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Too often, physician retirement planning over-emphasizes finances to the exclusion of purpose and health. What’s your equation for a meaningful retirement?

The vast majority of information about retirement consists of financial planning for your retirement years. While finessing your nest egg is a part of retirement there are two other factors that are just as important: your purpose and your health. I have created a simple formula that takes brings these elements together. R=F/pH x P 

The three things that everyone must consider before retirement are Financials (F), poor Health (pH), and Purpose (P). If you concentrate solely on finances and ignore the rest of the equation, you will have difficulty planning for retirement and you’ll have problems once you do retire.  The size of your retirement (R) goes up with good F, down with pH, and goes up with a higher P. The three variables also interact with each other.  Too much time spent on one can adversely impact another.

Don’t Wait for Retirement to Find the Right Fit

Before we get started on the formula I want to put one thing on the table. I have heard too many EPs say that they will quit emergency medicine as soon as they have enough money. If you don’t like what you do, don’t wait until retirement to rectify the situation. Figure out a plan to do something else. Anyone who is reasonably good at emergency medicine has an enormous set of skills that can be transferred to an almost infinite range of other occupations. You have people skills, crisis management skills, analysis skills, stress tolerance, and learning skills. You can work in medical management, wound care, palliative care (which is what I do part-time), urgent care, occupational medicine, medical/legal work, or be an advisor to a company on medical issues. There is also a vast range of non-medical work you can do with your skill base.  Start a business, pursue a hobby that becomes a business, do civic work, teach, or get involved in a non-profit organization. I have emergency physician friends in each of the above listed occupations.  Your skill set enables you to solve problems daily, which is exactly what today’s business world needs, so there’s no need to feel trapped.

The Purpose of your Post-ED Life

However you decide to spend the remainder of your working years, if you want a satisfying retirement, the next question is to identify the purpose (P) of your next life phase. In the midst of a string of night shifts, you might think that you want your retirement to be a life of leisure, drinking Coronas on the beach. However, knowing how emergency physicians are wired, I have a hard time seeing them retiring to ‘do nothing.’ The time is now to consider what hobbies, civic activities, spiritual interests or other occupational interests give your life meaning and lasting enjoyment. In the same way that you prepared for your career in the ED you must also prepare for this next phase. Over the course of my 35 years in emergency medicine I took six sabbaticals. I took the time to hang out with my family, learn glass blowing, take an outward bound course, go on a couple of month-long trips abroad, and take a spiritual retreat. While these periods cost me financially, I wouldn’t trade them for anything. In fact, I can think of a number of dumb purchases I made over the years which I should have exchanged for another sabbatical. Each sabbatical gave me a fresh perspective on my work, helped me discover activities that I loved, and became a testing ground for my future retirement. I also think I was a better ED doc when I came back to work. In planning for your retirement, I recommend that you consider taking some time to send up a few trial balloons and test the waters of your post-ED life. It will be time well spent.

Accounting for your Health

The poor health (pH) part of the equation is just as important as purpose and finances. While I’m currently blessed with good health, a few years ago I had a health scare which cause me to think much more seriously about this issue. What I thought was the flu changed a couple of days later when I stared at my thumb pad and realized I had an Osler node. My rare case of endocarditis from a routine teeth cleaning certainly got my attention. As I sat in the hospital with the first of a total of 500 million units of penicillin I realized my life clock was ticking. Disease and death come to us all. 

Finances and health can have an inverse relationship. Too often people think that they can only retire when they’ve built a massive financial safety net, and they work to this end by sacrificing their strongest, healthiest years. In the end, the pursuit of the ideal financial retirement could literally leave you too unhealthy to enjoy retirement at all. Ever worse, the dogged pursuit of financial freedom can wear you down prematurely, robbing you of healthy years. There needs to be a balance between health and finances, and between the present and the future.

Retirement tends to have three phases.  The first is when you have relatively good health, next comes OK health, and the third phase is declining health. Don’t give away your best, healthiest years in pursuit of the fantasy of the financially perfect retirement. Too many men and women have slaved away, building up their retirement fortune, only to rapidly decline in health the moment they retire.

Preparing your Finances

The financial (F) piece of this equation has been written about in this publication many times, and must be ruled by common sense.  If you are a good ED doc you have a well-deserved income stream.  Keep your expenses far below your income, maximize every retirement savings tool, and diversify your investments.  The result should be a more than reasonable retirement. Even if your F does not fully fund your retirement it can be used as a stable financial base for a part-time career in something else. I chose to transition into a much less taxing, and very rewarding, second career as a part-time palliative care physician. My financial base from 35 years as an emergency physician more than prepared me for this move, and I’ve never looked back.

Keep your financial goals realistic. The idea that you can somehow accumulate enough assets to cover every contingency is crazy. What if we have another Great Depression? What if we have hyperinflation like they have in Zimbabwe? What if my wife needs some kind of experimental cancer treatment that costs $100,000 per pill? Financial planning is not about the absolute worst case situation, the one in 500,000 case, it is about  making reasonable projections. Learning to cope with uncertainty is the central lesson of emergency medicine.  If you can learn to adapt to uncertain medical situations and still function then you can learn to cope with some degree of financial uncertainty. Trust me: you can retire without a perfect balance sheet.

Keeping Things in Balance

Getting back to the formula, think of it as three legs of a stool. Too much focus on one leg can force you to neglect the others. I just talked to a man who has more than $800,000 in cash, virtually no debt, and a considerable investment portfolio.  He also recently had his aortic valve replaced, and at age 70 just ended his career. He has a number of potential hobbies, but he’s never tested them. He has money (though he’s still afraid it’s not enough) but cannot figure out his purpose and his health is a major concern.

Clearly, a balance is necessary. Too much time pursuing financial security can cause you to neglect your health. Pursuing your nest egg at the expense of your purpose will leave you bored and idle. On the flip side if you delay taking financial responsibility for your retirement, you may trap yourself into such a grueling schedule that you have no time for either your mental or physical health. There are plenty of doctors who graduate from their residency, buy the big toys, constantly work overtime, and then wonder why after five years they feel trapped and burned out.

In the end, it’s simple. Keep your expenses under control, figure out how to have a few sabbaticals over the years, and retire or cut back before your health becomes a problem. It can be done, but you need to start planning now. What do you want your life to look like when you walk out of the ED for the last time?

Dr. Rogers practiced full time emergency medicine for 35 years before transitioning into a retirement that included part-time palliative/hospice medicine.

 

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