Let’s first talk about why I won’t retire at 38, even though I can.
- That’s less than 3 years out of fellowship. It would be the beginning of my professional prime as a radiologist. I’d like to use my skills and knowledge from 26 years of schooling to serve others. I get a wonderful sense of fulfillment from draining a patient’s pelvic abscess today; I will also relish saving someone’s life by making a imaging diagnosis in 7 years.
- I want to care for others beyond myself and my daughter (Mini Wise Money.) These people include my parents, MWM’s paternal grandparents, some of my extended family, & my sponsor child Mariela.
- I want to provide for MWM more than I have been blessed with growing up. While I worked 7 jobs in college trying to send meager money home to help my parents with their 30% interest rate credit card debts, I’d like MWM to have at least 1 but no more than 2 jobs in while going to school full time.
- I’d like to keep blogging. Blogging costs money and a lot of time. I plan to support my blog because helping others succeed financially & personally is rewarding to me.
- I’d like to give more. I sponsor one child now. I’d like to sponsor more. I may even adopt a child one day, so that Mini is not so lonesome when I’m in heaven one day.
3 things to help you achieve financial independence/ability to retire sooner includes:
- Lower the cost of your debt by refinancing.
- Mindful financial practice.
- Make your money work for you.
Now, let’s see how I CAN retire at 38.
I first started my calculations with my current post tax annual income of $52,671 and annual savings of $29300. My annual savings rate is 56%, which gives me financial independence (ability to retire) in 13 years.
Savings include 23.5k in Roth IRA & Roth 403b, as well as 1k in taxable investment & 4.8k in home equity. Note that my home equity does not exactly grow at 5% ROI (return of investment) but I have 5k of additional savings that will make the 4.8k in home equity a bonus even if it’s getting negative ROI (home value drops rather than grows.)
This does not account for the fact that in July 2020, I will get a pretty big raise from PGY to attending-hood.
Accounting for the transition into attending-hood:
My calculations with the jump in salary when finishing fellowship here:
My attending post tax annual income $160,857 (based on an ultra-conservative estimate of 250k annual income, when most rads I know are getting 300k to start at academic/VA jobs) and annual savings $137,486.
My annual savings rate is 86%, which gives me financial independence (ability to retire) in 2.8 years of finishing fellowship (8.8 years from finishing medical school.)
- My employee job will pay $250k/year pre-tax. (I presume a contractor job will actually allow me to save more as business deductions are numerous and liberal.)
- I will continue to live like I do now after becoming an attending. Like I said before, I’m blessed to be born an materially low-maintenance girl. I get free haircuts from Mini; free clothes from friends and families who can’t stand my monotonous wardrobe (7 pairs of scrubs) and need more space in their own.
- With the same expenses, I’d save the rest of my post-tax dollars, so annual savings of $137,486.
I find it extremely liberating to learn that
at 38, just 7 years from now, by year 2023,
I will work because I love to,
not because I have to.
Financial independence does not mean that I will drop all that I love and care for today to travel the world or become a full time gardener. It simply signifies that
my motive for working & not retiring will be
more profound than monetary necessity.
Final fun morsel to chew on:
If I live as I do now (PGY2, with 22 years of schooling) but I choose plumbing instead of doctoring, I would have reached FI (financial independence) at 31. I would have also had more personal, family, and party time even before retiring at the tender age of 31.
financial independence is not an end in itself;
it is a means to fully enjoy one’s life,
professionally and personally,
more than otherwise.
- How many years before you reach FI?
- I will continue to live, work, love the way I do today when I reach FI. Would you do anything different?
- Are there things you’d like to change today that may impact your time or path to FI?
Share your insights, experiences, and questions below!