There are a few things that I figured out on my own as I traveled the retirement path. Most things were obvious but I chose to ignore them. Others weren’t as clear-cut and I wish I had discovered them sooner.
10 Hindsight Facts About Retirement
These are the 10 facts that I wish I had realized sooner and acted upon. The purpose wouldn’t be to have more money in my retirement or to have retired earlier. Instead, it would have made the process easier, less foreign, and more feasible.
1. I Could Retire Much Sooner Than 55.
I am not sure if I would have acted on the possibility but knowing that I could retire before age 55 would have been eye-opening. I was so in love with being a doctor that the idea of retirement may have been borderline offensive.
The earliest I ever recall anyone being able to retire was 55. I remember hearing of some people retiring at age 50 but usually because they were couples.
2. I never would have problems filling up my time In Retirement.
One of the problems with medicine is that we are often taught by workaholic attendings. Those who are amazing at what they do are often married to their careers.
This sort of leaves a skewed view of what real life is about. In fact, the real world was so different from what I learned in college, med school, and residency that the adjustment was bewildering.
If professional athletes can retire young, then why can’t healthcare professionals?
3. I would one day be bored with medicine.
This one still blows my mind. I vividly recall 2006-2012… no way in hell did I ever think that my passion for practicing medicine would ever come to an end.
All I heard from the oldtimers is that “you’ll slow down one day”, or “it’s harder as you get older”. I also recall the bitter doctors that I’d encounter quite frequently. But again, they were overshadowed so easily by those attendings whose passion was medicine.
4. saving money in the beginning is painstakingly slow but speeds up rapidly.
I recall looking at my retirement balance right after residency which was $75,000. Then I looked at all of my debt – my student loans, credit cards, auto loan, and mortgage which together added up to $550,000.
Having more debt than retirement savings.
This was such a depressing realization that it completely turned me off from saving further. The value of that $75k was relative… relatively fucking low. Which is why I cashed it out, paid off some credit cards, spent the rest, just to get back into more credit card debt later.
Once I hit $100k it went quite smoothly. $150k was next. Suddenly it was $300k. Then $400k. Then $600k. And before I knew it, $800k.
More importantly, I was contributing less and seeing even more growth. That’s the power of money momentum.
5. I could work as little or as much as I wanted to in retirement.
The option of working in retirement somehow never crossed my mind. I saw the geezer docs coming back and working but they were the institutionalized types. I figured they continued working after retirement because they were bored at home.
I didn’t realize that I could work 10 hours a week. For whatever reason, I thought that no medical group would be okay with me working so little.
Working in retirement often means that you failed to save enough. In my eyes, it’s one of the most understated options available to healthcare professionals.
6. I didn’t need millions in my retirement account.
…You need 25x your spending in your retirement account!
…You need to replace 80% of your pre-retirement income!
…20% of your retirement funds will go towards healthcare!
…The longer you live, the more you’ll need in retirement!
None of these statements are valid.
I was led to believe that I needed over $1 million saved for retirement. The numbers I was given was closer to $5,000,000.
The value of my retirement portfolio has much less to do with my ability to retire than the income I can generate in retirement from various sources.
7. There are many ways to secure a sustainable retirement.
I was under the impression that retiring safely meant that one would need a pension, a massive 401k, an IRA, social security, and medicare. Without these it would be an irresponsible financial move.
A sustainable retirement has much more to do with a mindset and one’s ability to roll with the punches.
Having the creativity to adjust my spending in retirement to suit my ideal lifestyle wasn’t even an option in my mind.
8. investing could be incredibly simple.
I didn’t need to learn options trading or bond laddering. There was no need for a complicated CD ladder or a dividend portfolio.
For the investor who is willing to stay in the market long-term, a single broad passive index fund can satisfy all requirements. There is rarely a need for a very complicated asset allocation.
9. I should have bought my first home with the intention to make it an ideal rental.
The chance that a healthcare professional’s first home would be their final home is damn near impossible. So I should have based my purchase decision on the possibility of turning it into a lucrative income property.
This would be an efficient way to have a liability become an asset.
10. That a job doesn’t equal productivity and it that I shouldn’t let it define me.
Job loyalty is not a strength, it’s a weakness. And identifying with one’s career can harm our ability to progress through life.
To feel productive it’s important to be part of something but instead of looking externally, it would have been better to develop that feeling internally first.