ISSUE 142, Special Section: Cancer Care

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Non-Financial Retirement Planning for Physicians

When the time comes to think about retirement, many physicians are reluctant to leave their careers behind. Unfortunately, a lot of very smart people do not know what to do with themselves when they retire. This article will not focus upon investments or retirement planning from a financial standpoint, but all physicians are encouraged early in their career to hire a full-time investment counselor who can guide them to developing a retirement fund for the time when they do retire.

Many physicians ease into retirement by finding part-time or volunteer work, while others exit their professions entirely with no significant planning. An interesting concept is determining the time when physicians retire. The American Medical Association has kept statistics for quite some time, and their most recent data as of 20211 are noted below.

12% before age 60
29% between ages 60 and 65
31% between ages 65 and 70
13% between ages 71 and 74
14% after age 75

This author is in that latter segment, as he retired at age 79 in 2020 after serving more than 45 years as a behavioral neurologist and neuropsychiatrist in Lexington.

What is Non-Financial Retirement Planning?

It is the most overlooked part of retirement planning. Unfortunately, when most physicians think about retirement planning, they think of financials, investment portfolios, budgets, and five-year plans. In fact, when the pandemic hit in 2020, Google searches on financial planning were up 400%. Those same people were often surprised to learn that, as the saying goes, many folks spend more time planning a vacation than their retirement. It is wise for a physician to plan on living longer than he or she expects and plan how to spend his or her time. Retirement today can last up to 30 years. Some of us may live well into our 80s or 90s. That time can be as engaging and productive as any other period of our lives.

Many physicians practice into their 80s. On the other hand, often physicians are surprised by the need for retirement due to poor health. Many are aware of the record-breaking growth of the Boomer population, with 10,000 turning age 65 every day. By 2050, estimates are that more people worldwide will be over the age of 60 than under the age of 10. Growth of the 75-and-over population alone may reach 5 million in the next five years in the United States.

On the non-financial retirement planning side, physicians often give little thought to recreating the structure and friendships they lose from work, or to figure out how they will invest those 30 extra years. An empty calendar can drive once-active people to the television, the couch, and an unhealthy sedentary lifestyle with quickly reducing health function and increasing body weight.

In terms of non-financial planning for retirement, happiness can be planned! Below are five keys to a successful retirement transition:

Consider a second career. Many physicians say they want to continue working after retirement, but they just do not know how to do that, and they try to transition into retirement by gradually retiring.
The overriding principle of happiness during retirement is to enjoy life. The best way to enjoy life is to do what one has done as a physician, except this time consider volunteering for a cause you care about. Retired physicians who actively volunteer are able to find areas to use their medical skills, and it helps them meet new, like-minded friends and to stay active and engaged in their retirement.
How will you maintain your health? Both physical and mental wellbeing are essential to fully enjoy your next chapter of life.
Sustain the relationships in your life that have meant the most to you. Your relationships may change, such as through divorce or death. As children and grandchildren move away, consider how retirement may affect your family relationships. Many physicians actually move to geographic areas where they can keep better contact with their children and grandchildren.
What personal legacy will you build? What is the best way to invest your time, talents, and resources? Reaching retirement age gives us the chance to consider this important question. Creating and implementing a personal plan can help frame the answer for each of us. All of us can make an impact.

How Do Non-Financial Factors Affect Retirement Decisions?

Steven Sass is a research economist at the Center for Retirement Research at Boston College. In 2016, he published an article on just this subject.2

Physicians are no different than other full-time non-physician workers in the United States in that those with greater wealth and higher incomes are more likely to retire early. Those less prepared are more likely to remain in the labor force. A recent study reported by Sass notes that “fair” or “poor” health increases the likelihood of retirement by 6.3%. This study thus supports the notion that non-financial job characteristics can have large effects on labor transitions. Not liking work accounts for less than 10% of the very important reasons that persons retire early, except for respondents at ages 68 to 70. Poor health accounts for less than 30%, except for respondents younger than 62 years or older than 70 years. Far more prevalent than these factors pushing workers out of the labor force, and physicians are no different here either, is a desire to do other things or to spend more time with family. This inclination is especially strong during the popular retirement ages of 62 to 67.

The studies reviewed in this research article provide little support for the notion that adverse job characteristics cause physicians to leave medicine. They instead identify the importance of non-financial rewards in keeping some workers in the labor force and pulling others, the majority, into retirement.

Again, the American Medical Association has carefully recorded retirement insights from doctors who have already retired. Amy Farouk, in 2018, published six key physician retirement insights associated with retirement.3

Consider a gradual transition, which can help you “grow into retirement.” Many physicians find this the easiest way to get into retirement, and they suggest not to suddenly stop working. One physician negotiated with his group that allowed him to work 2½ days a week for the last five years in the office before retirement. He had no call or surgery. He noted it had been a very nice transition and fun.
Retire to something, not from medicine. Retired physicians underscored the importance of mapping out meaningful activities that will give the individual a sense of purpose in their retirement years. They found it to be critically important to have a continuing purpose for their life. They noted that one should have a plan, as golf or fishing will not fill every day. If at all possible, volunteer and give back to your community, and stay physically and mentally active. Spend time before retirement assessing personal life goals for this new stage in life and develop a strategy to meet those goals. This is probably the greatest transition most of us will ever experience in our lives.
Commit to enjoying your retirement, from new experiences to old friends. Cultivate several hobbies or non-medical areas of interest. Have a clear focus appropriate to your family, personality, and means. Clarify the things that would make you awaken with enthusiasm and pleasure, then plan on doing them. Value your family and friends. They are essential for a fruitful retirement.
Take care of your health. Do your best to maintain good health. Money will never buy happiness, and certainly not if your health is poor. As noted earlier in this article, plan your finances, and do so in conjunction with an advisor and your spouse or partner. Use evidence-based advice for your financial planning, and avoid emotionally-based manipulations of your investments. Make sure you are comfortable with your financial plan, and get all your affairs in order (e.g., wills, advanced directives, powers of attorney, etc.), then enjoy the experience. Use a professional planner to advise.
Prioritize your spending. Live within your means. Downsize if necessary. Bigger and better is not necessarily the best. Do not perform risky investing in order to increase income. Know that having many material things is not the key to happiness!

Summary:

Enlist the services of a certified financial planner (CFP) early in your career, include your spouse or partner in all decisions.
Focus upon nonfinancial planning at least 5 years before planned retirement. Include your spouse or partner in the planning. Ease into it if you feel the need.
Remember, relationships should be the core of your planning.
Retire to something, not from medicine. 5. Map out activities that give you a sense of purpose.
Cultivate non-medical areas of interest.
Do your best to pursue good health.
Live within your means.

Robert Granacher, MD, can be reached at 859.333.0068 or rgranacher@aol.com.

OTHER READING

1. Seegert, L. I want to retire, but I can’t quite say goodbye. Medscape May 5,2020.

2. F arouk, A. Early retirement? 5 factors physicians should evaluate. January 4, 2019. Practice-management/career-development/early-retirement-5-factors-physicians-should-evaluate. Site accessed February 4, 2022.

3. Clark, Dorie. Planning your post-retirement career. HBR. org, April 28, 2016. Site accessed February 4, 2022.

4. Miller, R.N. Life after medicine: 3 keys to a fulfilling retirement. https://www.ama-assn.org/practice-management/career-development/life-medicine-3-keys-fulfilling-retirement. Sit accessed Feb 4, 2022.

REFERENCES

1
https://www.ama-assn.org/practice-management/career-development/top-considerations-physicians-ahead-retirement. Site accessed February 4, 2022

2Sass, SA. How do non-financial factors affect retirement decisions? Center for Retirement Research at Boston College, February 2016.

3Farouk, A. 2018. Six key physician retirement insights from doctors already there. https://www.ama-assn.org/pratice/management/career/development/six-key-phsyician-retirement-insights-doctors-already-there. Site accessed February 3, 2022.