Will I ever make up for the lost income if I go to med school?

[Tryinglateinlif]

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I am 40 years old and have had a very successful career in pharmacetical manufacturing after several years as a Paramedic. I am planning to leave a $90K/year job to go to 2 more years of undergrad and then medical school. I can't imagine doing anything else for the rest of my life. But, I don't know what MD's make (probably ER) and I wonder if I will ever recover from no income for 6 years. I will have one benefit most 20 year olds don't. I will be able to pay for most of my education with my 401k so I won't have a huge debt when I graduate. Anyone have any helpful information?

 

[coralfangs]

think about it this way...
90k job = apprx $50k after tax, right?

plus tuition and living expense, that's $50k more a year on average?
so you are losing $50k for 2 years of college and 4 years of med school
$300k
you can easily make that back beginning at approx age 50
why not? if you like it, just do it

 

[AcclratngCharge]

I am 40 years old and have had a very successful career in pharmacetical manufacturing after several years as a Paramedic. I am planning to leave a $90K/year job to go to 2 more years of undergrad and then medical school. I can't imagine doing anything else for the rest of my life. But, I don't know what MD's make (probably ER) and I wonder if I will ever recover from no income for 6 years. I will have one benefit most 20 year olds don't. I will be able to pay for most of my education with my 401k so I won't have a huge debt when I graduate. Anyone have any helpful information?

I did same calc for myself:

2 years of Undergrad: (-220,000)
Tuition ~ -10,000 x 4 = -40,000 $
Lost Income ~ -90,000 x 2 = -180,000
You = 43

4 Years of medical school: (-520,000)
Tuition ~ -40,000 x 4 = -160,000
Lost Income ~ -90,000 x 4 = -360,000
You = 47

3 years of ER residency: (-120,000)
Stipend ~ 50,000 x 3 = +150,000
Lost Income ~ -90,000 x 3 = -270,000
You = 50

So now you are 50 yo and licensed ER Physician. Avg ER Physician salary (http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_hc07000222.html) is ~ 230,000, I have no idea how accurate that is. So your net income verses 90,000 = 140,000.

If you are down 860,000 $, that would be earned in 6-7 years as a physician(using the net income 140k), putting you at ~ 58 until you have a net increase in money. You can change any numbers to improve accuracy for your exact schools and situation.

I hope it works out. Imagine how exciting and amazing it would be to learn medicine. I know medicine school and residencies will be the most challenging part of life, but the experience will be well worth it.

 

[CookDeRosa]

I am 40 years old and have had a very successful career in pharmacetical manufacturing after several years as a Paramedic. I am planning to leave a $90K/year job to go to 2 more years of undergrad and then medical school. I can't imagine doing anything else for the rest of my life. But, I don't know what MD's make (probably ER) and I wonder if I will ever recover from no income for 6 years. I will have one benefit most 20 year olds don't. I will be able to pay for most of my education with my 401k so I won't have a huge debt when I graduate. Anyone have any helpful information?

In addition to finding the break even point, you should find a 401k online calculator. I think bankrate.com has one. You'll end up breaking even in a few short years UNLESS you empty your 401k. The lost compounding interest is irreplaceable at your age. (my age 🙂 Work it out both ways- calculate the cost of borrowing at 6% student loan against the withdrawal penalty and lost interest of your 401k. Without even doing the math, I'd estimate you set yourself back 30 years doing it your way.

Again, without running numbers I'm estimating and assuming- but it's going to be more financially savvy to borrow your student loan and repay with your Dr. income than draining your account.

 

[Lacheln]

think about it this way...
90k job = apprx $50k after tax, right?

plus tuition and living expense, that's $50k more a year on average?
so you are losing $50k for 2 years of college and 4 years of med school
$300k
you can easily make that back beginning at approx age 50
why not? if you like it, just do it

You sort of glossed over the 300K+ pink elephant called student debt there coral. Not to mention the 3-4 years spent as a resident.

OP - I'm just on my way to bed so I'm not going to throw a bunch of calculations at you. If you wanted to ballpark with some rough numbers though:

-How much you'll make in residency (for ER 3-4 years)? ~$50k/year.
-For ER attendings? The range in academic medicine is anywhere from $195K-270, depending on years of practice and location etc. In community medicine it's higher, $172K-$332. (Source: Association of American Medical Colleges. Report on Medical School Faculty Salaries 2007-2008. Washington, DC: Association of American Medical Colleges; 2009.)
-Med student debt varies widely, depending on location, school type and what you have going in obviously. $350K is not the norm, but it's not particularly unusual either.
-Also consider the fact that you are losing years of retirement savings.

Plug those into some calculators and see where you stand based on how long you think you might practice.

 

[CookDeRosa]

I did same calc for myself:

2 years of Undergrad: (-220,000)
Tuition ~ -10,000 x 4 = -40,000 $
Lost Income ~ -90,000 x 2 = -180,000
You = 43

4 Years of medical school: (-520,000)
Tuition ~ -40,000 x 4 = -160,000
Lost Income ~ -90,000 x 4 = -360,000
You = 47

3 years of ER residency: (-120,000)
Stipend ~ 50,000 x 3 = +150,000
Lost Income ~ -90,000 x 3 = -270,000
You = 50

So now you are 50 yo and licensed ER Physician. Avg ER Physician salary (http://swz.salary.com/salarywizard/layouthtmls/swzl_compresult_national_hc07000222.html) is ~ 230,000, I have no idea how accurate that is. So your net income verses 90,000 = 140,000.

If you are down 860,000 $, that would be earned in 6-7 years as a physician(using the net income 140k), putting you at ~ 58 until you have a net increase in money. You can change any numbers to improve accuracy for your exact schools and situation.

I hope it works out. Imagine how exciting and amazing it would be to learn medicine. I know medicine school and residencies will be the most challenging part of life, but the experience will be well worth it.

These are fun to do, I'm a nerd that way lol. It might not sound exciting to think about a break even point being 17 years away, however look at it another way. When you break even, you'll be roughly 58 years old. Figure you are physically able to work until you're 68 - that's 10 years. In scenario 1 you were earning 90k, so in those final 10 years you would have brought in 900k, but if you are a doctor, in that same time you'll bring in 2,300,000! A net gain of about 1 1/2 MILLION dollars. So, um. Yes to your question.

 

[Pons Asinorum]

I think this thread, and Law2Doc's additions to it, are well played:
http://forums.studentdoctor.net/showthread.php?t=742670&highlight=law2doc
I would agree with him. No, it doesn't make sense for you to do this from a PURELY financial standpoint. Don't even worry about trying to find a "calculator." There are far too many holes in them to account for all of the cost and income scenarios. Most likely, at 40 and working in a well-paying job in a growth industry where you have valuable experience, you will NOT break even. If you really want more answers read through that thread, and then make use of the search function. Best of luck.

 

[katiemaude]

Going into medicine to make money is probably the worst reason to do it. Sure, some people get rich. But they most likely got residencies in the highest paying fields and have good business sense (which I've found that many doctors lack, or they'd be using their brains in business).

But you're not asking that. You just want to know if you're going to break even and I think that's a fair analysis. It's also a complex one. You might want to ask your accountant or financial analyst to run the numbers for you. If breaking even is really important to you, medicine might not work in your favor at 40. Somehow from what you wrote, I gather that you will still want to do medical school, regardless. It's all in, baby.

 

[loik22]

I am 40 years old and have had a very successful career in pharmacetical manufacturing after several years as a Paramedic. I am planning to leave a $90K/year job to go to 2 more years of undergrad and then medical school. I can't imagine doing anything else for the rest of my life. But, I don't know what MD's make (probably ER) and I wonder if I will ever recover from no income for 6 years. I will have one benefit most 20 year olds don't. I will be able to pay for most of my education with my 401k so I won't have a huge debt when I graduate. Anyone have any helpful information?

I will second Pons Asinorum, read the thread (s)he mentions and the points of true disposable income. Be aware that the calculations by AcclratngCharge are not net present values.

Unless your retirement account is overflowing with money, financing your education with your 401k is a risk I would not take. First, a decent investor can get an return on investments that is greater than typical student loans' interests. Second, you may want to review carefully the rules on how to withdraw money from the account without a significant penalty. And finally, when you become a doctor, you will have to save at a very high rate to replenish that nest to have the opportunity to retire at a normal age this is where the NPV calculations and disposable income argument matter the most. I also do not know any ER docs over the age of 65 so postponing retirement may not be a very realistic option.

 

[Prncssbuttercup]

Not that it's worth anything, but this makes me happy that I make crap for money and will make it all back relatively quickly by comparison 😀

OP, if you're doing it for money, which it didn't sound like you were, it's probably not the best choice... If you're following your heart, does it really matter? You'll be able to live comfortably, and if you're happy at the end that's all that really counts...

 

[Simplify]

You can get a pretty good idea but you at least have to take tax rates and years of lost income + student loans and interest (in real dollar terms) into account. I have a spreadsheet you all are welcome to use in which I did exactly that. Make sure you calculate your own tax rates using "average" federal tax rate + state tax rate. There are many calculators online which will give you an average tax rate for a given level of income.

Edit - To the OP, you should not empty your 401k to pay for medical school. I'm sure you could have an accountant or CPA run the numbers for you but as someone else already said you're losing a lot of compounding interest in your account. It is almost never beneficial to drain a retirement account for any purpose. While medical school loans carry a decent interest rate remember you can also write that interest off on your tax return.

Edit2 - Added a link in the post rather than rapidshare.

 

[Tryinglateinlif]

I would like to thank everyone for their perspectives. I think that no matter the answer, I am going to go to med school but I just wanted to know if I was going to be able to retire as middle class by 70 or not. I think what I got from all this was that it doesn't matter as long as it is what I want to do. I can't imagine doing anything else for the rest of my life. And, the cost of public education in NC isn't to bad. As long as my wife works as an RN we'll survive.

 

[PharmaTope]

THE BIG PROBLEM with this thread is people are not discussing the fact of declining reimbursement.

in the future, physicians will not earn as much as they earn now, this is an absolute fact. you must take this into consideration.

also who is to say you will enjoy EM? you might like pediatrics and earn the same money you are earning now. remember that.

honestly though, if you truly do like it and enjoy it, no money is worth more than a life of satisfaction. you cannot take this money to your grave. just remember that. you also cannot lie to yourself everyday of your life. keep it all in perspective!

 

[mspeedwagon]

👍. I couldn't have said it better myself. I'd forget any money consideration other than the fact that you are going to be living comfortably doing something you love.
I'm much younger than you and have a higher income. I'll be foregoing a lot of potential earnings to pursue what I'm passionate about, pediatrics.
There is pretty much no hope that I'd ever earn back lost income in my lifetime (definitely not in pediatrics at least), but the most important thing is to do what you love (and I'm definitely NOT doing that now).

THE BIG PROBLEM with this thread is people are not discussing the fact of declining reimbursement.

in the future, physicians will not earn as much as they earn now, this is an absolute fact. you must take this into consideration.

also who is to say you will enjoy EM? you might like pediatrics and earn the same money you are earning now. remember that.

honestly though, if you truly do like it and enjoy it, no money is worth more than a life of satisfaction. you cannot take this money to your grave. just remember that. you also cannot lie to yourself everyday of your life. keep it all in perspective!

 

[MightyMoose]

I am 40 years old and have had a very successful career in pharmacetical manufacturing after several years as a Paramedic. I am planning to leave a $90K/year job to go to 2 more years of undergrad and then medical school. I can't imagine doing anything else for the rest of my life. But, I don't know what MD's make (probably ER) and I wonder if I will ever recover from no income for 6 years. I will have one benefit most 20 year olds don't. I will be able to pay for most of my education with my 401k so I won't have a huge debt when I graduate. Anyone have any helpful information?

Ok, I'm not going to tell you not to do it, but you should think very very very very long and hard on this question, because you are going to lose a lot of time and money and probably the last of your younger years to medicine... Both of which are worth a small fortune.

I gave up working a job that paid ~125k/year to go back to school when I was 26, thinking that I would be in it for about 8 years for undergrad/medical school and ~ another four years for residency. Things, unfortunately, don't always play out that way. It's taken me an extra few years to finish undergrad (unforeseen complications that you just can't know about ahead of time) and I'm currently on my second application cycle. My point is that your 2+4+4ish might not really add up once you get there. There might be things that come up that you didn't anticipate. The unanticipated have an uncanny way of setting you back a year or more.

I know you were asking for more about the dollars and cents, but I had to throw in my 2cents on the process as well...

Here are two great articles/blogs that sum up physician salaries and compare the costs of medical school, hours, etc. vs. pretty average jobs (which you have an above average job now).

http://benbrownmd.wordpress.com/

and

http://www.er-doctor.com/doctor_income.html


So, assuming you have job security now, you should think very long and hard about this decision.

 

[Don Draper]

For me also, this job never made sense purely financially (due to risks and time without income). I too left a nice career/income.

If I were making a money bet then I would have folded my hand pre-flop. Find out what you think will make you happiest, then the money will often work out.

 

[SoftwareKevin]

When I started considering med school I ran the numbers and it was unlikely I was ever going to recover financially unless I went into a high paying specialty. When you factor in 2 years of time off for pre-reqs, 4 years of school, and ~4 years residency earning 50k, I'll probably have lost out on ~1.8 million in income. On top of the lost income, I'll be taking out student loans, which will be gaining interest, and losing out on interest that 1.8 million could have been making in bonds/stocks

My friends think I'm crazy for giving all that up, but I learned (early luckily) that it's not worth doing something you don't love doing day in and day out, even if it pays well. I figure that when I'm practicing some day that I'll be making about the same I make now, which should be more than enough to take care of my student loans in a timely manner and still enjoy a good life 🙂

 

[CookDeRosa]

When I started considering med school I ran the numbers and it was unlikely I was ever going to recover financially unless I went into a high paying specialty. When you factor in 2 years of time off for pre-reqs, 4 years of school, and ~4 years residency earning 50k, I'll probably have lost out on ~1.8 million in income. On top of the lost income, I'll be taking out student loans, which will be gaining interest, and losing out on interest that 1.8 million could have been making in bonds/stocks

My friends think I'm crazy for giving all that up, but I learned (early luckily) that it's not worth doing something you don't love doing day in and day out, even if it pays well. I figure that when I'm practicing some day that I'll be making about the same I make now, which should be more than enough to take care of my student loans in a timely manner and still enjoy a good life 🙂

Yes, I like that. I agree.

One thing about being <cough> older, is that you already know that money is NEVER enough. When you are young, you believe high pay will = high job satisfaction, and that's just not true. While it's nice if a satisfying job pays well, I'd take a satisfying/intriguing/challenging volunteer opportunity over a crap job with crummy co-workers and big $ ANY DAY.

 

[Don Draper]

Yes, I like that. I agree.

One thing about being <cough> older, is that you already know that money is NEVER enough. When you are young, you believe high pay will = high job satisfaction, and that's just not true. While it's nice if a satisfying job pays well, I'd take a satisfying/intriguing/challenging volunteer opportunity over a crap job with crummy co-workers and big $ ANY DAY.

Volunteer?

 

[NaHoku]

I would like to thank everyone for their perspectives. I think that no matter the answer, I am going to go to med school but I just wanted to know if I was going to be able to retire as middle class by 70 or not. I think what I got from all this was that it doesn't matter as long as it is what I want to do. I can't imagine doing anything else for the rest of my life. And, the cost of public education in NC isn't to bad. As long as my wife works as an RN we'll survive.

Hi,
I just wanted to say that U are a true inspiration!
I am 38 and preparing for med school (switching from linguistics). It hasn't been an easy road, and definitely not the shortest one, but I also cannot imagine doing anything else in my life professionally. Sometimes, I worry about the financial aspect of it too, and about my age (whether I am not too old), but then I have to admit to myself that there is no other way for me. So don't give up. Money is not the most important at the end - it is the desire for professional fulfillment that drives me, and it seems to me that's a major motivating factor fro U too.
Best of luck to you!
And keep us posted please.

 

[Seldonzin]

having done my share of physician contracts, there are additional opportunities (in employed setting) such as sign-on bonus, loan forgiveness, productivity bonus, stipend for additional responsibility (dept chair) etc. plus, many int/med docs also assist with surgery and get some $$ for it. so in all, i think even with substantial income loss during training, there are ways to minimize your training losses and maximize income opportunities once you become a doc...

 

[bassvp]

on the other hand, maybe you'll find yourself in a $400k specialty. I don't care who you are, you'd catch up on lost $90k/year income quickly!

I know there's a lot of criticism about going into it for the money, but you'd be a darned fool to not (as accurately as possible given that we don't know the future) weigh the pro's and con's...especially as a non-trad.

 

[Jasil]

When I started considering med school I ran the numbers and it was unlikely I was ever going to recover financially unless I went into a high paying specialty. When you factor in 2 years of time off for pre-reqs, 4 years of school, and ~4 years residency earning 50k, I'll probably have lost out on ~1.8 million in income. On top of the lost income, I'll be taking out student loans, which will be gaining interest, and losing out on interest that 1.8 million could have been making in bonds/stocks

My friends think I'm crazy for giving all that up, but I learned (early luckily) that it's not worth doing something you don't love doing day in and day out, even if it pays well. I figure that when I'm practicing some day that I'll be making about the same I make now, which should be more than enough to take care of my student loans in a timely manner and still enjoy a good life 🙂

Great motto, but in my example I am not my job. I don't hate it I don't love it and if they stop paying my I guarantee I will stop going to work🙂 For me work is truly a means to a end!

My enjoyment comes from my family and hobbies. Some people are defined by their jobs. as for me I look forward to retirement and want it to come very quickly!! If the wife doesn't go to med school it's 50-52 if she does it's 61-62 she doesn't care I on the other hand???

My wife thinks somewhat like you and even though it makes ZERO financial sense really no sense no matter how you look at it. It is a dream and she will cross that bridge when she gets there to go or not to go!!

Currently we are hoarding cash and working a debt payoff plan to be debt free except the house, so she can make that decision with a clearer conscience. Good luck I wish you well!

 

[Jasil]

on the other hand, maybe you'll find yourself in a $400k specialty. I don't care who you are, you'd catch up on lost $90k/year income quickly!

I know there's a lot of criticism about going into it for the money, but you'd be a darned fool to not (as accurately as possible given that we don't know the future) weigh the pro's and con's...especially as a non-trad.

Only if that's what you want?? My wife want Family Practive good ole Primary Care and NOTHING ELSE!! So, really how much can she make 140-160k?

She wants to see as many, help as many, and comfort as many as possible and could care less about many. She has been to Africa, Mexico, and Honduras as a RN and would love to do the same as a MD......heart the size of Alaska I'll give her that.

 

[bassvp]

.

 

[MCAT guy]

Only if that's what you want?? My wife want Family Practive good ole Primary Care and NOTHING ELSE!! So, really how much can she make 140-160k?

She wants to see as many, help as many, and comfort as many as possible and could care less about many. She has been to Africa, Mexico, and Honduras as a RN and would love to do the same as a MD......heart the size of Alaska I'll give her that.

I could care less about many also dude, for sure. My heart is the size of the milky way galaxy.

 

[yohji]

no amount of money can really compensate for sacrificing the prime years of your life.

 

[Simplify]

no amount of money can really compensate for sacrificing the prime years of your life.

The prime years of your life are at a time of your choosing.