dividends, which run about 2% on average, and from selling some of your funds) is likely conservative and reasonable. Google the Trinity Study for more info regarding the genesis of this 4% rule.

While I understand the 4% rule for most folks, if I was counseling a physician I'd probably argue for planning purposes to use a 3% rule. Why? Doesn't hurt to be conservative when forecasting future returns. Personally I'm going with a 2% rule in my longterm forecasting. The downside is I might work a little longer. The upside is substantially lower likelihood of having to adjust spending downward unexpectedly and if I have too much money in the end, my children and charities will thank me later.

 

[QofQuimica]

While I understand the 4% rule for most folks, if I was counseling a physician I'd probably argue for planning purposes to use a 3% rule. Why? Doesn't hurt to be conservative when forecasting future returns. Personally I'm going with a 2% rule in my longterm forecasting. The downside is I might work a little longer. The upside is substantially lower likelihood of having to adjust spending downward unexpectedly and if I have too much money in the end, my children and charities will thank me later.

Curious why you'd counsel a physician any differently than you'd counsel anyone else. I'll happily grant that people like me with a RLE that is significantly longer than 30 years need to be cautious when extrapolating the Trinity study findings. But if you accept the Trinity findings, which are actually on the conservative side (meaning that in fact, people who retired in most periods could have taken a HIGHER than 4% safe withdrawal rate without ever using up their funds), I don't see what being a physician versus being in any other career has to do with anything.

Also, for those who are looking to retire, your downside of having to work "a little longer" is a pretty major one. As physicians, we're in a better position than most to understand that life is short, and bad s*** can happen to young people. It does hurt to be unwarrantedly conservative if that means you delay or never develop other important parts of your life because you're busy chasing a false sense of security that you can never actually achieve. I mean, why stop at a 2% SWR if you're not convinced by Trinity? There are no studies proving that a 2% SWR is guaranteed to work for all future market conditions. So go for 1%, or half a percent, or just keep working until you drop....

 

[Mman]

Curious why you'd counsel a physician any differently than you'd counsel anyone else. I'll happily grant that people like me with a RLE that is significantly longer than 30 years need to be cautious when extrapolating the Trinity study findings. But if you accept the Trinity findings, which are actually on the conservative side (meaning that in fact, people who retired in most periods could have taken a HIGHER than 4% safe withdrawal rate without ever using up their funds), I don't see what being a physician versus being in any other career has to do with anything.

Also, for those who are looking to retire, your downside of having to work "a little longer" is a pretty major one. As physicians, we're in a better position than most to understand that life is short, and bad s*** can happen to young people. It does hurt to be unwarrantedly conservative if that means you delay or never develop other important parts of your life because you're busy chasing a false sense of security that you can never actually achieve. I mean, why stop at a 2% SWR if you're not convinced by Trinity? There are no studies proving that a 2% SWR is guaranteed to work for all future market conditions. So go for 1%, or half a percent, or just keep working until you drop....

1) physicians have higher incomes than the general population and likely more expensive lifestyles which creates a bigger potential downside than a less expensive lifestyle when you have social security as a theoretical backstop. For example, if you are going to live on 40K a year for the rest of your life and can collect 20K a year in social security, you only take a 50% hit in annual spending money if your savings go to zero. If you are living on 100K a year, it's a much bigger hit if your savings run out.
2) why stop at 2%? I said that's for me, not everybody. I'll likely be there before age 50 but will still work part time beyond that. I'm not retiring at age 45 just because I have a bunch of money in the bank. Working a little longer isn't some horrible thing when you love your job. You can even just work part time to cover living expenses while your nest egg continues to grow.
3) why base your entire decision on the trinity study? it's a piece of evidence as to what would have worked in the past, but like they say past performance is no guarantee of future performance. Being on the conservative side when planning your retirement to me is a lot less risky than having a significantly higher risk of running out of money. Will the stock market returns in the future be identical to those in the past? Perhaps, but you can't be sure. US GDP likely won't grow as fast the next 100 years as it did the last 200 years for many reasons (slowing population growth, no more industrial revolution, etc) so it's probably unlikely you see the same equity returns.

I counsel all to be conservative when planning how much money they need to retire. Once you retire, you aren't ever going back to work. Some people pretend like they could depending on how things went, but they won't, especially physicians. The simple act of obtaining a medical license can be a huge pain in the butt if you are out of work for a period of time, let alone getting credentialed.

The worst thing that happens if you save a little too much money is that your children or charities can inherit more from you.

 

[QofQuimica]

1) physicians have higher incomes than the general population and likely more expensive lifestyles which creates a bigger potential downside than a less expensive lifestyle when you have social security as a theoretical backstop. For example, if you are going to live on 40K a year for the rest of your life and can collect 20K a year in social security, you only take a 50% hit in annual spending money if your savings go to zero. If you are living on 100K a year, it's a much bigger hit if your savings run out.

Ah, this is the rub. Too much lifestyle creep can definitely lay waste to the best laid plans. But that risk applies to all professionals with six figure incomes, not just physicians. And I think it's fair to argue that SS is also not guaranteed, and if you REALLY want to be conservative, then you ought not factor it in. Which I'm not. It's probably fair to say that ignoring SS in one's future retirement plans is extremely conservative, since it seems likely that even we Gen Xers will eventually end up with some kind of SS. But I'm pretending that I won't.

2) why stop at 2%? I said that's for me, not everybody. I'll likely be there before age 50 but will still work part time beyond that. I'm not retiring at age 45 just because I have a bunch of money in the bank. Working a little longer isn't some horrible thing when you love your job. You can even just work part time to cover living expenses while your nest egg continues to grow.

That's actually what I'm doing. But I don't love my job; I've already resigned from it; and I would not be willing to continue doing it FT until I was 45 or 50 when I can afford to stop doing it FT at age 42.

3) why base your entire decision on the trinity study? it's a piece of evidence as to what would have worked in the past, but like they say past performance is no guarantee of future performance. Being on the conservative side when planning your retirement to me is a lot less risky than having a significantly higher risk of running out of money. Will the stock market returns in the future be identical to those in the past? Perhaps, but you can't be sure. US GDP likely won't grow as fast the next 100 years as it did the last 200 years for many reasons (slowing population growth, no more industrial revolution, etc) so it's probably unlikely you see the same equity returns.

We can't be sure of anything regarding future market performance, which is the point. The Trinity study is based upon previous market outcomes, which we agree may or may not hold in the future. But there's no reason to pick any other number and hold it up as being any "safer" or more accurate than their 4% number either. It's not like we can do a prospective experiment to see what the SWR will be from now until the end of mankind's use of money. Maybe 2% won't be safe either. We have no way to know until after the fact.

I counsel all to be conservative when planning how much money they need to retire. Once you retire, you aren't ever going back to work. Some people pretend like they could depending on how things went, but they won't, especially physicians. The simple act of obtaining a medical license can be a huge pain in the butt if you are out of work for a period of time, let alone getting credentialed.

I'm amazed at how many people seem to believe this, since it's been at such odds with my own experience as a nontrad. I'm currently in the midst of reinventing myself now for the third time in a third career because I don't like the second one. If I don't like this career either and I'm still not ready to fully retire, no big deal; I'll simply move on to a fourth one. The only reason I can think of that someone who retires early from medicine due to not loving it would even consider going back is because they can't control their lifestyle creep. Which gets back to our first point above. But speaking as someone who has not had lifestyle creep, I don't need a six figure salary. My personal expenses run around $30k per year, and there are lots of other ways to make money besides being a physician to cover that amount. I'd also be willing to do other things like geoarbitrage to cut my expenses even further if it were necessary. In fact, I may do it again regardless for a while just for the fun and adventure of living abroad.

The worst thing that happens if you save a little too much money is that your children or charities can inherit more from you.

I would say that dying without ever really living is the worst thing that can happen if I save too much money. :-/

 

[Mman]

We can't be sure of anything regarding future market performance, which is the point. The Trinity study is based upon previous market outcomes, which we agree may or may not hold in the future. But there's no reason to pick any other number and hold it up as being any "safer" or more accurate than their 4% number either. It's not like we can do a prospective experiment to see what the SWR will be from now until the end of mankind's use of money. Maybe 2% won't be safe either. We have no way to know until after the fact.

If you can't understand the simple math of how planning to save twice as much money for a 2% SWR compared to a 4% SWR is far less likely to run out of money and hence "safer", well I don't know what to say. It's math. Sure, maybe 2% won't be safe, but it has an infinitely less likelihood (relatively) of running out compared to 4%.

And if you are retiring early partly because you hate your job, that advice isn't exactly transferrable to others. Most physicians, while being frustrated by bureaucracy, still enjoy their clinical work. And the vast majority of physicians that retire absolutely cannot go back to any sort of work generating nearly the income they had previously.

 

[Mman]

I would say that dying without ever really living is the worst thing that can happen if I save too much money. :-/

Why can't you do that while working? In the last 5 years I've been to more tropical islands than I can remember from Tahiti to Hawaii to all over the Caribbean. You can work and have fun at the same time if you find a job with enough vacation.

 

[EllieHan]

I save 20% of my wage each month, its my main priority!

 

[thesauce]

Currently saving between 60 and 70% my income

 

[PistolPete]

Currently saving between 60 and 70% my income

Wow.

 

[WinslowPringle]

As a resident, am saving about 12% of net yearly income (10% to Roth IRA, 2% to emergency fund currently). 30% of net yearly income goes to student loans; on 10 year repayment plan for now but they should be paid off within the first year of becoming an attending.

Set number for me to feel free to completely retire is $800K, primarily index funds. Goal is to hit this by age 35. I probably won't 100% completely 'retire' but I want the freedom to do what I want to do and how I want to do it and on my own schedule.

 

[thesauce]

Wow.

Yeah - I'm not suffering either. I have a great lifestyle and plenty of hobbies. I don't say no to anything aside from big expensive (depreciating) purchases like cars, boats, etc and that's just because I don't really want them.

 

[thesauce]

As a resident, am saving about 12% of net yearly income (10% to Roth IRA, 2% to emergency fund currently). 30% of net yearly income goes to student loans; on 10 year repayment plan for now but they should be paid off within the first year of becoming an attending.

Set number for me to feel free to completely retire is $800K, primarily index funds. Goal is to hit this by age 35. I probably won't 100% completely 'retire' but I want the freedom to do what I want to do and how I want to do it and on my own schedule.

$800k? Seems low - how did you come up with that #?

 

[WinslowPringle]

$800k? Seems low - how did you come up with that #?

Looking for a base yearly withdrawal of ~$30K at 3-4% SWR. $800k is what I want in my investment accounts, not total net worth, to feel secure enough to fully retire.

 

[QofQuimica]

Why can't you do that while working? In the last 5 years I've been to more tropical islands than I can remember from Tahiti to Hawaii to all over the Caribbean. You can work and have fun at the same time if you find a job with enough vacation.

Because it doesn't seem possible to find an employer who will pay me to be on perennial vacation.

All kidding aside, a week isn't enough for a trip like that. I'm just getting over the jet lag at that point. When I went to Hawaii, I worked in Honolulu for a month. I had enough time and energy to basically see everything there was to see on the island of Oahu without being in a frenetic rush. It was a fantastic trip, because it was exactly the right length of time. I guess I just feel like if I have to take periodic week-long vacations to escape from the drudgeries of my "real life," I would still be kinda missing the point.

If you can't understand the simple math of how planning to save twice as much money for a 2% SWR compared to a 4% SWR is far less likely to run out of money and hence "safer", well I don't know what to say. It's math. Sure, maybe 2% won't be safe, but it has an infinitely less likelihood (relatively) of running out compared to 4%.

My point is that it's an arbitrary number. I think you get my point and will concede your ability to understand math.

And if you are retiring early partly because you hate your job, that advice isn't exactly transferrable to others. Most physicians, while being frustrated by bureaucracy, still enjoy their clinical work. And the vast majority of physicians that retire absolutely cannot go back to any sort of work generating nearly the income they had previously.

So what? I don't NEED that much income. And while I don't hate clinical work, no, I don't love my job enough that it makes up for the downsides. It would be nice if it did, but it just doesn't. I'm glad it's working for you, and I hope it stays that way. But speaking as someone who is quitting, I suspect a lot more of our colleagues than you might expect would quit their jobs (and maybe even medicine altogether) if they felt like they could. I've been kind of shocked myself.

Set number for me to feel free to completely retire is $800K, primarily index funds. Goal is to hit this by age 35. I probably won't 100% completely 'retire' but I want the freedom to do what I want to do and how I want to do it and on my own schedule.

That's my goal too, except I'm ten years older than you. Nothing wrong with that goal, but make sure to build in some flexibility too. And don't forget about inflation. $30k now won't be the same as $30k in ten years, and just because we've had low inflation throughout your entire lifetime doesn't mean that will automatically hold going forward. If you need $800k in today's dollars, and you assume a 3.5% inflation rate (high for recent actual inflation but not historically overall), then ten years later, that will be more like $1.1 million. Twenty years later, it will be $1.6 million.

 

[PhysicianOnFIRE]

How much do you save per year?

Is that pretax or post tax? Do you invest in individual stocks, index funds, bonds, rental properties, business franchises?

Do you have a set number ($) before you retire, or slow down, or set age to retire?

Is anyone considering FIRE (financial independence retire early) and planning accordingly? If so, what is you strategy?

I'll do my best to answer all questions:

Saving just over 50% of gross income, and a little under 80% of net (after taxes). I created an excel-based online calculator to come up with these figures.

After covering our ongoing annual expenses of ~ $70,000 a year (mortgage-free family of 4), I can set aside an additional 3+ years of expenses.

FIRE, yes! Check the avatar.

My main strategy is a high savings rate, proven investment strategy (Bogleheads style), and living well, but well below my means.

FIRE target is a combination of a target $ amount, date, and age. I've decided to make a change when I'm fully vested in my 401(k), which will happen in about 18 months. At that time, I will be 42, should have at least 33x annual expenses worth in investments, and I'm exploring the possibility of working as a locum in NZ or AUS as the first of several family adventures we are considering.

Cheers!
-PoF

 

[jacksparrow82]

POF, that sounds like an awesome plan! I have never calculated how much I'm actually saving on a yearly basis. This year has been kind of crazy. I'm able to save about 6000/month from my regular paychecks in addition to the money that's going into my 401k, HSA, and my wife's 401K. Next year I plan on making sure we fully max out our 401Ks, Backdoor ROTH IRAs, and save as much as possible in addition to that. I just don't know exactly how much that will be yet because I'm getting a new job.

 

[PhysicianOnFIRE]

POF, that sounds like an awesome plan! I have never calculated how much I'm actually saving on a yearly basis. This year has been kind of crazy. I'm able to save about 6000/month from my regular paychecks in addition to the money that's going into my 401k, HSA, and my wife's 401K. Next year I plan on making sure we fully max out our 401Ks, Backdoor ROTH IRAs, and save as much as possible in addition to that. I just don't know exactly how much that will be yet because I'm getting a new job.

Sounds like a lot of saving to me. Strong work!

 

[Smart Money MD]

As an attending, I've been saving about $169,000 per year. This works out to be more than 100% of my net pay (low expenses and also have a 457 and an employer match as well as my 403b), and about 60% of my gross (no state taxes, but I do have to pay federal income tax and payroll taxes). I invest in mutual funds, a state annuity plan, US savings bonds, and ETFs. The mutual funds and ETFs are all index, none active. The money is pretty evenly divided among a Roth IRA, the 403b, a taxable account, and the US savings bonds/annuity.

I will be quitting my job in about six weeks to go back for a fellowship, and I do not intend to take another FT faculty job afterward as I will be FI by the time I finish the fellowship at age 44. I am thinking of myself as about to be semi-retired. No set age to completely retire; I'll quit when I decide it's not fun to work any more. For that reason reaching FI is very important to me. The RE part is less so. I kind of feel that most people who are Type A enough to FIRE are probably not going to be happy being put out to pasture playing shuffleboard all day. Basically, you need something to retire TO, particularly if you are a goal-oriented, motivated person. Which is why I decided to pursue this fellowship in an area that is not particularly remunerative but is a special interest of mine. Had I not decided to do that, my plan was to go to PT work after this year. I still may do that after my fellowship. Oh, and definitely no more nights (I've been working as a nocturnist for the past couple of years.)

Impressive that you had the savings goals planned out! Is the family on board with this?

 

[QofQuimica]

Impressive that you had the savings goals planned out! Is the family on board with this?

The ex was an unabashed spendthrift and almost certainly would not have been on board with it. But he wasn't on board with me going to medical school in the first place, so the point is kind of moot. My sister and BIL are thrilled with it; I'm paying for both of their kids' college. I don't think anyone else really cares one way or the other.

 

[Smart Money MD]

The ex was an unabashed spendthrift and almost certainly would not have been on board with it. But he wasn't on board with me going to medical school in the first place, so the point is kind of moot. My sister and BIL are thrilled with it; I'm paying for both of their kids' college. I don't think anyone else really cares one way or the other.

Financial agreement between two spouses almost seems to be universally challenging, but I see a lot of tension in high income households, especially when a spendthrift spouse has difficulty justifying cutting back on the expenditures when there is usually a consistent and sizable deposit in the bank account every few weeks.

Did you contribute college funds through a 529? Another good way to cut down on some tax burden for their education.

 

[QofQuimica]

Financial agreement between two spouses almost seems to be universally challenging, but I see a lot of tension in high income households, especially when a spendthrift spouse has difficulty justifying cutting back on the expenditures when there is usually a consistent and sizable deposit in the bank account every few weeks.

Did you contribute college funds through a 529? Another good way to cut down on some tax burden for their education.

Oh, we never made it to the point of being a high income household. We didn't even survive grad school. You definitely don't need to be earning a lot of money to want to spend more than you have.

Each child has two 529s: one is a prepaid tuition fund through the state of Florida, and the other is the regular kind of 529 that most people think of as a college fund. Since FL has no income tax, and both types of accounts are funded with post-tax dollars, there is no tax advantage to me from using the regular state 529 here. In fact, I opened the regular 529s with Utah's 529 program, which offers much better low-cost investing options than ours does. However, there is still some tax advantage in that the earnings on the Utah 529 account contributions will not be taxed if withdrawals are used for approved educational expenses.

 

[FrugalMuscle]

1. I save 60%+ post-tax, no debts whatsoever
2. Mostly index and bonds
3. $2 million to FIRE
4. Save and accumulate as much as humanly possible.

 

[PistolPete]

1. I save 60%+ post-tax, no debts whatsoever
2. Mostly index and bonds
3. $2 million to FIRE
4. Save and accumulate as much as humanly possible.

What age do you want to retire by?

 

[FrugalMuscle]

What age do you want to retire by?

I want to retire before 40. Whether or not I get there is to be seen...

 

[PistolPete]

I want to retire before 40. Whether or not I get there is to be seen...

Dang! What will you do with your life at age 41?

 

[jacksparrow82]

We should be around a 60% savings rate from this point forward. Not all of this will go to long term retirement savings though. I put money aside each month for stuff like vacations or if we need a new car or if we need to do a home improvement project. If you take out that money out of the equation our rate is closer to 55%. I'd like to downsize our house actually and live somewhere even cheaper. It would allow us to be even more aggressive with our savings, which I would love. We like our current house though, just not the bills it generates

 

[FrugalMuscle]

Dang! What will you do with your life at age 41?

Everyone's definition of "retirement" is different. I won't be sipping on pina coladas in Hawaii. But you sort of have to take a step back and think about what you'd like to do if money wasn't a factor whatsoever. For me, I'd probably work part time, volunteer a lot more, travel the world. Everyone has their own cup of tea though.

 

[DrCommonSense]

that is a totally state dependent issue. I practice in a state with a low cap on pain and suffering awards and it's been a long time since a doc got an award beyond their med mal limit here. My advice would be not to practice in a state with a bad med mal environment if you have significant assets that you haven't shielded. If you do practice in such a state, consult an attorney on how to structure your estate and you can mostly mitigate that risk anyway.

I don't see many reliable plans to shield one's assets from medmalpractice.

In FL and TX, you have unlimited homestead. 401K is also protected in all states.

Any assets outside of this are free game. You can setup an LLC with another state for some protection or an irrevocable trust that gives away your assets to a trustee.

There aren't any great options.

 

[Mman]

I don't see many reliable plans to shield one's assets from medmalpractice.

In FL and TX, you have unlimited homestead. 401K is also protected in all states.

Any assets outside of this are free game. You can setup an LLC with another state for some protection or an irrevocable trust that gives away your assets to a trustee.

There aren't any great options.

It all depends on what state you live in.

 

[sweetlenovo88]

I live on 10% of my pretax income. And quite comfortably.

 

[Merely]

I live on 10% of my pretax income. And quite comfortably.

Do u make like 800k? lol

 

[sweetlenovo88]

Do u make like 800k? lol

I plan to one day. At this time, my income varies, but right now I live on 50k a year pretax.

 

[sazerac]

How much do you save per year?

Share what you are comfortable with, whether it is a percentage or actual dollar amount.

Is that pretax or post tax? Do you invest in individual stocks, index funds, bonds, rental properties, business franchises?

Do you have a set number ($) before you retire, or slow down, or set age to retire?

Is anyone considering FIRE (financial independence retire early) and planning accordingly? If so, what is you strategy?

With current uncertainty in healthcare, I'm curious to see what others are doing or planning.

I save negative four percent of my investments every year. In another words, every 3 months like clockwork I sell 1% of my mutual fund and live off of it until the next quarter. I have been doing this since 1998. I find investing in a mutual fund at Vanguard is the perfect intersection (for me anyway) of maximum yield, minimal effort, and low losses to fees.

I never really had a set "number" (back then it was called "FU money"), just more of a realization in the mid-90s that pretty soon I could probably quit working and be financially satisfied with the resulting lifestyle. I guess I was right.

FIRE allowed me to pursue my hobbies, interests and adventures, which eventually led me to graduating medical school in a few months, debt free. FIRE has been a cool way to live the last two decades, but I'm ready to "be productive" again for a variety of reasons, none of them financial. My specialty (psychiatry) will allow me to work to a ripe old age if I feel like it. Right now I have no plans to retire again. Been there, done that, got other stuff I'd rather be doing.

 

[sweetlenovo88]

I save negative four percent of my investments every year. In another words, every 3 months like clockwork I sell 1% of my mutual fund and live off of it until the next quarter. I have been doing this since 1998. I find investing in a mutual fund at Vanguard is the perfect intersection (for me anyway) of maximum yield, minimal effort, and low losses to fees.

I never really had a set "number" (back then it was called "FU money"), just more of a realization in the mid-90s that pretty soon I could probably quit working and be financially satisfied with the resulting lifestyle. I guess I was right.

FIRE allowed me to pursue my hobbies, interests and adventures, which eventually led me to graduating medical school in a few months, debt free. FIRE has been a cool way to live the last two decades, but I'm ready to "be productive" again for a variety of reasons, none of them financial. My specialty (psychiatry) will allow me to work to a ripe old age if I feel like it. Right now I have no plans to retire again. Been there, done that, got other stuff I'd rather be doing.

Freshly minted psychiatrist here. You became FIRE through some sort of venture and then later went to medical school/residency?

 

[sazerac]

Freshly minted psychiatrist here. You became FIRE through some sort of venture and then later went to medical school/residency?

Yes. Medicine is my second or third career, depending on if you count "spending a dozen years screwing around inventing problems and solving them" a career. The pay was terrible, but you couldn't beat the view from the office (which was often a boat's cockpit or a mountaintop).

 

[sweetlenovo88]

Yes. Medicine is my second or third career, depending on if you count "spending a dozen years screwing around inventing problems and solving them" a career. The pay was terrible, but you couldn't beat the view from the office (which was often a boat's cockpit or a mountaintop).

Sounds like you live an interesting life. I plan on boating one day

 

[WisNeuro]

With my contributions and 401k match, I get 20% stocked away immediately. Depending on fluctuating expenses, I have other investment accounts and average probably another 5%ish in those investments a year. No debts of my own, some passive income. Once my wife is done with residency, supercharge paying off her expenses, once those are done, she'll fatstrack her retirement accounts.

 

[The White Coat Investor]

A lot. My savings rate has varied during my time as an attending from 25% of gross to 65% of gross. My income has gone up a lot lately. I think I'm probably saving about 2/3 of net income so far this year.

20% of gross for a "standard" retirement (60ish.) More if you want to retire early or at least have the option to.