seeking thoughts on job choice(s) for someone starting FI journey

[heydoc]

hoping some intelligent folks will weigh in.

Background: I am a couple years out of training, living in a very HCOL area, working academics. I mostly enjoy my job, but after discovering MMM, WCI, etc, am really into the idea of FI. Since I dislike research and don’t get to do much teaching, i don’t see the point of staying in academics and taking the pay cut. I’ve been looking around and have 3 potential next moves:

MSG in no income tax state. Nice group, very flexible re practice setup, income upside - production based after initial guarantee.

COL is not cheap but maybe 10-15% better than our current area. Big unknown: group is likely to merge or be bought, given trends in healthcare in the area, so who knows how things might change. Big bonus: near family.

MSG in current HCOL area. Nice group, very busy, bit of a grind, but cool colleagues. Pay is also production based after initial guarantee, significant upside assuming FFS doesn't die in the next 5 years (I am aware that it will eventually change!)

Kaiser in current area. Salary would increase ~30%. No income upside, but steady pay, very nice group, there is the possibility of pension/golden handcuffs. The good: maybe a little protection from future cuts in fee for service? The bad: I am not necessarily sure I’d be anywhere for 20 years…so I shouldn’t count the pension.And, no control over schedule. You jump when they tell you to jump

We are dual income, 1 kid. Currently save around 30% of total income. Housing and daycare are 75% of costs! With the out of state MSG, can save ~100K more/ increase savings rate to 55% or more<

With the out of state MSG, can save ~100K more/ increase savings rate to 55% or more With the MSG in current area, similar: save ~100K more/year, savings rate 55% or more

With the MSG in current area, similar: save ~100K more/year, savings rate 55% or more With Kaiser, savings rate maybe 45% of total income. If get to pension level, and it’s still funded, it’s worth a LOT . But that’s two big Ifs.

With Kaiser, savings rate maybe 45% of total income. If get to pension level, and it’s still funded, it’s worth a LOT . But that’s two big Ifs.<All nice groups/great colleagues. </span></p>

All nice groups/great colleagues. Would folks:

Would folks: take the leap and move out of HCOL to slightly less crazy area closer to family, go thru hassle/expense of selling house/moving/starting over with house search and childcare, and risk changes to the MSG if their situation changes and they are indeed bought, with resultant less control over practice? If things go well, plan would be work / save like crazy and aim for FI/RE. </span></p>

take the leap and move out of HCOL to slightly less crazy area closer to family, go thru hassle/expense of selling house/moving/starting over with house search and childcare, and risk changes to the MSG if their situation changes and they are indeed bought, with resultant less control over practice? If things go well, plan would be work / save like crazy and aim for FI/RE. < go for a little more safety and possible pension at Kaiser?</span></p>

go for a little more safety and possible pension at Kaiser? change to MSG locally, work / save like crazy, and aim for FI?<

change to MSG locally, work / save like crazy, and aim for FI?

[ACN]

Think you may have copied and pasted from another site with HTML edits, which are not recognized.  I tired to edit most of the HTML out without losing your content.  But I would re-read it and make sure I didn't delete any important items on accident.

[ENT Doc]

I'd be very tempted by the Kaiser job.  Not that I think FFS is going away any time soon (will depend on the specialty and procedures/diagnosis).  It's pretty comparable from an improved savings rate perspective and it has a massive upside in the pension.  Plus, if things do change drastically with payments down the road they are the organization best positioned for change.  I'd let the schools factor into my decision too.

[q-school]

i think the money is a factor, but not the biggest factor.  which practice do you think you would enjoy the most?  all of them sound like they would solidly improve your financial status.

further, it sounds like you are concerned about COL, but basically two of three are same high COL and one if another reasonably high COL near family.  so the basic problem of high COL due to day care and housing is not addressed.  what does your spouse want?

it's hard to overstate the value of a pension, imo, for a person who wants to retire young.  i'm pretty sure kaiser will either have to ratchet down pay or ratchet down pension pay at some point.  but i'm pretty sure the market is going to correct and i'm still in it.  but if we were speaking face to face, that would be a relatively low factor behind job enjoyment, collegiality, spouse preference, family, and a bunch of other things.

good luck.

 

 

 

[jfoxcpacfp]

This is an ideal situation in which financial planning can help you make a decision. A good planner will run scenarios that you can study side-by-side and better evaluate the options you are facing. Spending a few thousand for planning could seriously make a difference of tens of thousands of dollars in future years, not to mention your targeted quality of life. You will have more clarity about the future impact of your various choices with a better chance of making the best decision for you and your family.

That said, I am absolutely not trying to diminish the usefulness of the above input.

[adventure]

heydoc wrote:

Housing and daycare are 75% of costs!

Click to expand...

Rent or own? Any opportunity to change the housing costs? How many more years of day care? 1 - maybe, let it go. 10 if you have 2 more kids on the way, maybe reconsider.

 

[adventure]

heydoc wrote:

Would folks: take the leap and move out of HCOL to slightly less crazy area closer to family, go thru hassle/expense of selling house/moving/starting over with house search and childcare, and risk changes to the MSG if their situation changes and they are indeed bought, with resultant less control over practice? If things go well, plan would be work / save like crazy and aim for FI/RE.

Click to expand...

Depends on the differences.

jfoxcpacfp wrote:

This is an ideal situation in which financial planning can help you make a decision.

Click to expand...

Agreed here. Some financial planners have free initial consultations, which can be a phone call well spent. See how it goes. You have to be a team, and starting with free seems pretty good.

Before that call, I'd start 2 spreadsheets. The first is simply a list of your goals. Both life, family, and financial. Retire at 45, buy a boat, start a bakery, visit all 7 continents, have 3 kids, have parents help raise them, have 4 bicycles each, etc. You can, but not required to rank them. Make the list with your SO. The second spreadsheet will help you start to compare savings rate, total saving, etc. Start here with each row being a year, and columns for estimated income, expenses, savings, 401k growth, etc.

 

I know someone who just moved form HCOL to less of a HCOL, and is taking home 2x the money by paying less in rent, and less state taxes.

[heydoc]

Thanks all, for the responses.

We have a financial advisor who ran the numbers (that's where I got the numbers re pension worth, and it certainly is worth a lot if it remains solvent)

Unfortunately, can't change the housing cost without leaving the area; we bought several years ago and current rents in our area are nearly the same/more than our mortgage. Unless we went down to a small apt -and even then rents are crazy. Daycare - at least 3-4 more years. Yikes, I just realized how much dough that is.

Thanks, adventure - I have those spreadsheets, and am assigning weights to important factors for each job - trying to see what comes out ahead.

I guess my hangup about Kaiser is the feeling you're being told what to do as part of this corporation, and a bit of the handcuffs mentality. However, FFS isn't a cakewalk either, having to consider insurance coverage, deal with deductibles, etc, and with the risk that reimbursements could come crashing down. Kaiser doesn't have that - and has the pension. All the groups have great potential colleagues.

I suppose this is a good problem to have! Leaning slightly towards the local MSG and reevaluating in 2 years, aka kicking the can down the road a bit while saving like crazy....

[VagabondMD]

If reimbursements "come crashing down" don't think for a second that working for Kaiser will shield you any longer than the termination notice period on your contract. If they ain't making money, you ain't making money. I have heard mixed things from people working for Kaiser- some have love it, and others have hated it. It probably depends on location, specialty, co-workers, supervisors and your own personality attributes.

If it were me, with what you describe in the OP, I would take a higher paying private practice job in the lower COL area.