Transitioning the mindset from working full time to taking your foot off the gas

[VagabondMD]

I have not had to budget for vacations in the recent past, as they just seemed to work into the monthly expenses, without causing any significant disruption in cash flow or savings plans.

As I approach part time status slated for 1/1/18, I am having some trepidation about taking one of the bucket list trips. The time window opened up in December for a potential week in southern Spain, and I have all the details in place, but I am having trouble pulling the trigger.

I wonder if this is a harbinger of internal conflicts to come, as one can always talk one's self out of a discretionary item or activity as being unnecessary, imprudent, and or frankly unaffordable, given one's circumstances, especially when the income is decreasing and one approaches retirement. A year ago, I would have been all over this trip. The trip is not inexpensive, but will not materially alter any other plans or goals.

So how does one prepare the mind to accept the life of much lower earned income and the transition away from being a net saver, even when the math seems to back you up.

[The White Coat Investor]

You realize that the rare commodity for you is now time, not money. You have "enough" money, but a very limited quantity of time left on Earth.

 

Some people also benefit from psychological cruxes that give them "permission to spend", you known like SPIAs or even a separate budget item dedicated to vacations that you either use (on vacation) or lose (by giving to charity if you don't go on the vacation.)

[jfoxcpacfp]

Vagabond MD wrote:

So how does one prepare the mind to accept the life of much lower earned income and the transition away from being a net saver, even when the math seems to back you up.

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@Vagabond, I hesitate to say this for the fear of sounding self-serving, but some good financial planning, including projections will almost certainly set your mind at ease. The change in attitude is amazing when an impartial FA shows you how and why you'll be fine and what you can afford to do. I believe you mentioned awhile back that you were talking to a financial advisor - I hope this process gives you the peace of mind to enjoy the freedom that you've worked for and deserve.

[SValleyMD]

I'm a long ways out but that concern there is one reason why I'm not sure I'll ever pull the trigger on early retirement.

I would rather work (part time) than worry about a budget, though I will need to get creative to get out Of call like you've been able to!

Regardless I'm sure you're more than fine and just need to create some clever mind tricks for yourself like wci alluded to.

[Kamban]

Vagabond

This is how I approached the problem of reduced working with reduced income while also wanting to take good vacations.

First I made sure that I had invested enough so that if I did not touch my investments till age 65, I would have enough money to live till age 95 as well as fund my daughter's education and leave her some inheritance.

That meant that every year I had to live within what I made for that year. So if I had forecasted to make $150K I had to take care of all expenses for that year and anything I had in excess will be used for vacation and other leisure activities. If I ever felt that I might be going over that number I told myself that I can always do locum weekend coverage for others and easily make up that shortfall. So far I have not had to do that for the past 5 years.

Good luck and start enjoying semi retired life.

[Hatton]

Vagabond I find I struggle with this also.  It is a very hard psychological switch from earning and saving to spending.  I never really thought about not going on a trip when I was at my peak of earning potential.  I think one of the reasons that I still work is psychologically it is hard to spend savings.

[Dr. Mom]

The rocking chair test...

Your answer won't be found in finance so stop trying to find it there.  I was struggling with a difficult decision once.  My best friend clarified it for me this way..."Someday when we are old and grey sitting in rocking chairs on a front porch somewhere laughing about the days gone by, would I regret my decision or be sorry I let it slip away?"  Helped me make my decision.

Remember I am peds, so I also find Shel Silverstein helps:

https://www.goodreads.com/quotes/214084-frozen-dream-i-ll-take-the-dream-i-had-last-night.

Go and have a great time.

[Donnie]

Although I am not near retirement, I can tell this will be an issue for me too.

For a doc, I would think this transition would be easier than for most other professionals.  I suspect you could pick up locums or part time work to cover 100% of your expenses and maybe more for the first few years.  This would allow you to gradually transition into full retirement as you get more comfortable with your nest egg not growing as quickly or even contracting.  A gradual transition into retirement isn't possible for many highly paid professionals and is one great aspect of being an MD.

[VagabondMD]

Lots of good advice here, thanks for the input.

@WCI, yes, I do understand that time is what is most precious. As I have said over and over again, you can always go out and make more money, but you cannot make more time.

@jfoxcpacfp I did have a mini session with a bargain basement financial planner, but this is not something that we explored. Again, I understand the math, but the issue is in my head.

I also think that the wind down phase is much more complicated than the working/saving/investing phase and will require some professional help down the road. I am not sure if I need a psychiatrist or financial planner...or both.

@svalleymd Jedi mind tricks engaged.

@Kamban Excellent suggestion. We are doing a slow wind as my wife is continuing to work full time, for at least 2-3 more years (in part to qualify for retired employee/spouse health benefits).

I do not plan to work until 65, but you never know. In reality, I have tracked our spending, and once the kids are out the door, we could live reasonably from my part time job or my wife working full time. Both of us are interested in hanging it up in the next 3-5 years (mid to late 50's).

@hatton1 I thought you would have the answer!!!

@Dr. Mom I like the idea of the rocking chair test, but it must be used rarely and judiciously. Otherwise, I could get myself into mischief of all sorts. BTW, The Giving Tree is my favorite Shel Silverstein story.

[jfoxcpacfp]

Vagabond MD wrote:

@jfoxcpacfp I did have a mini session with a bargain basement financial planner, but this is not something that we explored. Again, I understand the math, but the issue is in my head.

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You are correct that financial planning is 50% numerical and 50% therapy. Your heart matters just as much as your head.

[Dr. Mom]

Vagabond MD wrote:

@Dr. Mom I like the idea of the rocking chair test, but it must be used rarely and judiciously. Otherwise, I could get myself into mischief of all sorts. BTW, The Giving Tree is my favorite Shel Silverstein story.

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How often do you really have trouble making big decisions?  You don't seem the type that would.  This trip is an experience, for others as you are likely taking someone along with you, and paid for ahead of time.  You've ticked the right boxes.  Go already!  It will be paid with the savings that you would pay a financial advisor to tell you that you can afford to go!  The action of going and how you feel afterwards will answer far more for you than therapy about if/how to spend beforehand!

[Complete_newbie]

Time > money. It really is. Trips can be inexpensive. Time is expensive. I have gotten into arguments over this on this board, but as a 32 yo I feel old. I wish I was 21

You got enough money (I think). Enjoy time.

[Hatton]

Dr. Mom wrote:

How often do you really have trouble making big decisions?  You don’t seem the type that would.  This trip is an experience, for others as you are likely taking someone along with you, and paid for ahead of time.  You’ve ticked the right boxes.  Go already!  It will be paid with the savings that you would pay a financial advisor to tell you that you can afford to go!  The action of going and how you feel afterwards will answer far more for you than therapy about if/how to spend beforehand!

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I like Dr. Mom's idea.  Go ahead and go and use the money you saved by not bouncing ideas off a financial planner.  You seem to be very good at this yourself. You are healthy and in good financial shape so go for it.  I have just committed to something that will cost more than your trip over time.  I just adopted a new puppy.

[The White Coat Investor]

I figure that since I'm 42 years old, I'm half dead. And that last quarter of my life my health may not allow me to do what I like to do either, so I've really only got 1/4 of my life left. When you think of it that way, you start scheduling all the stuff on your bucket list as quickly as you can.

Not very many of us have "work more shifts, take more call, see more patients, do more procedures" on our bucket list.

[VagabondMD]

The White Coat Investor wrote:

I figure that since I’m 42 years old, I’m half dead. And that last quarter of my life my health may not allow me to do what I like to do either, so I’ve really only got 1/4 of my life left. When you think of it that way, you start scheduling all the stuff on your bucket list as quickly as you can.

Not very many of us have “work more shifts, take more call, see more patients, do more procedures” on our bucket list.

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Crap, I am more than half dead! My window is closing. I better make the best of the next ten years.