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If You Know You’re Gonna Be A Doctor For Life – Retirement Planning

I just had a great conversation with my girl, over text. I asked her what she would do if she came into $5 million suddenly, would she continue working in her healthcare field? She said she would, she likes it and though she might work a little less, she would continue doing it.

Interesting. She was born around the same year as myself, 1978, and she is planning on doing her gig for at least another 30 years. This information is very valuable. Let’s nerd out on this a little.

This post is for those of you who like medicine and see yourself practicing it for the next 30+ years. You may not want to die as a patient on a hospital floor or in a nursing home. You would rather die holding a speculum, taking your last breath uncomfortably close to someone’s perineum.

Retirement planning is different for someone who would prefer to get out of medicine ASAP vs someone who doesn’t mind it or dare I say enjoys it.

If you’re a sprinter then you might as well work hard and get it over with quick. For the cross country-ers low and slow makes more sense.

Who will keep more of their money, a doc working 30 years part-time making $100,000 per year or a doc working 10 years making $300,000/yr? Both will gross $3,000,000, yet the lifer will keep more of her/his money.

We have a progressive tax system in the US, meaning that as you make more money you are taxed at higher rates. By spreading your income over a longer period of time you are lowering your taxable income which means not only do you get to keep more of your gross income but you also get to work less.

Lower income has the added benefit of allowing you to qualify for certain deductions and tax credits which you otherwise would lose out on.

At a lower income one could qualify to contribute to a deductible traditional IRA which is worth $5,500 as of this writing, 2016. Student loan interest could also be deducted at the lower income, which is not available to the high income earners.

Federal income taxes aren’t the only taxes that one would save on. State income taxes are progressive as well in quite a few states. Social Security taxes are maxed out after a little over $100k of gross income but medicare keeps going… and as a bonus you pay a little extra if you make over $250k.

It’s tough overcoming the greed factor, though. The math is there. Logic states that working less = keeping more. Yet it’s natural for us to want to push hard, power through the work, make as much as possible.

Fuck, I’ve been trying to transition to part-time work for over a year now and still can’t bring myself to do it. I’ve posted about it, I’ve talked to my financial adviser about it and I’m still working well over 40 hours a week.

A big part of me wants to get out of medicine all together.

Another part would miss it. I enjoy seeing patients and I bet if I couldn’t do it anymore for some odd reason I’d be butt-hurt.

 

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