This month marks three years since I turned in my beeper and walked out of the hospital to the song 18 wheels and a dozen roses, by Kathy Mattea. It was a bit scary to give up surgery at age 54, hoping we had enough money saved to meet our needs for the rest of our lives. That was the day I stopped earning money from working and started spending our retirement savings and real estate cash flow. That is not as easy of a transition as it seems.
I left my long time practice three years earlier and started working part time doing locums in critical access hospitals. At that time, I thought I had enough money to retire, but wasn’t quite ready to quit operating. That part time work gave my retirement accounts three more years of growth before I started drawing them down. Here is what has happened since I gave up surgery.
One of my biggest concerns was whether or not I would miss practicing medicine. I did not. I developed a new passion, teaching physicians about personal finance and coaching them through tough times. I have stayed busy enough to not miss my life as a surgeon.
I do, however, miss helping patients with their medical problems now and then, but I’m fulfilling that need by helping physicians become financially successful, which also gives me great satisfaction.
Writing books and a blog, making courses, coaching and speaking keep me busy enough to ward off boredom.
My second biggest fear was having enough money to last until my wife and I die. My wife, the accountant, kept reassuring me we had enough. I could see the numbers, but I was still worried. If we ran out of money in a few years, I could not go back to surgery without being retrained.
It turned out she was right. We have more than enough money. We started taking a 3.9% distribution from my rollover IRA, which came from my 401(k), which was the calculated requirement for the IRS using the substantially equal periodic payments method, also known as rule 72(t). Under this rule I am required to take the same dollar figure each year for five years, at which time I will be sixty. Following these guidelines I will not have to pay any penalties for taking my money out of my retirement plan before I’m 59 ½ years old. After that, I can take out whatever I want until I reach age 72 when my required minimum distribution kicks in.
We already had our real estate investment cash flow from our 4 apartments with 55 total units. You can read all about that in The Doctors Guide to Real Estate Investing for Busy Professionals. We weren’t sure we needed to take any of the money out of the retirement plans to supplement this cash flow, but since we wanted to travel and didn’t know exactly what that would cost, we took it to be sure we had enough to do what we wanted. Turns out the cash flow from our real estate has been enough to fund our retired lifestyle and we really didn’t need to start taking retirement plan withdrawals.
During the three years we have been making those withdrawals, we have seen our net worth increase by 16% and our retirement account value has increased by 13%. We clearly have not gone backwards despite losing my income and living off our retirement accounts.
Our real estate net operating income has gone up 8% in the last three years and its spendable cash flow is up 25%. My real estate cash flow seems to be keeping up with inflation and exceeds our personal expenses.
We wanted to increase our traveling upon my retirement and have been utilizing our motorhome, our timeshare and cruises for the bulk of our adventures. We are away from home about half of the time.
Since I retired from medicine we have crossed the border of more than 2 dozen countries, hiked 450 miles on the Camino de Santiago in Spain, and our longest cruise has been 31 days.
As I am writing this, we are parked in a resort RV park in the desert of South East California enjoying the nice weather, although today I had to turn on the air conditioner as it got too hot. But, for the most part the high has been in the 70s and the days have been sunny. We are on a multi-week trip in the motorhome to get out of the cold weather in Oregon. Next week we will move to Mesa, Arizona for a couple of weeks. Not sure when we will return home.
One concern we all have is getting sued after we retire. I just read a sad story of a doctor who retired and was later sued for malpractice. He ended up dying by suicide before the court case was finished. The states I worked in have 2 and 3 year statute of limitations for filing a medical malpractice claim. I will pass the three year mark this month.
There is still the small chance of a patient not having discovered their injury, in which case they have two years from their discovery, but no more than five years from the date of the injury, before they can no longer file a claim against me. As a surgeon, it is unlikely anyone would not know of their injury in the first month after it occurred. I think I have passed the danger point of getting sued. The absolute ending point of anyone’s ability to sue me will be two years from now when the final patient will pass the five year mark from their surgery.
What is the down side?
There have been two things I noticed during retirement that I did not expect. The first is the need for a schedule.
I had a very regimented life during my medical career. My office staff scheduled my day, so I had places to be at defined times. That kept me going and made me productive.
Now, I rarely have to be anywhere at any given time. Thus, I have a tendency to be much less productive. I find that my life is more productive when I am at a retirement community that has a lot of scheduled activities. Needing to complete the day’s work project before a scheduled activity gets me going and makes me get dressed in the morning.
At home, I often have nothing that I need to do and no place I need to go, so there are entire days I spend in my bathrobe and never do get dressed. That is not rewarding for a type A personality.
The second issue was never being able to catch up on things around the house. I thought once I didn’t have my medical job to do, I could do all those things I had been putting off. I learned that the state of caught up doesn’t exist. Every time I finish one project two more pop up. This is echoed by everyone I meet in the resorts I visit.
Additionally, when you travel 50% of the time, the things that need to be cared for at home fall behind schedule. I checked many household items off my to do list during the November-December window I was home this year to get things caught up around the house/yard. Of course, they didn’t all get finished before we fired up the motorhome to go snow birding. I’m pretty sure they will still be waiting for me when we get home.
I now have grown accustomed to my new life and don’t see ever going back to a regular job that requires me to stay home all the time.
We will continue to travel a lot. Last week we had our first cancelled trip when travel to China was closed down. Our pre-paid trip was not refunded, but they gave us an 18-month rain check. When the Infectious disease issues are over, we will rebook our adventure.
All the travel has made us see the high amount of upkeep our current house requires. So we are designing a new home to be built this summer. It will be smaller and have very little yard to care for. We should be able to walk out the door, lock it, and go adventuring without worrying about our home. No more ponds, waterfalls, fish, gardens, and trees to care for.
I will continue to use my time writing/teaching/coaching/speaking to doctors about personal finance as helping doctors achieve financial success brings joy and purpose to my life. I have already turned in my next book to the editor and it should be out this summer. Then I think another course will be on the docket.
My wife and I have several more travel destinations on our bucket list. We have already booked a summer cruise to Iceland with ten friends and relatives.
If you are contemplating retirement, and it goes anything like mine, it will be better than you anticipate. When you think you have enough money to retire, you probably do. Travel has not cost nearly as much as I thought it would, and the freedom to come and go as you please is very nice. When we left on this motorhome trip, it snowed in the pass the day we were set to leave. Not having reservations anywhere, we just stayed home a few more days and worked on projects at home. It didn’t really matter when we left, we are retired/repurposed, and that flexibility is very nice.
What do you want to do after you retire? If you already retired, what have you learned that you could share with those who are getting ready to make the leap?