retirement

The FINANCES behind retiring from medicine at 37

I originally wrote this article as a guest blog for the site http://www.physicianonfire.com/ last month.  The physician author of this blog specifically requested I write on this topic as his site deals with financial independence and retiring early (FIRE).  I am now posting here since I have had requests from readers to share the financial decisions that allowed me to retire early from a medical career. Please let me know if you have suggestions/thoughts, or what has worked for you in the comments below.

Usually, when I tell people I retired from my physician career at age 37 they respond with shock.  Some look at me like I am the most foolish person they have ever seen.  Some with disdain (“all that medical education wasted”).  Some doubt that my future will be secure without having a steady paycheck.  However, as it is only my close friends/family I discuss this with, they mostly respond with sincere happiness as they understand this is a life choice I made after much deliberation and know that it is the right decision for me and my family in pursuit of the life I want to lead.  There are many factors that led to this decision and I have written about some of it in previous articles Retired at 37: Breaking Up With a Career in Medicine.  However, this article focuses on the financial aspect.

Finances can be a tough subject for physicians.  We are notorious for being poor money managers.  Most of us don’t have the time or desire to commit to understanding personal finances in detail. Who has time to learn about 401K’s, the stock market, and budgets while learning about anatomy, pharmacology, and immunology while in medical school?  Or while working 80+ hours per week in residency?  Besides, we won’t be earning an attending physician paycheck for years.  By the time we earn a real paycheck we are so exhausted by the delayed gratification of our 20’s that we want to splurge a little, right?

I don’t proclaim to be an expert by any stretch.  However, I found the freedom that comes with financial independence to be life changing and something that should be attainable for all physicians. I am not here to encourage everyone to retire in their 30’s from medicine, but to gain financial freedom.  I hope you can continue practicing medicine into your 60’s (if this is what you want), but to not feel trapped in a situation when encountering unsustainable job structure, illness, divorce, etc.  Of course, finances did factor into my decision to retire.  I have 3 kids and wouldn’t stop working if I needed a steady paycheck to support them. Luckily, some decisions along the way helped me not to rely on this paycheck moving forward.  There are many different paths to financial independence.  Here are some steps that led me down my path to financial freedom and ability to retire early:

  1. Kept medical school loans to a minimum. Yes, you do have control over this. Most people outside of medicine are shocked to find out that medical students are essentially able to get loans for as much as they want.  You can determine your own “living expenses” and someone will be ready and willing to give you this loan as medical students are typically good about ultimately paying it back (although years down the road and with a ton of interest).  I was lucky my parents paid for my undergraduate studies but medical school was on my own.  I probably started my “frugal” mentality at this time.  My husband, who I was dating at the start of medical school, would often make fun of me for my bare cabinets with canned green beans and ramen noodles as my main staples.  Of note, he also had loans from undergraduate school that we had to factor in as well. Don’t worry, we didn’t eat like that forever!
  1. Started paying off loans immediately after forbearance ended at the maximum amount we could, not the minimum required.
  1. Lived well below my means. We continued living in my residency townhouse for a while, even after accepting an attending job.
  2. Looked for job with high earning guaranteed right from the start. Many positions I was offered entailed low salary the first few years and then potential for partnership and jump in salary but not until 4-6 years down the road. This was downright scary to me.  What if I didn’t like the job? What if they never actually promote to partner?  The writing was on the wall for private practice in ob-gyn with soaring malpractice premiums and it seemed unsustainable to me for most of these private practices.  I wasn’t willing to take the chance. I had also heard that many people may leave their first job after 2 years.  So, I figured why not at least get a large salary those first two years while I get a better feel for the landscape? Luckily, my job did not have a non-compete agreement, so I knew I would have options if I decided to leave (I actually stayed with my first job as I was initially very happy with my choice out of residency- this lasted for about 7 years).
  1. Maxed out yearly contributions to retirement vehicles. 403B during residency, 401K with new job (which also had a pension that vested after 5 years), and started a Roth IRA. I had to devote some time to learn about what all of these things are and why they are important! Investing is key.finance
  1. 529. My first child was born in residency, but I did not start a 529 at that time as wanted to maximize retirement account yearly contributions first. Once those were being maxed out, I started 529 for oldest child and then when subsequent children were born funded those too.
  1. Lived off one income. I feel this one factor made the absolute most difference!! Certainly not all, but most of my colleagues are in a dual income household.  We always lived off one income (mine) and paid off loans with the other.  This always forced us to live within our means. This may be hard to accept initially as many physicians feel that the delayed gratification never ends, but trust me it’s worth it! I do have to admit, our one splurge was a nice vacation every year.  “Work hard, play hard” is my motto and I probably wouldn’t have made it without those necessary times of respite to recharge. Travel is one of my passions.
  1. Got Creative. For those who have a partner who does not have a career in medicine, there may be options opened for them since a physician job is very secure.  You will always be able to find work as a physician and it is quite unlikely you would lose your job. In addition, health benefits are common with employed physician jobs and therefore you can take a big burden off your partner to worry about this.

–          This can free up some room for ingenuity with your partner if their job allows for different payment structures. Commission based jobs with a low salary and no health benefits may be unsustainable for someone supporting a family. However, if you use the idea of living off one person’s salary (your physician salary) and allow your partner to get creative it can really pay off.  Employers may jump at the opportunity for this type of pay structure which would have very little risk for them but could have huge potential upswing for the partner.   We chose to take this risk. We couldn’t have done it without the stable physician salary/benefits component.  It was possible my husband would make barely anything certain years or alternatively, make large sums depending on the work flow.  Nothing was guaranteed to last and so any windfall that came from his work was immediately placed into debt repayment or kid’s college funds.

When starting out of residency at my first attending job, I planned to continue to practice medicine until my 60’s, cutting back on hours if needed, but I assumed my love for medicine would keep me wanting to work indefinitely. Several things changed my mindset, including financial independence.  Once I knew I didn’t “have” to work, I started to view my career a little differently.  Maybe I wasn’t honest with myself previously with how the stresses of on call nights, sleep deprivation and increasing administrative workload was negatively impacting my life and health. It sometimes feels like you are on this treadmill that keeps going and you don’t have the time or energy to ever stop and think about what you are doing and if you are leading the life you envisioned for yourself.

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Once financially independent, it became my choice whether or not to work.  The frustrations of salaried work in ob-gyn, the negatively changing healthcare climate, and missing time with my young children was weighing on my mind.  I wanted (needed) out for myself and my family.   However, I needed a push to get off that treadmill and realize what was going on.  “Luckily” for me I had a major health scare that also occurred at the same time that I reached financial independence.   Decision made.

Now, the choice can be mine if I decide to ever return to medicine.  I’ll never close that door completely, although I don’t see it in my future if you ask me now.  There is so much out there I am still excited to explore.

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birth plan, epidural, episiotomy, hospital birth, Physician Training

10 Things to Know Before You Have a Baby in the Hospital

 

  1. You might get sent home. If you show up pregnant with your first baby and it turns out you aren’t 4 cm dilated yet, you will get sent home because you aren’t in active labor. Please don’t cuss out the charge nurse.   Yes, you are in pain- we aren’t denying that.  However, there are limited numbers of beds on labor suites and we need to keep some open for people who will likely roll in right behind you and will deliver way before you. There are no appointments on L & D (labor and delivery) and you never know what will come in.  Space and open beds are the issue, not laziness of admitting physician.

 

  1. Limit it to 2 guests during delivery. More than that is just a distraction.  If there is an emergency, the last thing we want to be worried about is having enough room to take care of you appropriately without people being in the way. In a true emergency about 10 medical professionals will come barging in your room within seconds and if someone is standing in the way it prevents us from doing our job.

 

  1. Ask for the epidural early. If you plan to wait and see how it goes, likely you won’t have time to get an epidural before baby makes the big entrance.   Murphy’s law will dictate that every pregnant patient on L & D will need one at the same time and there is usually only one anesthesiologist, who will invariably be back in the OR with a C-section tied up for half an hour.  Don’t miss your chance!

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  1. You can have a birth plan, but please have it read as follows: I want to leave the hospital with a healthy baby and Mom.  Anything more than that and we get superstitious.  It’s just like the old wives tale about the full moon and people going into labor- there is no scientific evidence to back it up but we all believe it’s true and witness it happen all the time.  The longer and more detailed your birth plan, the higher the percentage likelihood you are to end up with a C-section. At least it always seems to work out that way.

 

It is true that you can expect to have more interventions and temporary discomforts while having a baby in the hospital as opposed to a home birth.  Expect to not eat when in active labor, have monitors strapped to your stomach and frequent vital sign evaluations.  In my opinion, these are small sacrifices to pay to ensure healthy baby and Mom.

 

 

 

  1. Contrary to popular belief, we love when you bring a Doula to the hospital with you! They help you through your labor, make sure your needs are met, and encourage you through pushing.  They are an OB/GYN’s best friend!

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  1. Prepare to not eat food for a while. We are not doing this to be mean. We are doing this because having a baby is dangerous. At any moment you could become a surgical patient. If you vomit and aspirate, this could be dangerous for your health. Nobody wants to have a newborn baby, aspiration pneumonia and recover from surgery all at the same time.

 

  1. We are going to press on your abdomen/uterus after the placenta delivers. I have seen patients get downright angry about this. The reason behind it is that after the placenta comes out, the uterus can become very floppy and you can quickly lose a liter of blood. Massaging the uterus helps with the tonicity and also helps your doctor assess whether there is a problem or if more medications are needed to avoid a hemorrhage.  Just because the baby AND the placenta are out, there is still a need for assessment. You are almost done!

 

  1. Don’t try to rush the OB who is suturing you after you tear with delivery. Episiotomies aren’t routine anymore and are typically only done when medically necessary.  However, it can be very common to tear on your own with a first baby.  Let your OB take their time and do it right, trust me.  10-20 more minutes of meticulous care will be well worth it in the long run, especially if you were “blessed” with a 10lb baby.

 

 

 

  1. Send your husband to get your ice chips. Let your nurse focus on your vital signs, evaluate the fetal monitoring, and document your progress.  Your husband/support person should be the one getting you the much needed ice.  Besides, it will help your partner feel useful at a time when they are often struggling over lack of control and they want to help you in any way they can.

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  1. You are in competent hands. A normal labor can turn into an emergency at any moment, even in a low risk patient.   In any given day, L & D will have a woman hemorrhage after delivery.  In the next room, the newly delivered baby may not be breathing. 2 doors down a patient just had a seizure and dangerously high blood pressures as her preeclampsia progressed to Eclampsia.  Down the hall a shoulder dystocia occurred.  This happens when the baby’s head emerges but the shoulders are too wide to deliver and asphyxia of the infant makes seconds feel like hours until skillful maneuvers can safely deliver the baby.  I mention these scary but common scenarios because the best thing about having a baby in the hospital is that you are surrounded by scores of people that are trained to handle these exact situations and do so every single day.