How much do we really need for retirement?

[Lordosis]

Problem is

Many of us continue to work because the alternative is sitting at home. I could have called it quits about 8 years ago but what would I do with a free time. I had a kid in school and so I cannot suddenly pack up and do a travel in SE Asia while she was preparing for SAT. So I did work to cover my annual expenses. But the untouched savings from prior years with reinvestment has grown. COVID with travel lockdrowns would have me going bald pulling my last remaining hairs out and checking to a psychiatric facility if I were forced to sit at home with nothing to do. My work helped me have a meaning and purpose.

Also, how much can you really spend down. I hate those luxurious travels. I like to mingle with the masses. Even spending $300-400 per night on rooms and max of $1000/day all expenses, I would never be able to spend it down before I depart. So I have no choice but to give part to inheritance and the rest to charity.

Good problem to have

[VentAlarm]

Problem is

Many of us continue to work because the alternative is sitting at home. I could have called it quits about 8 years ago but what would I do with a free time. I had a kid in school and so I cannot suddenly pack up and do a travel in SE Asia while she was preparing for SAT. So I did work to cover my annual expenses. But the untouched savings from prior years with reinvestment has grown. COVID with travel lockdrowns would have me going bald pulling my last remaining hairs out and checking to a psychiatric facility if I were forced to sit at home with nothing to do. My work helped me have a meaning and purpose.

Also, how much can you really spend down. I hate those luxurious travels. I like to mingle with the masses. Even spending $300-400 per night on rooms and max of $1000/day all expenses, I would never be able to spend it down before I depart. So I have no choice but to give part to inheritance and the rest to charity.

I mingle enough with the proles at work, I’ll take the luxurious travel.

[JBME]

What I've been pondering is if many of us are over-saving. I know as physicians, we start saving much later and have some serious catching up to do. Amongst this group, I know what answer I expect to hear.

But studies by Kitces and others suggest those in the top financial quintile "were spending nowhere near an amount that would place them in danger of running out of money."

I bring this up because everything has an opportunity cost. Working harder to earn more money so we can save more money comes at a price. Cramming a ton of money into retirement and other savings makes sense when we are just starting - and probably for the first ten years of practice. But at what point does it stop making sense? Are we all over-saving like crazy at the expense of enjoying today just a little more?

This is near to my heart after watching my best friend pass away from brain cancer in his 40s. I'd do anything to have another powder day at Alta with him. I'd even buy the first round of margaritas in the Sitzmark! The same goes as a new father - my priorities between work and being at home have shifted dramatically in the last few months.

just like there can be a glide path to retirement (go part time instead of going from 100 to 0) and there's a glide path in investments towards retirement where you take less risk, I think it's reasonable especially for people on this forum to have a glide path to saving.

The common recommendation is 20%. I'm sure a lot here do more than that. Usually the recommendation is 20% to get to FI. But the idea of FI is that you can stop working totally. But what if you like working? Most people like working, they just want to work less. So most I don't think stop working once they are FI. Most people will continue to save after FI but the definition of FI means you shouldn't need to save a penny more.

This is why I'm against the idea of 20% until you get to FI. I think you can enjoy the journey more along the way. Start saving 20-25%. Establish good habits. Do that for at least 5 years. Then reassess. Are you ahead of plan? Behind? It's likely due to market conditions at that point. If you are ahead of plan, consider cutting savings back to 15-20%. Then reassess again after 5 more years. IF still ahead of plan, save only 10-15%. You get rewarded for starting out with good habits....the reward is having to save less when you are older.

Additionally, it's a lot harder to spend too if you've been saving for 15-25 years. It should be easier to spend if you have slowly saved less and less over that 15-25 year journey.

[altadoc]

I appreciate the glide path idea towards retirement. I also think that a gradual clinical slowdown can make for a more successful full retirement for physicians who are busy in their career and can have a difficult time stepping away.

What I try to instill in my clients is that once you are at the point on the curve where you can save less, it also (usually) means you can work a bit less. Which has the added benefit of... paying less in taxes too. It's a positive reinforcing cycle.

[Lithium]

I agree that we're oversaving but at the same time, retiring to nothing in my 40s is inconceivable. Finding a good part time job in medicine is really hard, and working full time into my 60s sounds just as bad as retiring to nothing. It takes a long time to find a good off ramp from medicine, and most of us who are oversaving should be thinking about how to start sooner rather than later. (Otherwise, why oversave?)

[Kamban]

This is why I'm against the idea of 20% until you get to FI. I think you can enjoy the journey more along the way. Start saving 20-25%. Establish good habits. Do that for at least 5 years. Then reassess. Are you ahead of plan? Behind? It's likely due to market conditions at that point. If you are ahead of plan, consider cutting savings back to 15-20%. Then reassess again after 5 more years. IF still ahead of plan, save only 10-15%. You get rewarded for starting out with good habits....the reward is having to save less when you are older.

Doing all this will make my head spin and will make the American public more confused. Better to give one number and stick to it. 20% has a nice ring to it.

[Kamban]

https://getpocket.com/explore/item/think-retirement-is-smooth-sailing-a-look-at-its-potential-effects-on-the-brain?utm_source=pocket-newtab

Emerging research suggests that retirement could lead to a decline in your cognitive function, says gerontologist Ross Andel. Anyone who’s retired or thinking about retirement should read this to learn more.

[childay]

I agree that we're oversaving but at the same time, retiring to nothing in my 40s is inconceivable. Finding a good part time job in medicine is really hard, and working full time into my 60s sounds just as bad as retiring to nothing. It takes a long time to find a good off ramp from medicine, and most of us who are oversaving should be thinking about how to start sooner rather than later. (Otherwise, why oversave?)

Small outpt cash pay private practice?

[JBME]

Doing all this will make my head spin and will make the American public more confused. Better to give one number and stick to it. 20% has a nice ring to it.

I don't disagree. But the ideal scenario is probably one that is flexible. The 4% rule has a nice ring to it, but there's a ton of blog posts that say no one really adheres to the 4% rule and rather than try to ensure their variable spending has flexibility to it so they can just decrease expenses rather than go through the math to figure out the 4% withdrawal, adjusted for inflation. The point is during the withdrawal phase one should be flexible, and so during the accumulation phase one can also be flexible

[Lithium]

Small outpt cash pay private practice?

outpatient, 24/7 call, worried well. Hard pass.

[childay]

outpatient, 24/7 call, worried well. Hard pass.

I hear you bro lol. Yeah part-time inpatient may be a challenge
Maybe jobshare situation?

[Lithium]

I hear you bro lol. Yeah part-time inpatient may be a challenge
Maybe jobshare situation?

Not opposed to the idea of a job share, but the stars really have to align. You have to find the right dance partner as well as middle management that is creative enough to figure out how to split the benefits baby. I haven't had any luck with that. Maybe others (@FIREshrink) have.

[mamaham]

Max Power ,
Yeah, funny part is activities change for sure. It's just the the cash sucking down the drain don't stop. It probably starts about 80. That sunset set or sitting out by the ocean is a PITA. It's like the reverse of having a child. Each year they need more help. Somebody needs to help. That gets expensive and you can't get a teen babysitter. They need to move around, eat, bath and everything needs to be supervised. That brain can be really sharp, don't let em fool you. They get grouchy is you sit them in a corner like a plant. The expenses actually go up, not steady or down. It is a labor or love or extremely expensive. If you want to be planted in a chair and vegetate, feel free. That is like: I'm worried that after I retire I'll just sit at home, watch TV, and vegetate. It's funny how life goes. Stroke can immobilize and not really impact your cognitive skills. A loss of mobility does not mean a person is content to be planted. Funny, they actually want a life the same as when they were 40. They really do.

My grandparents are 90. They spend virtually no money at all. Groceries, house expenses, property tax. If they do go into assisted living it’s 8k a month so 96k/yr. You aren’t traveling and spending money at 90 like you are in 60s-70s. I’ve been thinking about it and wondering if we should change our savings goals (When to consist FI) bc we’ve seen them spend no money - pretty much since 80ish. I do not want to end up with a large inheritance or leaving tons to charity. I want to give to charity while I’m alive. And enjoy the money while alive and moving.

[Tim]

My grandparents are 90. They spend virtually no money at all. Groceries, house expenses, property tax. If they do go into assisted living it’s 8k a month so 96k/yr. You aren’t traveling and spending money at 90 like you are in 60s-70s. I’ve been thinking about it and wondering if we should change our savings goals (When to consist FI) bc we’ve seen them spend no money - pretty much since 80ish. I do not want to end up with a large inheritance or leaving tons to charity. I want to give to charity while I’m alive. And enjoy the money while alive and moving.

100% agree with the travel dropping off. Part of that is the expense involved. My MIL wants to take a trip to Mexico to visit her brother. I would love to be able to arrange it. Unfortunately the auto route is through Eagle Pass that has its on problems. We used to drive it once a year. And plane trips to other spots in Mexico. Still have a house down there. Should we rent a private plane? Sorry, the security costs alone would be astronomical. We provide ALL living assistance 24/7. That alone is expensive for in home care. If you have access to someone to change light bulbs or buy the groceries or take you to the pharmacy or ........ living assistance that covers the big expense ramp up. Make not mistake, at 90 someone needs to pay the bills. They are spending nothing but I can guarantee someone is helping in some ways. Even if they are functioning on a daily basis, they need help and probably aren't paying for it. Family helps.

[afan]

100% agree with the travel dropping off. Part of that is the expense involved. My MIL wants to take a trip to Mexico to visit her brother. I would love to be able to arrange it. Unfortunately the auto route is through Eagle Pass that has its on problems. We used to drive it once a year. And plane trips to other spots in Mexico. Still have a house down there. Should we rent a private plane? Sorry, the security costs alone would be astronomical. We provide ALL living assistance 24/7. That alone is expensive for in home care. If you have access to someone to change light bulbs or buy the groceries or take you to the pharmacy or ........ living assistance that covers the big expense ramp up. Make not mistake, at 90 someone needs to pay the bills. They are spending nothing but I can guarantee someone is helping in some ways. Even if they are functioning on a daily basis, they need help and probably aren't paying for it. Family helps.

If you have enough money you can pay for all of this to be provided at home. Or you can go into assisted living. Again the secret is having enough money to cover the cost.