What's Your Number?

[BLADEMDA]

Residents and Attendings, It is never too early or too late to be thinking about retirement. At what age and what number would you like to retire? What is your plan to get there? Will you have enough money to retire at age 60 or 65?

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[BLADEMDA]

Have you figured out your plan to get there? Will your 401K, IRA, 403B, etc get you there? Will you be spending $150K per year in retirement?

 

[BLADEMDA]

 

[BLADEMDA]

 

[BLADEMDA]

 

[BLADEMDA]

 

[BLADEMDA]

Before WW2 most men in the USA worked until they died. The entire concept of retirement is a 20th century invention. I suspect quite a lot of you will be working into your late 60's or early 70s as the amount of money to retire on exceeds the $5 million threshold.

Doze made me aware that the REAL number is much higher than I originally thought it would be.

 

[Noyac]

I have no good real number and no idea what it should be. Therefore, I keep saving as much as I can comfortably put away. Every 401K, 403B and 457B are receiving max contributions. Then I have my outside person retirement portfolio. I contribute more to this one than the other 3 combined. Will I have enough by age 60? I have no idea.

 

[BLADEMDA]

 

[BLADEMDA]

Look at the actuarial table in the previous post. Those who retire early (before age 60) live a lot longer than those retiring after age 65.

This table is proof that stress shortens ones life expectancy.


http://www.theonlinecitizen.com/2007/07/374/

 

[BLADEMDA]

According to data compiled by the Social Security Administration:

• A man reaching age 65 today can expect to live, on average, until age 84.
• A woman turning age 65 today can expect to live, on average, until age 86.

And those are just averages. About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95.

 

[BLADEMDA]

Essential Number For Retirement Planning: Your Personal Life Expectancy

http://www.forbes.com/sites/janetno...ement-planning-your-personal-life-expectancy/

 

[BLADEMDA]

Will you have enough to retire?

http://money.cnn.com/calculator/retirement/retirement-need/


Well, Will you have enough money at your designated retirement age?

 

[BLADEMDA]

http://www.schwab.com/public/schwab...and_planning/retirement/retirement_calculator

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[okayplayer]

Hard to know. We are not shooting for a number per say, but will be disciplined about taking money out before we can spend it.

My wife and I are planning on putting 15% of our gross income into some type of retirement account (in order, maxing 401k for me, 403B/457 for her, and then the rest in backdoor Roth IRA/taxable accounts). If we work until 60 and get a 6% return (not a given obviously) that will give us $8.5m. If we work until 65 with the same return $12m. Of course, social security will also be helpful, as will not having a mortgage payment.

 

[BLADEMDA]

Hard to know. We are not shooting for a number per say, but will be disciplined about taking money out before we can spend it.

My wife and I are planning on putting 15% of our gross income into some type of retirement account (in order, maxing 401k for me, 403B/457 for her, and then the rest in backdoor Roth IRA/taxable accounts). If we work until 60 and get a 6% return (not a given obviously) that will give us $8.5m. If we work until 65 with the same return $12m. Of course, social security will also be helpful, as will not having a mortgage payment.

Great post and a great plan. You can always work FULL TIME until age 60 then cut back until age 65 allowing your nest egg to grow above $10 million.

JPP, you and me all agree on the $10 Million plus number.

 

[Silent Cool]

Great post and a great plan. You can always work FULL TIME until age 60 then cut back until age 65 allowing your nest egg to grow above $10 million.

JPP, you and me all agree on the $10 Million plus number.

Blade,
Do you expect to have 10 mil at retirement?

 

[BLADEMDA]

Blade,
Do you expect to have 10 mil at retirement?

Absolutely. I've had a nice run over the past 14 years despite the stock market. Doze gave me a dose of reality about what sum it takes to retire while drawing $20K per month from the nest egg.

$10 million is my number.

Could I retire on less? Yes, but I would need to work 0.5 FTE until at least age 65 assuming a life expectancy of 87. I would like to leave my children some money and my wife needs money as her life expectancy is 90.

 

[Monty Python]

Great post and a great plan. You can always work FULL TIME until age 60 then cut back until age 65 allowing your nest egg to grow above $10 million.

JPP, you and me all agree on the $10 Million plus number.

JPP and I still keep in touch ... sadly I believe he no longer follows SDN. Our loss.

 

[IanMcGalt]

If you make 300k while working then subtract mortgage (paid off), retirement savings, child expenses, lower taxes for lower retirement income, you probably only need 130k to have an unchanged lifestyle.
That would require around $3.2 million to fund forever depending largely on the performance of the market in the first several years after you retire.
If you have a defined benefit plan in addition to retirement investments, you might need $2 million or less, depending on the pension payments, to maintain your lifestyle. That's with a fairly conservative 4% withdrawal rate.

Don't get me wrong, I think it'd be great to have more money saved by retirement either to be able to spend more or just be more financially secure, but it's not like you'd be living in poverty on 130k/year with mortgage paid off and kids out of college.

$10 million is probably not attainable for most grads these days because they won't be paid as well as you were and the stock market will probably not return as much as it did in the past.

 

[pgg]

drawing $20K per month from the nest egg.

Suddenly I find myself really interested in what you plan on needing $20K/month in disposable income for in your 70s and 80s. What's on your bucket list?


I will throw out there, that the RISK people take with their investments is in larger part dependent upon their perceived NEED to take that risk. It could be that you're overestimating your need, and consequently taking more risk than you have to (e.g., things like Pacira stock picking).

 

[Silent Cool]

JPP and I still keep in touch ... sadly I believe he no longer follows SDN. Our loss.

trinity,

Why doesn't JPP follow SDN anymore? Why did he stop posting?

 

[Monty Python]

trinity,

Why doesn't JPP follow SDN anymore? Why did he stop posting?

He's never explicitly told me, but I think it was a combination of getting burned-out on it, plus his social and family life appear to have become much more active.

 

[BLADEMDA]

If you make 300k while working then subtract mortgage (paid off), retirement savings, child expenses, lower taxes for lower retirement income, you probably only need 130k to have an unchanged lifestyle.
That would require around $3.2 million to fund forever depending largely on the performance of the market in the first several years after you retire.
If you have a defined benefit plan in addition to retirement investments, you might need $2 million or less, depending on the pension payments, to maintain your lifestyle. That's with a fairly conservative 4% withdrawal rate.

Don't get me wrong, I think it'd be great to have more money saved by retirement either to be able to spend more or just be more financially secure, but it's not like you'd be living in poverty on 130k/year with mortgage paid off and kids out of college.

$10 million is probably not attainable for most grads these days because they won't be paid as well as you were and the stock market will probably not return as much as it did in the past.

So $10 million isn't in the cards for a new graduate but $5 million is. Why not retire in comfort and luxury as you will finally have the time to enjoy that boat or second home; some of us want to travel extensively 3-4 timers per year as well.

The more you save early on the more time it has to grow and quadruple in value.

 

[sevoflurane]

I guess it just depends on your expectations. I want to do things NOW, while my body still allows me to do it--->I'm not going to AK to rip some killer lines when I'm 65 y/o. There is a balance. Some people can save and retire on 3 large. Some people put a lot of sweat and tears getting into the 10 large arena. It's all about what you want... so long as you are realistic.
If I hit 7-8 large by the time I'm 50, I'm going half time 'till 55. Beyond that it depends on my interests.
I'll prolly be doing some form of anesthesia until 60... cuz I enjoy it.
You really going to spend 10 large once you hit 60? I don't think so. So it is not necessary.

 

[BLADEMDA]

I guess it just depends on your expectations. I want to do things NOW, while my body still allows me to do it--->I'm not going to AK to rip some killer lines when I'm 65 y/o. There is a balance. Some people can save and retire on 3 large. Some people put a lot of sweat and tears getting into the 10 large arena. It's all about what you want... so long as you are realistic.
If I hit 7-8 large by the time I'm 50, I'm going half time 'till 55. Beyond that it depends on my interests.
I'll prolly be doing some form of anesthesia until 60... cuz I enjoy it.
You really going to spend 10 large once you hit 60? I don't think so. So it is not necessary.

One of my goals is to leave an inheritance for my kids. I realize this may no longer be the norm but it is part of my financial planning.

 

[sevoflurane]

One of my goals is to leave an inheritance for my kids. I realize this may no longer be the norm but it is part of my financial planning.

Right on Blade.
That is great and an important consideration when you have kids.

You are right. More and more people expect their children to pave their way in life. Not only that but more and more couples are going through life w/o kids. Myself included. Maybe I'll regret it later, but for now, my wife and I are enjoying every little bit of our lives and are well on or way to retirement. It's so easy to get caught up in the work hard mentality. If you are going to work hard... at least play hard and enjoy the "now" as you never know if there is a later. Look at UTSW for example.

IMHO, It's all about balance and personal choices.

 

[IanMcGalt]

So $10 million isn't in the cards for a new graduate but $5 million is. Why not retire in comfort and luxury as you will finally have the time to enjoy that boat or second home; some of us want to travel extensively 3-4 timers per year as well.

The more you save early on the more time it has to grow and quadruple in value.

I'm not saying you shouldn't try but going from 3 million to 10 million is likely to take 15 years of savings (if you're lucky) unless you are saving way way more than maxing out your retirement accounts AND you get much better than average long-term inflation-adjusted returns from your investments. By the time a new grad hits 3 million, he probably won't have 15 or more years of work left in him.
Of course you can save more and more money once the kids are grown, mortgage is paid, and you have more to spare, but by then you'll be getting close to retirement so your savings won't have much time to grow.

I'd rather retire or go part-time at 57 with 3-4 million than work until I'm 67 and retire with 6 million. I'd love to leave more money for my kids, but I'd rather retire 10 years earlier and enjoy it before I have one foot in the grave.

 

[IanMcGalt]

Right on Blade.
That is great and an important consideration when you have kids.

You are right. More and more people expect their children to pave their way in life. Not only that but more and more couples are going through life w/o kids. Myself included. Maybe I'll regret it later, but for now, my wife and I are enjoying every little bit of our lives and are well on or way to retirement. It's so easy to get caught up in the work hard mentality. If you are going to work hard... at least play hard and enjoy the "now" as you never know if there is a later. Look at UTSW for example.

IMHO, It's all about balance and personal choices.

Skipping kids is definitely a reasonable choice. They are a huge sacrifice financially and otherwise that isn't for everyone.

 

[BuzzPhreed]

I'm not worried. Obama's legacy is going to take care of me no matter what poor life choices I make. The government's role is to provide security for the people. So I'm just going to live what ever life I want making whatever life choices I want. Fuck everyone else. Living in a free country means I should get stuff for "free". And I'm going to take what's owed me.

 

[pgg]

I had kids young, so by the time I go part-time or retire they'll be in their 30s. I've got their education covered, but by the time they see any inheritance from me, they'll be on the edge of retirement themselves. Hell, if I live past 100 like I plan, their kids could be mid-late career themselves.

Maybe they'll get something from me and maybe they won't. Maybe I'll need their inheritance to transplant my brain and consciousness into a robot. That probably won't be cheap.


Anyway, it'd be nice to leave something to the next couple of generations, but I'm not going to put in another decade+ of work in my 60s (when I could be retired myself) to leave them a massive pile of money. I'm also not going to tick up the RISK on my retirement portfolio in the hopes of squeezing another % or two out of the returns, so I can leave them $1M instead of $500K.


All you genetic dead-ends, live it up!

 

[deleted59964]

disappointed - i thought this thread was going to about something else entirely

 

[Mman]

I don't have a number and I don't think anybody should. To me it's a combination of age and money. If I have enough money saved up, I'll retire (or only work 1 day a week) at age 55. If I don't have quite that much, might hang on til I'm 60. If I'm struggling (relatively speaking) I'll go to 65. The younger you are when you retire, the more money you need.

I currently save for retirement at the rate of about $220K (pre tax) per year. If I were to retire at age 55, $300K per year (inflation adjusted) would probably be way more than enough to see me through my lifespan. But if I were to retire at 60, $250K per year would be more than enough and at 65, $200K per year would be more than enough. But then again, those rates are more what I'd be spending in the first years of retirement. By the time I'm 75 I probably won't be spending nearly as much money. So for me, an inflation adjusted number of somewhere between $5-10 M is probably way more than enough to retire comfortably and probably even $4M would be enough. I mean $5M earning 5% means you get $250K in interest per year so it'd be hard to even get into the principle that much.

My ultimate goal would probably be to have about $3-4M saved up by age 50 and then go part time until age 60.

 

[BLADEMDA]

I don't have a number and I don't think anybody should. To me it's a combination of age and money. If I have enough money saved up, I'll retire (or only work 1 day a week) at age 55. If I don't have quite that much, might hang on til I'm 60. If I'm struggling (relatively speaking) I'll go to 65. The younger you are when you retire, the more money you need.

I currently save for retirement at the rate of about $220K (pre tax) per year. If I were to retire at age 55, $300K per year (inflation adjusted) would probably be way more than enough to see me through my lifespan. But if I were to retire at 60, $250K per year would be more than enough and at 65, $200K per year would be more than enough. But then again, those rates are more what I'd be spending in the first years of retirement. By the time I'm 75 I probably won't be spending nearly as much money. So for me, an inflation adjusted number of somewhere between $5-10 M is probably way more than enough to retire comfortably and probably even $4M would be enough. I mean $5M earning 5% means you get $250K in interest per year so it'd be hard to even get into the principle that much.

My ultimate goal would probably be to have about $3-4M saved up by age 50 and then go part time until age 60.

I guess we are from a different generation. I passed your Financial goal before age 50 and I'm not retiring anytime soon. The concept of not working full time doesn't fit with my ideals or my goals at age 50. That's too young to go part time unless you truly hate the field. The generation before for me worked until age 65 or longer and amassed in excess of $12-$15 million each before retiring. Most of them didn't cut back until age 60-62 and some are working at age 67 with a fortune in the bank.

 

[BLADEMDA]

I don't have a number and I don't think anybody should. To me it's a combination of age and money. If I have enough money saved up, I'll retire (or only work 1 day a week) at age 55. If I don't have quite that much, might hang on til I'm 60. If I'm struggling (relatively speaking) I'll go to 65. The younger you are when you retire, the more money you need.

I currently save for retirement at the rate of about $220K (pre tax) per year. If I were to retire at age 55, $300K per year (inflation adjusted) would probably be way more than enough to see me through my lifespan. But if I were to retire at 60, $250K per year would be more than enough and at 65, $200K per year would be more than enough. But then again, those rates are more what I'd be spending in the first years of retirement. By the time I'm 75 I probably won't be spending nearly as much money. So for me, an inflation adjusted number of somewhere between $5-10 M is probably way more than enough to retire comfortably and probably even $4M would be enough. I mean $5M earning 5% means you get $250K in interest per year so it'd be hard to even get into the principle that much.

My ultimate goal would probably be to have about $3-4M saved up by age 50 and then go part time until age 60.

20 years at partner x $300K (which you can easily save since $220 is pretax) means $6 million plus another $1-2 from growth. Put your 20 years in then go part time. Honestly, 20 years at partnership income is not a big deal as I'm already well past that mark and have zero interest in retirement. I do think in 5-7 years I would like 0.75 FTE though.

Stay the course. Enjoy life but Anesthesiology is your career.

 

[BuzzPhreed]

I'm not worried. Obama's legacy is going to take care of me no matter what poor life choices I make. The government's role is to provide security for the people. So I'm just going to live what ever life I want making whatever life choices I want. Fuck everyone else. Living in a free country means I should get stuff for "free". And I'm going to take what's owed me.

^ This was satirical of course.

I'm seriously probably going to expatriate when I retire. Don't know when that will be exactly. But there are some beautiful places in the world where you can live a long time on the cheap.

 

[Mman]

20 years at partner x $300K (which you can easily save since $220 is pretax) means $6 million plus another $1-2 from growth. Put your 20 years in then go part time. Honestly, 20 years at partnership income is not a big deal as I'm already well past that mark and have zero interest in retirement. I do think in 5-7 years I would like 0.75 FTE though.

Stay the course. Enjoy life but Anesthesiology is your career.

I'm saying my current rate of savings (as a partner) averages out to about $220K pre tax per year. That's not all pre tax, only about $115K is pretax, the rest if post tax. I'm not sure I can get to a rate of $300K per year pretax savings. If I earn $700K in a year and save about $220K worth before taxes, that means my take home is $480K less taxes and while I could save more for retirement I also save for things that aren't retirement like housing and children and such.

But either way, Anesthesiology is my career but not my life. And as much as I enjoy work, it's work. I enjoy not working even more and find plenty of things even more fulfilling than work to occupy my time. I'm the person who if I won $50M in the lottery tomorrow you'd never see me in a hospital again.

 

[sevoflurane]

...only about $115K is pretax...

How do you get to 115K pretax?

 

[OUAnesthesia]

I know there are several threads dedicated to this but just in brief what are you all contributing to pre tax? So my job will contribute X amt of dollars into my pension but if Im curious what are my options for maximizing pre tax contributions? Are you all really able to contribute over 200K pre tax? How do you do this?

 

[Gas you down]

mid thirties, 3 years out.
not real sure about my number, since I'm not married and no kids yet. it could really move upwards if things change. I rent. I save 3k/month. $2500/month to loans. 5k/month investing. max out 401k every year. will likely start putting much more towards loans soon.
I tend to go on a lot of pretty baller vacations though. smoke/drink/carnivore so I doubt I'll make it anywhere close to 80.
5 mil sounds about right if I'm single, at age 55-60.
closer to 9-10 mil if I get a family, likely working until 65.

 

[okayplayer]

I know there are several threads dedicated to this but just in brief what are you all contributing to pre tax? So my job will contribute X amt of dollars into my pension but if Im curious what are my options for maximizing pre tax contributions? Are you all really able to contribute over 200K pre tax? How do you do this?

For me it's the IRS allowable ~$52k into my 401k/corporate profit sharing account.

 

[OUAnesthesia]

So what are these discussions about >200K pre tax. Mine is 52K as well...

 

[Arch Guillotti]

So what are these discussions about >200K pre tax. Mine is 52K as well...

Guessing defined benefit plan plus 401K.

 

[Mman]

Guessing defined benefit plan plus 401K.

ding ding ding

 

[radman123]

Wow anesthesiologists must be making a ton to have goals of 5-10 mil portfolios. Just a rad here. A paid off house, SS and 2 mil portfolio should get me there by age 50. Should have 100k income until death + any part time work. That is 8.33k a month in todays dollars. No more retirement savings, Kids expenses including saving for college, disability and life insurance out, lower housing costs, etc. Most should be able to live very comfortably on 8k a month plus any part time gig.

 

[okayplayer]

This is a great website that I recommend for all current residents and new grads like myself. A couple of interesting reads on topics we were discussing:

Percentage of Current Income Needed in Retirement: http://whitecoatinvestor.com/percentage-of-current-income-needed-in-retirement/
Social Security: http://whitecoatinvestor.com/the-life-and-disability-insurance-you-didnt-realize-you-had/

Gave me a much better perspective when I see the Social Security coming out of each check. Everyone I've talked to who is knowledgeable about this (including Jim, the writer of White Coat Investor) seems to think Social Security is, unlike medicare, very stable and self-sustaining.

 

[OUAnesthesia]

Guessing defined benefit plan plus 401K.

Ok so with the defined benefit you can maximally put away 52K and on a 401K i thought the limit was 17.5K...so do people have multiple 401K plans to reach this over 200K pre tax number? Sorry but this pre tax number people are talking amount doesn't make sense to me yet.

 

[IanMcGalt]

Defined contribution plans have a 52k limit. Defined benefit plans have a 210k limit.

 

[OUAnesthesia]

Defined contribution plans have a 52k limit. Defined benefit plans have a 210k limit.

Gotcha...forgive my ignorance...a lot of this is very new to me

 

[Wiscoblue]

I'm at $6m net right now at age 52. We do defined contribution of 55k in my group. My wife saves an additional 32k pretax. We probably save another 250k post tax. Yes you too can do it if you live simple, drive cars for 8 plus years, do not carry debt and are married to the same person for 25 plus years. Teach your kids the value of money and good work ethic.

Here is my plan. Retire at 58. $5m invested in SPY has a yield of 2% which is 100k a year. The portfolio grows at 5% which is $250k a year. I draw $100k of that for an annual income of 200k half of which is taxed at 15%.

I will have another $2m in pretax which I will not touch until I am forced to take distributions. I could go indefinitely as the portfolio grows while we get plenty of income to enjoy retirement while still in good health. I will leave plenty of money for my two daughters one in law school and the other is in med school, both with no loans and full scholarships.


Planning to retire either in Madison WI or Ann Arbor MI, enjoying college sports, music, theater and physical activities and immediate access to excellent health care facilities.

Go Badgers and Go Blue!!