Why doctors need a retirement plan before starting their practice


Medicine as a career still stands as one of the most rewarding and prestigious careers in the U.S. and worldwide.  As the practice of medicine evolves with an evergrowing body of knowledge, regulations and legal issues,  physicians must become more aware of the fact that practicing medicine involves more than taking care of patients.   This comes on top of the rigorous requirements to not only get into medical school but also all the training required to be eligible for medical licensure and board certification.  Since this requires a massive time investment during the youngest and most productive years of life, physicians must plan their lives with the end in mind.   The average physician retires at 66 but many of them work far beyond this age, but why?   It may be due to the fact that many physicians, around 30%,  have less than a million dollars in retirement savings or lack of any good planning.  Planning out a medical career after residency will accomplish 4 things:

  1. Ensure adequate income post retirement
  2. Have a target to work towards
  3. Once the target is reached, have career options
  4. Gain leverage in future negotiations with employers

Not planning a medical career will almost always lead to disastrous results.  I know one of many such stories.

The Retirement Pact Story

Two good friends attend medical school in the 80s and developed a great bond and happened to practice together in the same specialty at the same hospital.  They both love medicine, and the community considers them to be some of the very best.  Being young and talented, they grew their practices very quickly and enjoyed much recognition from their peers and received many awards.  At one point early in their careers, they witnessed a much older peer become involved in a very unfortunate case with a poor outcome.  The case went to trial and the physician lost, resulting in a career-ending reward to the patient’s family.   Fearing that the result may have been from the decision-making ability of the clinician, one of the physicians asked they other to make a pact with him.   “If I ever get to the point where you think I have shown signs of slowing down or not performing well then tell me so I can stop practicing.”   He agreed and the pact to quit medicine on a promise began.

Identity complex

Post-retirement makes most physicians cringe, and many fail to plan their exodus, but why?  As physicians age, the identity of being a physician becomes reinforced through a social hierarchy and everyday interactions with the public.  Living the identity of a physician comes with tremendous benefits including high social standing, community respect, high income and the ability to heal which makes them seem somewhat supernatural.  Quitting medicine, therefore, comes at an enormous cost with the loss of these perks and in some cases loss of identity.

The Identity complex drove my decision when I first considered becoming a physician. Before this, I had numerous opportunities to earn money through businesses I had owned and skills that I had learned after college.  I  ran a mechanical contracting company with my father with an income well over $40,000 a year.  I lived in a home built by my great-grandfather which I recently remodeled and purchased my first new car after driving a junker for seven years.  At that point, I felt like I had everything that I would ever need and was growing the business every year.  My life didn’t require anything else.

One phone call changed my life

Then, I received a phone call from a college friend.  He decided to attend Ohio State University Medical School and wanted to share his exciting news with me.  His sister was a Harvard Medical graduate and convinced him to apply to Ohio State to a program called “medical explorers.”  Completing this program successfully with a GPA above 3.5 and an MCAT score above a set floor would guarantee admission into the medical school. He completed the program and was in his first year of medical school.  During this time he decided to reach out to me to help me accomplish the same thing.   At the time, I was not interested in attending medical school, and I had everything that I needed in my life.  Not convinced, he continues to push until he said the following: “You will only get one opportunity in your life to become a physician and if you pass it up someday when you die you will not have the opportunity to have the initials MD on your tombstone.”  I thought this was a bizarre argument but also a very compelling one since no matter what you do in your life, once you become a physician, even in death you will get to carry the title of doctor.   Although his logic was flawed, I knew the weight and prestige a medical doctor would be a life-changing event.  Begrudgingly I left my contractor job to start my medical career.

White Coat Ceremony and Transformation

How often do we wear labels as a result of the work we perform every day?  The indoctrination of the physician happens very early in our careers, and this occurs for a particular reason.   Although medical schools throughout the country have practiced this event for a short period, they do so to prepare the student to convert from a layperson and into a doctor.  The ceremony feels religious with the candles, the precession, the coat and of course the oath of Hippocrates. At the end of the ceremony, many students, after drying their tears, feel transformed.  This powerful experience reminds me of the ceremony Catholics go through to reaffirm their faith with the coming of age called Confirmation.

I attended Sunday mass with my family over the weekend, and we happen to participate in a mass for Catholic Confirmation of local high school children.   The ceremony bears great significance in the Catholic community with  Archbishop, the highest-ranked official of the state,  presiding over the ceremony.  In preparation, each candidate learns specific aspects of the gospel and church doctrine.  After choosing a new name in commemoration of a church saint or hero, and takes the Baptismal Vow, the candidate and their mentor/sponsor walk up to the altar to stand in front of the Archbishop.  There, the Archbishop anoints the candidate with oil of Chrism.  Transformed into a full member of the church community they are challenged to find their true vocation which is always in the service to god.  The experience, the right of passage, the ceremony and pageantry all created to develop a deeper connection to something greater than themselves.

This day in church reminded me of my white coat ceremony and the duty I had felt going through the experience.

Job, Career or Calling

As a profession, the practice of medicine falls into a unique category.  Given the nature of our craft as healers, most physician, if asked, would refer to medicine as a calling.  Employment usually falls into one of three categories: Job, Career or Calling.

A job simply means exchanging labor or time for money where the money is the only end.

A career also exchanges time for money but has intrinsic intellectual challenges that make the work itself rewarding.  An example would be an engineer or artist who both through training and creativity creates something as a result of their efforts.

A calling ties the rewarding aspects of work and the outcome to who you are and money becomes secondary.  You become the work.  A calling, therefore, looks very similar to the vocation of the ordained minister.  Once ordained the minister takes a vow “to model their lives on the life of Jesus- chaste, poor and obedient.”  They become the right arm of the church.

Generational Differences in Medicine

I recently read an article in the Wall Street Journal titled ” A Country Doctor Can’t Forget His 40 Years of House Calls.” The story illustrates how Dr. Kemper, a 98-year-old physician, spent 40 years of his life helping a community and making “house calls” primarily for the reward of helping people.

“Every day, still, when I’m waling around town, people come up to me,” he said.  “They thank me.”  “Thats why God puts a countyr doctor on Earth.”

The relationship he built with his patients did not live under the veil of the health-care industry with its massive regulation, corporatization, and compliance.  Instead, he had a fiduciary and social commitment to his patients which he gladly accepted.  Reading this story and hearing other stories like it from prior generations of physicians helps me gain a better understanding of the calling of the profession and explains why they work so late into their careers.   Strip away the computers, the hospital policies, the thousands of pages of regulations, the ICD 10, the CME, the MOC, the constant fear of litigation; I can see how a medical career can transform into a calling.   Unfortunately over just one or two generations the ability to call medicine a calling begins to fade away.   Just ask the average physician what percentage of their time they dedicate to see and care for patients versus completing necessary compliance and billing work.  I wonder at what point the pendulum shifted to where we spend more time with regulations than with patients?

Setting new records every year

Physicians set new records every year in burnout and suicide.  The numbers are staggering and do not show any sign of slowing down.   I attended the Ohio Society of Anesthesiology with a talk by Dr. Harter on the state of the profession.   He shared some very sobering data breaking it down to specialty and burnout equally impacts everyone.  The good news came when he shared a study showing that Anesthesiologist did not die prematurely due to environmental exposures due to volatile agents and exposure to various chemicals.   As it turns out when a meta-analysis of death rates show Anesthesiologists die at a similar rate to internal medicine physicians(sorry no ref… I will email him)  Oh wait…maybe this isn’t that good of news…

Meaning in Medicine

As I begin to process all this information and look back at my own limited experiences, I am starting to get a clearer picture of what is happening.  Practicing medicine has always been hard work, but it usually carried with it a considerable degree of meaning.   With the industrialization of medicine, that meaning has begun to fray.  I suspect our contemporaries detected this in the late 80s and knew that indoctrinating physicians at the beginning of medical school with the white coat ceremony rather than waiting until they matriculated would help them create a higher bond to the profession, to help them understand or convince them it is a calling.


Merritt Hawkins Survey 2018

I am not sure what percentage of time doctors spent caring for patients as opposed to doing busy work throughout the past 50 years but I suspect it may explain why older baby boomer physicians derived more satisfaction from their work than the current generation.  Update: Merritt Hawkins 2018 survey looks at this. 

Older physicians who practice today were able to climb the ranks in their practices or organizations and at the same time enjoyed the physician-patient relationship.  This term has been coined the “Social Contract” by Paul Star and the implications of breaking this contract have resulted in the aforementioned records on burnout.

With the rise of the corporatization of medicine, the decisions that were once made by physicians now go to non-clinical leaders.  The physician-patient relationship still exists but now has competing interests with the rise of compliance paperwork and production demands.

As a result, the modern physician has less authority, less connection with their patients and have a ton of busy work.

Are physicians becoming assembly line workers?

According to Amy Wrzesniewski, the higher the rank(in their business/organization), the more meaning, and fulfillment a person can derive from their work.  The lower the rank, the more the work looks more like a job.  Depending on where you fall on the spectrum will determine how much satisfaction you can derive from your work.


Physicians used to be at the upper end of the spectrum but now have fallen and look more like factory assembly workers.

If Medicine has somehow fundamentally changed and physicians look more like technicians then should we continue to view the profession as a calling?  In some cases should we even call it a career?   I think we need to ask the army of people who have left medicine to find out.

Police, firefighters, teachers, and military personnel retire early

Most public service professionals only have to work for 25 years and then retire.  Why?  As civil servants, they use collective bargaining to command a handsome pension at the expense of the public sector.

Serving the public, working long and unusual hours and in some cases placing their lives at risk, these professionals understand what the position entails, and deserve the reward of a shorter career.

What about physicians?  They also serve the public, work long unusual hours and often from an occupational hazard perspective, place their lives at risk.  They do make considerably more money than those above, but they also incur massive debt to do so and have to delay investing for almost a decade.  I would argue they would have to make multiples of a salary of the public worker to catch up due to the compounding effect.

So I ask, why do many physicians work until they die?

Many physicians I have known over the years choose not to retire.  They work and work and work telling everyone around them their plans of spending time with grandchildren or traveling the world once they retire.  “Next Year,” they say, always next year.  Next year comes and goes until something happens.  I have seen it more often than I would like and many others work until they are unable due to a disability.  According to industry experts like Dr. Yerington who experienced a career-ending disability, 3 in 10 physicians will become disabled, and there is a 7x greater chance of becoming disabled than dying.   With mounting evidence that physicians live shorter lives than the general population and have increased risk of becoming disabled, why work until the very end?

Why don’t physicians plan their retirement?

Vicki Robin, the author of Your Money or Your life, argues that work should be done that is in alignment with your purpose.   If you spend 8-10 hours a day or in the case of a physician upward of 14+ hours performing meaningful work, like Dr. Kemper, then the work makes sense, and you should continue doing it.  If however, you spend your “life energy” defined as the finite amount of useful time left on this earth not doing things that are in alignment with your values and life mission then we need to break the link between working and making money to “get our lives back.”  If you define practicing medicine as spending quality time fostering relationships with patients and co-workers the super majority of the time, then I would not have a problem referring to the practice of medicine as a calling.  However, the perception by many physicians and data showing the rates of burnout approaching greater than 50% suggests that relationship building has been replaced by blindly staring at computer screens.  Physicians still believe in their calling, but the calling is quickly fading.  We should take Vicki’s advice and start to disconnect work from wages and reclaim your “lost self” and start working on ourselves from the inside-out.   Taking back our sovereignty will give us the courage to set boundaries and choose the way we want to practice medicine.

How to choose a medical Specialty

We plan everything except one of the most important things, our time?

Insurance, estate plans, contingency plans, covering call, vacations, car purchases, home designing.

Retirement should be planned for from the first day of medical school and executed over the next 30 years.  If you start medical school at 21, then you should have the option to be finished by age 51 years.  As physicians age their ability also decreases including their memory, dexterity and decision-making ability.  If you would continue to work for free after you have ultimately become financially independent, then I recommend you continue to practice medicine.   However, if you choose not work for free then now would be the time to find something you love, your true calling.   If, like many physicians, you tremble at the thought of giving everything up, consider trying to go part-time.   At very least, having the option to say no can be a potent lever and you can renegotiate your contract.

When is the best time to quit a career?

Ask Barry Sanders.  Where most elite NFL athletes play until their body gives out or breaks, Barry quit on top.  The entire world criticized him including his teammates, fans, coaches, family, and friends.   He was within 1500 yards of breaking Walter Payton’s rushing record but choose to end his career at age 30 prematurely.  He even had to pay back a signing bonus that cost him millions.  Fourteen years later the news broke out on the NFL concussion scandal leaving hundreds of former players permanently disabled.  Today he enjoys actively participating in the community at large and even has a blog on his website.  He is concussion free but advocates for other players with head injuries.   Barry did not demonstrate recklessness with his decision.  He achieved financial independence, and despite having abilities, he knew he had enough and walked away.

The best time to quit for physicians has been filled recently with controversy.  Recently one of the FIRE movement leaders, Physician on Fire, announced his early retirement publicly.   Retiring at a ripe old age of 45 has its advantages like having another entire lifetime and being young enough to enjoy it.  Perhaps his retiring early borders on the extreme but he put in his time.   Twelve years of education and fifteen years of practice goes beyond the 25 of public service sector workers.

I propose dedicating a maximum of 30 years to medicine, which should place the average doctor at a ripe old age of 51.  Achieving financial independence as a goal with a definitive finish line makes attaining it easy by breaking it down to defined steps.  This process looks no different than going through medical school or residency where each had defined requirements based upon a well-defined set of expectations.   As we reach each milestone, we get one step closer to the finish line.  A well-executed plan looks better than no plan at all.

What about the retirement pact?

Since neither physician had a definitive plan for leaving medicine, they both continued to work for 40+ years until someone got very sick.  Unfortunately, the signs to slow or quit were present and somewhat obvious, at least to everyone except the two friends.   Even if it became apparent to either, I doubt anyone would like to have a frank conversation with a friend telling them they are a shadow of their former self.  Also like most physicians, we don’t know what kind of financial strain, other than a painful divorce, the now disabled physician holds.  The remaining physician, not fully appreciating his lack of insight, continues to practice without any end in sight and will most likely share the same fate as his friend.



Start with the end in mind and think what you want the end of your career to look like.   How much nest egg will you save up?   What kind of impact or legacy would you like to leave?   Do you define your identity through medicine?   How much is enough in terms of time and money? If I have enough to retire after practicing a total of 30 years would I continue practicing medicine or is there another way I can contribute to my community or help an even larger group of people?   These are questions that should be answered early and visited often to make sure you are on the right track.


Good Luck and thanks for reading!  ?


Great News!  I am starting a new Podcast!

I am in the process of recording episode of a new podcast called The Physician Negotiator.   The topics will be around career advice, finance, work-life balance and other tips for medical professionals.   I am collaborating with experts in all the respective fields and will have an emphasis on advice for younger physician and medical students to maximize their careers in medicine.   Stay Tuned as the launch will be some time in November.




9 thoughts on “Why doctors need a retirement plan before starting their practice

  1. Great topic and love the suggestion that we should try and put an expiration date on our medical career the minute we enter medical school. A 30 year medical career given the salaries we make (even accounting for 7-9 of those years being underpaid as a resident or not paid at all) still leaves time to accumulate a vast amount of wealth if you avoid lifestyle inflation.

    I have no problem going out on top like Barry Sanders because as you have mentioned the calling of medicine is slowly fading away and just becoming a burnout inducing job

    1. Totally agree with the vast amount of wealth accumulation. Cory Fawcett teaches this well in his first book The Doctor’s guide. He says to go ahead and increase your spending once you graduate from medicine but cap it at double what you used to make. This way as a highly paid professional you get the best of both worlds, huge savings and comfortable living. Wiping out debt and accumulating a ton of wealth should be easy. Unfortunately, 79% of physicians, get in their own way, myself included at one point. So, you have a very good point and my argument doesn’t hold as much water which is why working 30 years total makes sense even for those who spend triple their resident salary. Doing so then we can easily reverse engineer how much we would need to save and invest. Thanks again for commenting and collaborating! ? DOAT

  2. Wonderful, in-depth article DocOfAllTradez! Enjoyed your origin story in medicine and the philosophy underlying it as much as I enjoyed meeting you and your wife at FinCon! Look forward to the podcast and more in-depth discussion to come.



    1. Thanks for reading my post and commenting. I can’t wait to have these discussions too! I met with my mentor at FinCon and she changed my world. What a wonderful and collaborative community and I am happy it has given us the opportunity to meet. Thank you again for working so hard on your blog, I love reading it, and organizing all the docs at FinCon. As far as the podcast is concerned, my mentor helped me understand how not to limit the scope of my topics. Going forward I am going to have two series published in parallel. The first will target physicians in training and the second will look at mid-career issues. Hopefully, we can collaborate sooner rather than later.



  3. Looking forward to the Physician Negotiator. That sounds awesome.

    The first responders I know actually retired after 20 years. After 20 years in medicine I feel the cumulative load of stress, pressure, and sleep deprivation.

    A resident finishing at 30 or 31 might be very glad to reach financial independence by 50 or 51. I know I’m glad to have less pressure and more options.

    1. My mother and stepdad retired from the VA and had several friends and family who served various roles in public service. They said it depends on who employs the person. Most cities had a minimum of 20 years, but many are moving to 25 due to pension restraints. Still, that sounds like an excellent deal from time on the job perspective. Retiring at 43 with a full pension and the ability to work on another is a great deal.

      20 years in medicine should be a blog post all by itself.

      I started med school with the end in mind why not look at the career the same way with well-defined goals?

      Thanks for the comments and when you are ready to podcast, I am your guy!


    2. Thanks for insights. I recently looked at a very nice infographic that showed a physician with a $250K income in comparison to a teacher over a span of a career made less per hour!
      Check it out: https://www.bestmedicaldegrees.com/salary-of-doctors/
      Yes, it may not apply to many physicians but it illustrates a very important point that doctors don’t necessarily have it made financially if you look at the details. Add in addition to that your points about stress, pressure, and loss of sleep. I hope this message gets through to the younger generation before they find themselves in harm’s way. Thanks again for the comments!

  4. I agree that doctors, or anyone really, needs a financial plan early in their caeers, not just a retirement plan . Interesting idea regarding a 30yr medicine “career.” I started med school a few years later, and did 6yrs of training, so 30yrs is about mid-50’s with 20yrs of attending work. The perspective of 20yrs of real work to be FI sounds pretty good, some professions do 40+yrs to get to that point. I’ve been coming to terms with working to mid-50’s anyway. While early FI would be nice, pacing myself with the expectation of 20yrs of work, maybe working less and/or saving less and having time on my side, isn’t so bad either. At the age kids will be out of college and I’ve always been hesitant to retire before then. With modest returns, I calculate that I’d be 30x expenses at that age by just continuing to contribute to my tax-advantaged accounts alone. Medicine is just a job to me, I enjoy it but it’s not my purpose or higher calling. I wouldn’t do it for free, but I also wouldn’t quit at FI mainly due to portfolio risks. I also have no great desire to do anything else with my life except leisure, hobbies and just time with my family.

    1. I am in the same boat as you. I contribute to my tax-deferred accounts and could coast until 65 if I wanted to with plenty of cushion. As I continued to work longer hours with less and less control of my schedule then I started to resent the things I used to love. Once I figured out my FI number and burn rate, I knew that I had the ability to change things. I decided to go part-time but still make enough to max out my accounts and save 15% of gross on top of that. Now I have more control over my schedule, makes less money but it won’t change my growth rate. As a result, I think I can do this for the long term. If I decide I want to work more or less I can negotiate my hours down or locum to go up. For me, I found the key was to control my time better and It made the world of difference. FI equals more options and options are good.

      Thanks for reading and commenting on my post!


Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Posts

Pin It on Pinterest