Planning ahead

Pack your retirement go-bag now

Life happens. Preparing for your retirement sooner rather than later will ensure a smoother transition when the time comes.

Here’s a fun fact: according to the Merriam-Webster Dictionary (you remember dictionaries, right?), the term “go-bag” first appeared in 1991. I had already been in practice for two years then. Some of you weren’t born yet. The aforementioned dictionary defines it as: “a bag packed with survival supplies and kept ready for use in case of an emergency that requires rapid evacuation.”

So how do retiring from medicine and the go-bag intersect, you might ask? What does the end of a long and highly accomplished medical career have to do with a family-size bag of beef jerky, some waterproof matches, a high-powered flashlight and maybe a flare or two?

I’m not much for doomsayers or apocalypse preppers, but I will go to John Lennon here (he was one of the Beatles, if you weren’t born yet in 1991) when he wrote, “Life is what happens to us while we’re busy making other plans.”

Most of us will have retirements that are planned or at least semi-planned. But not all of us. Life will happen to some of us – perhaps suddenly and unexpectedly. This is why one must prepare – sooner rather than later.

If you’re an OMS I, you probably just need to think about it. If you’re a resident or fellow in training, you need to be working on it. If you’re already in practice, you probably need to check said go-bag and make sure none of your essential supplies have gone bad. If you’re comfortably retired – congratulations, but the price of security is continued vigilance.

Life is tricky

Death comes for us all – ask any insurance agent. But life is trickier. Your career, like the Titanic, is unsinkable right up until the moment it isn’t. And the seas ahead are full of potentially career-ending icebergs: illness, injury, natural disasters, poor choices (life and financial), addictions, random bolts from the blue – a regular Litany of Sorrows. And last time I looked, a med school diploma did not come with an Immunity Idol.

So, ask yourself today: If my medical career came to a screeching halt tomorrow, what, exactly, would I do?

Many of us would say, “Well, I’d just find something else.” But having a relatively singular skill and a Himalayan Mountain of debt makes that something else a much more complicated proposition.

By way of disclaimer, none of the letters after my name qualify me to personally advise anyone on matters of finance, insurance or related matters. So, what follows is some of the advice I have been given by individuals who are qualified. Do with it what you will. If you want to gamble on cryptocurrency, day-trading, horse racing, cattle futures, NFTs, etc., as a way to secure your future, that’s up to you. Here’s what I’ve been told:

1. Find and retain a trusted financial advisor.

But wait, you say, I’m an OMS II without any finances to advise. It doesn’t matter. Don’t wait until you graduate, finish your training or are in practice for ten years – get one soon. Preferably one who can advise you on matters such as insurance, taxes, debt repayment and long-term financial security. Physicians have a bad habit of thinking that just because they’ve mastered the Krebs Cycle and the Cranial Nerves, they can master everything else. The banks are not going to ask you for Cyclic AMP.

2. Consider getting a professional disability policy sooner than later.

Yes, it’s an expense, but so are lifeboats and parachutes. What if you fall down the stairs at graduation and can’t work for a year or two? You won’t have a job. You will have the debt.

But be aware that not all disability policies are created equal. If you pay the premiums yourself, the benefits are often tax-exempt; if an employer pays them for you, they’re not. Also, look hard at what qualifies you as disabled. Some policies are “occupation only,” meaning they kick in if you can’t do what you’re specifically trained to do (e.g. neurosurgery, family practice, pediatrics).

But what if something happens early on? Most policies won’t cover you because you wanted to be a neurosurgeon, only if you are one. Again, find an advisor who can help you navigate the choices and who will know when and how to change or expand your coverage as your career progresses.

3. Resist the siren’s song of chronic debt.

Med school and the PGY years are a long, low-paying grind – an investment in a brighter future. Upon entering practice, and upon reaching that point where your federal tax burden is greater than your residency salary can feel liberating.

It’s tempting to “make up” for all those years of sacrifices made by you and your spouse or family. What so often happens is a spending spree once the larger paychecks start arriving. There’s nothing inherently wrong with rewarding your spouse, your kids and yourself for sticking it out on the arduous journey. But physicians can become so used to carrying debt, inured almost, that the blinking caution lights are just ignored.

The tendency is to put off “non-immediate” expenses such as college funds, life insurance and prudent investments and “enjoy life.” You’ve waited so long – and you’re not going to wait any longer. The starter home that starts at $2 million, the sports car whose insurance premium is higher than your intern salary, the willingness of lenders to let you multiply your debt based on you earning potential. Again, a fiscal advisor can bring a little desperately needed objectivity to your situation.

4. Mid-to-late career and Margaret Mitchell.

She wrote the book on which a now decidedly non-PC film about the antebellum South was based. Perhaps its most famous line is uttered by the protagonist Scarlett O’Hara in the final scene: “I’ll think about that tomorrow.” If you haven’t paid attention and planned ahead, you could face the reality of your retirement hopes and dreams being Gone with the Wind.

Retirement planning should begin no later than the day you enter practice. What kind of retirement fund does your practice offer? With more than half of physicians now employed by corporations or health care giants, things can get complicated in a hurry.

Who’s managing your retirement account? Someone you can actually speak to and ask questions? How long do you have to work to be vested? How much does your practice contribute? What happens if you leave in the middle of a fiscal year? Did I mention it’s helpful to have a professional advising you on such things?

5. Financial planning doesn’t stop the day you retire.

If anything, it gets more complex. Now you have to protect what you’ve spent your career earning and (hopefully) saving. Is your retirement fund exposed to stock market shifts and the dreaded “corrections?” If so, you may no longer have the time or the ability to make up the loss.

Which financial instruments offer the most liquidity when it comes time to withdraw? Which ones have the least tax ramifications when you have to start relying on them? How much should you have in readily available cash? You’re asking me? No. Like I said – ask a professional.

It’s never too early

So, fire up your favorite search engine, pick out a nice weatherproof go-bag and start stocking it. It’s never too early. And check on it regularly to see if what’s in there still works and that nothing has passed its expiration date without you noticing. As the saying goes, failing to plan is planning to fail. And you’ve worked too hard to let that happen.

Editor’s note: The views expressed in this article are the author’s own and do not necessarily represent the views of The DO or the AOA.

Related reading:

Medicine as your Second Life: What happens when the game ends?

Retiring from medicine: The best of times or the worst of times?


  1. Phil Desplat, DO

    Hey Dan, always great to read your perspective on things. I am now retired since January 1,2022 and enjoying every minute. Inflation and down stock and bond markets are a bit scary but had that possible scenario built in to my retirement plan. Living on Long Beach Island, NJ , a favorite place of yours. One other thing about retirement it’s important to plan your finances but maybe more important stay both mentally and physically healthy. Physicians have a very stressful work life and need to take time to recharge the batteries. As for me I’m fully charged and ready to go. Getting my bathing suit so I could go boogie boarding to take advantage of low tide. Always great to read your work. Maybe see you on the Island one day.

  2. Joe Stella,DO,MBA

    Thanks Dan for sharing. I recommend all young persons especially docs to read the White Coat Investor (WCI). and his blogs. Plenty of excellent financial advice covering all aspects

  3. Brent Urzi, DO, MS

    Great advice Dr Waters! I’m a mid life career-changer in my early 40s, still finishing residency. Would be interested to hear your perspective or knowledge of colleagues who might have been in the same boat, and how they managed their somewhat shorter interval until retirement. You’ve given good advice for almost anyone on a retirement planning journey.

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