The Struggle with the Retirement Transition

Physician's Money Digest, June 2007, Volume 14, Issue 6

I asked a doctor what was holdinghim back from retirement. I knewthat he wanted to do it; he oftentalked about his yearning. I knew thathe could afford it; he has long beencompulsively saving, and his kids arealready out of college. His response tomy question was that he couldn'timagine the leap from his habitualaccumulation mode to a distributionmentality—"I just can't face eating myseed corn."

Breaking Old Habits

I reminded him that the wholepoint of his lifelong discipline was infact to have seed corn to eat when thetime came. But his experience showsthat it is one thing to deal with a financialchange on paper and another toactually live that change in yourlifestyle. "Who knew? Nobody evertalks about this part," he said.

Another aspect of the problem isthat estimates are that less than onehalf of doctors retire in an anticipatedtime and manner. Health issues andfinancial surprises, largely bad butsometimes good, play the majority ofroles in the timing of retirement and inwhether it will be partial or a completebreak. Sometimes smaller but keyevents, such as "my grandchildrenwere moving away" or "my officemanager/nurse/‘right arm'is retiring," turn out to be pivotal in your decisionmakingprocess.

Sometimes the decision turns out tobe subconscious. A surgeon next doorto me called his office one day and toldhis receptionist to cancel him out. "Areyou sick?" she asked. "No, I quit," hereplied. I told him that of all the doctorsI knew, he was the one I thoughtthey would have to pry the scalpel outof his cold, dead hand. He then volunteeredthat this was how his dad quit,and it never occurred to him to do itany other way.

For the Planners

One idea that might be helpful forthose of us who are less impulsive, is tosit back and daydream about what atypical day in retirement might looklike and feel like. And talking ahead oftime with your financial advisor aboutthe nuts and bolts of a withdrawal programcan really help set your mind atease. In my experience, I even found itreassuring that my financial advisorjust kept a straight face after I deliveredmy version of how things might work.

For those of you approaching retirementdecision time, I hope this helpsput things in perspective a bit. Foryounger doctors in midcareer or justgetting started, it's never too soon tostart thinking about how a retirementexit strategy might work. I learned thatfrom some venture capital folks here inSilicon Valley—never go into a dealwithout knowing exactly when andhow you can get out.