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Is it this simple? Retirement planning.

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  • #31
    Originally posted by Hatton View Post
    Some good points here. At a certain inflection point your investments massively outperform your work income. When I noticed this for myself I started to cut the number of patients per day and the number of days per week because I could. I would recommend drilling down on your spending to get a better idea of what you might actually spend when retired. This will help you plan. As others have said 9% is too high a return to plan for.
    Hatton, give me some sense of that "inflection point". i.e, how do you know when you are there? At a certain multiple of assets to annual savings? to income? Please elaborate. How does one know when he/she is at that inflection point? When do you think that happened for you? Thank you.

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    • #32
      Originally posted by MJ23 View Post

      Hatton, give me some sense of that "inflection point". i.e, how do you know when you are there? At a certain multiple of assets to annual savings? to income? Please elaborate. How does one know when he/she is at that inflection point? When do you think that happened for you? Thank you.
      Not Hatton, but assuming someone has 5 million invested with a 10% return, you’d get 500,000 just in investment returns. That’s probably more than the average doc can save a year. (Just an example with round numbers so you can do a quick back of the napkin calculation of what the inflection point would look like for you.)
      Last edited by ObgynMD; 12-16-2021, 10:21 PM.

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      • #33
        As others have hinted at, a lot of this conversation is focused on the bottom 10% of scenarios returned in a Monte Carlo simulation. I’d suggest anyone who wants to get really nerdy about this topic go and mess around with some simulations. I have enjoyed the simulator on portfoliovisualizer.com. Basically, you can enter in an amount and duration, and then mess with AA, withdrawal strategy, and SORR. For most on this site, I’d be surprised if your current inputs didn’t return with >85% success. But then you could examine what levers you can pull to mitigate risk of falling into the bottom 15%. The biggest surprise for me was the massive impact a flexible withdrawal strategy has. SORR is real, and it’s nice to see it play out as well.

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        • #34
          The strategy is to de-risk the portfolio to avoid sort; otherwise losing 50% of your portfolio will be devastating

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          • #35
            Originally posted by VentAlarm View Post
            Why does everyone on here seem to want to push down the 4% number for RE?
            Because the 4% number makes you almost bombproof (there are only a handful of times in the past when it has failed, such as retiring in 1966-67). Remember, after you have been out of medicine for a while, you cannot go back into it, and in your true old age you may not be able to work at any job at all. It's a bad time to run out of money.

            At a 6% rate of withdrawal, there are many more times when you are eating your seed corn, and will go bust within 30 years.

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            • #36
              Originally posted by artemis View Post

              Because the 4% number makes you almost bombproof (there are only a handful of times in the past when it has failed, such as retiring in 1966-67). Remember, after you have been out of medicine for a while, you cannot go back into it, and in your true old age you may not be able to work at any job at all. It's a bad time to run out of money.

              At a 6% rate of withdrawal, there are many more times when you are eating your seed corn, and will go bust within 30 years.
              I meant that the “cool” thing is to go to 3.5% or even lower. I understand the concern of running out of money and the difficulty (read:impossibility) in going back to clinical medicine. I just mean that if you actual RE, I can’t imagine you’ll never make another dime. If I’m unhappy but have 20x expenses, I’m out. If the market does well, you’re fine. If not, you can squeeze and do some side work.

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              • #37
                Originally posted by VentAlarm View Post

                I meant that the “cool” thing is to go to 3.5% or even lower. I understand the concern of running out of money and the difficulty (read:impossibility) in going back to clinical medicine. I just mean that if you actual RE, I can’t imagine you’ll never make another dime. If I’m unhappy but have 20x expenses, I’m out. If the market does well, you’re fine. If not, you can squeeze and do some side work.
                Much depends on how long you have been out of the workforce and the age you decide you need to make some cash. Side work after 5-10 years out may be more difficult. Speaking of a dime, you can "work" many places on commission, like Home Depot selling custom kitchen installations, or selling used cars and not make a dime. The "guarantee by hour" selling your time takes a big attitude adjustment. School bus driver , about $30k per year. $20/hour is $40k for 40hrs a week.
                Ten years of getting up at 4:30 am, an unpaid break and back at 1:30pm and get home at 5:30-6 pm is a grind for only the money. $300k for one year of doctoring for 10 years of bus driving. Work in a pool supply store? The shelf life of one's prior vocation or even skill sets loses value and disappears. You can make a dime, but you might not like the job requirements.

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                • #38
                  Originally posted by Tim View Post
                  Much depends on how long you have been out of the workforce and the age you decide you need to make some cash. Side work after 5-10 years out may be more difficult.
                  Yes. It gets progressively harder to get a new job after you turn 50. We docs are an exception because our skills are so valuable, but once out of medicine we're subject to the same age bias that other workers are.

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                  • #39
                    I have had a few retired patients telling me that their old employers are calling them back to work for a nice premium. Once guy in his mid 70s was considering it.

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