First post--review my situation. Hope to retire age 45

[kayli69]

Hello everyone.  Longtime lurker but first post.

I have been fortunate enough to be 10yrs into a high income, private practice procedure oriented specialty.  My wife and I have lived way below our means and saved a large nest egg.  I feel very fortunate we have done this as the stress of practice is becoming overwelming and I want to be out or at least part time by age 45, which is 5 years.  Please review and comment about anything you would do differently and if you think it is possible

3 childdren, age 1.5yr, 3yr, 4yr

Private practice avg yearly pay: $800,00-1,000,000 now that I am partner (been partner for 5 yrs).  Typically save 75% of take home

Taxable acct: $ 3,200,000.  Invested in 80% stocks/20% bond, all Fidelity index funds.  On average contribute $350,000-$400,000/yr

$401K/profit sharing: $550,000, contibute max which I believe is $52000/yr.  50% stock market index, 50% total bond index

Cash balance plan: $100,000.  Contribute $80000/yr--plan is only one yr old.  Our practice advisor has us invested in several funds with goal of 4%/yr.

529 plan New York State: Have one for daughter age 4 with 60K, one for son age 3 with 40K.  Contribute 10K per year to each account

wife Roth $140000.  My Roth $50,000.  Contibute $5500 backdoor to each every year

Live in a house appraised at $475,000 and have been doubling monthly payments so will be payed off in 3 yrs.  Have $160K to go

Student loans: $105,000 at 3.5%.  I know, I prob should just pay this off

Hobby farm/cottage: 3% owner held mortgage, have $175,000 balance.  Aprraised value $365000.  I have been in no hurry to pay this off

 

Once primary house mortgage is gone, our monthly expenses will prob average $7000 but would like to budget $10000 per month just to be safe

Comments?  Please feel free to critisize also

 

 

 

 

 

[VagabondMD]

Looks like you are in great financial shape.

I see little reason why you could not retire at 45 in 5 years but...

My only hesitation would be that you are just getting started with the expenses related to raising the children. People (me included) underestimate what is or could be the financial requirements of one's children. Many of these are discretionary (i.e. oboe lessons with a Master on the other coast, pitching camp every third weekend in Florida, etc.), but what if one of your children needs extensive educational support, special care or treatment?

Is there any way that you could continue to work on a part time basis, at least until the kids are launched (or close)?

 

[hightower]

Wowzers is what I have to say about your situation!!
You sure did pick the right specialty  May I ask which specialty you're in?  I'm guessing Ortho?  Am I right?!

[The White Coat Investor]

Welcome to the forum.

Obviously you're doing phenomenally, both with income and net worth. (If that's not obvious to you, step back and pretend your post was written by someone else and what you'd advise that person to do.)

What the heck is going on with the student loans? Why not pay those off this month? Guaranteed 3.5% return. Seems silly to be trying to arbitrage $100K with a $4M net worth.

You do realize you're already financially independent, right? You're just cleaning up a few odds and ends here (kind of where we're at.) You know, knock out the student loans, pay off the mortgages, toss a little extra into the 529s and retirement accounts "just to be sure" etc.

Make sure you're living the life you want to live right now. Draw out what your ideal life would look like, and then do whatever you can to make your life right now look like that.

[Zaphod]

You could retire yesterday. You're fine. I dont even think paying off mortgages is a priority (caveat i rarely do), that money could work even better long term in the market. Youre also over self insured if you needed to change your mind as well.

One thing you could do is ask about your cash balance plan and catch/up superfund it to really reduce your tax burden and turbo charge early retirement. This seems really underfunded compared to your other accounts and is tax advantaged. Can roll it over or annuitize it once retired and let other stuff grow. That could be a big deal.

[janettebournes]

kayli69 wrote:

Hello everyone.  Longtime lurker but first post.

I have been fortunate enough to be 10yrs into a high income, private practice procedure oriented specialty.  My wife and I have lived way below our means and saved a large nest egg.  I feel very fortunate we have done this as the stress of practice is becoming overwelming and I want to be out or at least part time by age 45, which is 5 years.  Please review and comment about anything you would do differently and if you think it is possible

3 childdren, age 1.5yr, 3yr, 4yr

Private practice avg yearly pay: $800,00-1,000,000 now that I am partner (been partner for 5 yrs).  Typically save 75% of take home

Taxable acct: $ 3,200,000.  Invested in 80% stocks/20% bond, all Fidelity index funds.  On average contribute $350,000-$400,000/yr

$401K/profit sharing: $550,000, contibute max which I believe is $52000/yr.  50% stock market index, 50% total bond index

Cash balance plan: $100,000.  Contribute $80000/yr–plan is only one yr old.  Our practice advisor has us invested in several funds with goal of 4%/yr.

529 plan New York State: Have one for daughter age 4 with 60K, one for son age 3 with 40K.  Contribute 10K per year to each account

wife Roth $140000.  My Roth $50,000.  Contibute $5500 backdoor to each every year

Live in a house appraised at $475,000 and have been doubling monthly payments so will be payed off in 3 yrs.  Have $160K to go

Student loans: $105,000 at 3.5%.  I know, I prob should just pay this off

Hobby farm/cottage: 3% owner held mortgage, have $175,000 balance.  Aprraised value $365000.  I have been in no hurry to pay this off

 

Once primary house mortgage is gone, our monthly expenses will prob average $7000 but would like to budget $10000 per month just to be safe

Comments?  Please feel free to critisize also

 

 

 

 

 

Click to expand...

Agree with everyone else, it looks like you are FI already. Maybe it's worth exploring whether you can go part-time and extend your career that way?

[wideopenspaces]

Vagabond MD wrote:

Looks like you are in great financial shape.

I see little reason why you could not retire at 45 in 5 years but…

My only hesitation would be that you are just getting started with the expenses related to raising the children. People (me included) underestimate what is or could be the financial requirements of one’s children. Many of these are discretionary (i.e. oboe lessons with a Master on the other coast, pitching camp every third weekend in Florida, etc.), but what if one of your children needs extensive educational support, special care or treatment?

Is there any way that you could continue to work on a part time basis, at least until the kids are launched (or close)?

 

Click to expand...

Vagabond, I've often wondered what you meant when you regularly talk about how expensive kids are. Now I know! And I'm wondering if you'd like to adopt me? ;-) Seriously though, these are literally the craziest kid expenses I've ever heard of. And I know some seriously wealthy people. Is this the norm where you live??

Sorry to hijack the thread. OP is doing amazing and is already set, as others have pointed out.

[VagabondMD]

wideopenspaces wrote:

Vagabond MD wrote:

Looks like you are in great financial shape.

I see little reason why you could not retire at 45 in 5 years but…

My only hesitation would be that you are just getting started with the expenses related to raising the children. People (me included) underestimate what is or could be the financial requirements of one’s children. Many of these are discretionary (i.e. oboe lessons with a Master on the other coast, pitching camp every third weekend in Florida, etc.), but what if one of your children needs extensive educational support, special care or treatment?

Is there any way that you could continue to work on a part time basis, at least until the kids are launched (or close)?

 

Click to expand…

Vagabond, I’ve often wondered what you meant when you regularly talk about how expensive kids are. Now I know! And I’m wondering if you’d like to adopt me?  Seriously though, these are literally the craziest kid expenses I’ve ever heard of. And I know some seriously wealthy people. Is this the norm where you live??

Sorry to hijack the thread. OP is doing amazing and is already set, as others have pointed out.

Click to expand...

I have only changed the instrument and the baseball skill set so as to not identify myself or the other parties. No, my kids do not have those expenses, but these are real expenses for friends and colleagues. I do have child-related expenses that would have never imagined in order to develop their talents and to help correct their deficiencies.

We live in the Midwest, so whatever we are doing/spending, you can multiply by 5 for California and 10 for New York. The amount of money you can spend on your kids is limitless, and sane, otherwise fiscally responsible people regularly will overindulge their children.

Yeah, the OP can walk away from his medical career tomorrow...so long as the three year old is not a budding virtuoso cellist and the four year old is not the second coming of Nolan Ryan (sorry for dating myself with that one).

[Drsan1]

I agree with the above you are great financially. Make sure everything else in your life is also awesome...Even if it means spending some. You have a million dollar salary, I'm not saying buy a Bughatti but hopefully you and your family are enjoying life and making memories. Oh yeah...pay off that student loan.

[Hatton]

I agree with everyone that the op is in great shape.  My only comment is that hobby farms/cabins can be a significant cash drain if you let them.  John Deere items are more expensive than Teslas.

[kayli69]

Greatly appreciate all the comments/suggestions.  I will plan on paying off the student loans this year.

Children's cost are still the big unknown to me and are largely what make me nervous about pulling the plug.  I may significantly cut back on my workload.  However, as others in private practice likely know this can be difficult as the lack of accessability will cause PCPs to stop referring

I will also look into superfunding the cash balance plan

My hobby farm is my sanctuary and is worth every penny I have spent on it.  When I am there, all my stress is gone.

Over the last few years, the practice of medicine has gotten so onorous that most of the enjoyment is gone.  EMR has led to an endless amount of work.  I am up at 5am signing notes, labs and path for 1.5hrs.  By 9am, my task box is again full.  When on vacation, I must have EMR access or the amount of work I would come back too after a week away is overwhelming.  I am just plain sick of the never ending hamster wheel.  And it just seems to be worsening

[janettebournes]

It's sad that medicine has come to this

That we would be driving away people who are so productive and so successful

I do agree that it doesn't appear to be getting better. I think the best any of us could hope for is to achieve FI as early as possible so we have the leverage to mold our worklife more to our liking.

Or (sadly) if necessary, leave it all behind

[jfoxcpacfp]

From the information you posted, it appears you are on track to retire early and should do fine. Keep in mind that you may be looking at 50+ years with no earned income for 2nd to die with 3 young children to raise. Health issues, marriage problems, poor decisions in bear markets, personal liabilities can all play a part in thwarting your plans. Please consider a financial checkup with a financial planner before you pull the trigger. It could be very worthwhile and will help relieve that anxiety.

[Hatton]

Psychological down time is very important. Do you share call?  You really need to find a way to let go for some period of time.  I was a solo ob/gyn for many years but I shared weekend call.  When I was off.  I was off.  The farm can be a good hobby.  I also own one.  I think we all agree that medicine is really becoming more stressful because there is no sense of control any more.  Most docs feel like hamsters and just want the wheel to stop.

[StarTrekDoc]

Congrats on staying getting past FI and well on your way to RE.   Though the $$ are great, there's real burnout potential and from the reading you can rebalance that work/life to the betterment of the mental aspects of private group practice.   Yes, you work effort:earnings will decrease, but the sheer volume of the paperwork appears to be overwhelming.  There's system redesign efforts that your practice may benefit if your inbox is that full that quickly--but a whole other conversation beyond financials.

RE maybe nice for some, but luckily medicine usually affords us to have longer careers if we don't go blazing hot white.  $800k income is going to be very hard to walk away from, even going part time, you'll be a super high income earner.  Any reason for a hard 45 stop date?  I would advocate  part time now, have fun with the kids (and they WILL be money pits if you allow for it).  Being there for a show/performance/event goes a lot further than one can imagine.   Our teenagers routinely watch their dropbox videos of younger self now and love having stories retold.