Is early retirement the goal or an escape from burnout? Explore purpose, flexible work, bridge accounts, healthcare, and portfolio risk.
Episode Summary
Is early retirement truly the goal or does it represent a desire to escape burnout or regain control of your time? In this episode of Scripted Wealth: Money & Meaning for Pharmacists, Tim & Tim examine what pharmacists may really mean when they say they want to retire early. They explore the roles of burnout, purpose, identity, and retirement expectations while considering alternatives such as mini-retirements, part-time work, and career changes. They also discuss the financial realities of retiring early, including bridging the years before traditional retirement accounts become accessible, securing health insurance before Medicare, and protecting a portfolio from sequence-of-returns risk.
What you’ll learn in this episode:
- How burnout can influence the desire to retire early and why addressing its root cause matters.
- How to determine whether you are running toward a meaningful vision or simply away from an unhealthy work situation.
- Why mini-retirements, part-time work, or a career change may offer valuable alternatives.
- How an ideal day, week, and year exercise can bring greater clarity to your retirement vision.
- What early retirement means for brokerage savings, healthcare, taxes, portfolio withdrawals, and managing sequence-of-returns risk.
Mentioned in Today’s Episode
- YFP 079 with Nick Ornella, PharmD: Is It Time to Redefine Retirement?
- “Burnout is hitting pharmacists, too”. Wolters Kluwer. Published February 7, 2024.
- YFP Wealth
Episode Transcript
[00:00:00] I just think back, back to that time in my life where, you know, work was hectic and, you know, 99% of, like, my energy and mental bandwidth went there. So then, like, when I, when the weekend did come, if I wasn’t working, when the weekend did come, I was like a ghost of myself. And basically, like, it took me the weekend to recover to then go back and do it again.
If you’re in that head space, you’re not doing any deep reflection, right? Your head is in the weeds, and it’s a, it’s very much a scarcity, like, how do I just make it through this next week? Not, like, a strategic, like, what do I wanna do? So, you know, I, I do think that those breaks, those mini-retirements served me well, and I don’t even know if I was completely com- like, r- prepared from a financial perspective.
Um, you know, it worked out. But, you know, I, I think having that space to get out of the weeds of where you’re at is really [00:01:00] important. It feels like among pharmacists there’s a growing interest in early retirement and financial independence. But I’ve often wondered what people really want is, is it early retirement itself, or is it just the options and the flexibility and the freedom to have something different than maybe the grind of, of the day-to-day, week-to-week job?
So when, when you hear someone say, ‘Hey, Tim, I’d love to retire early,’ as a goal, especially if you’re talking to prospective clients, what, what do you think is going on there? What do you think they’re actually saying? Um, I think burnout could be definitely part of this. Um, I was reading a, an article, I think it was, uh, from, like, Wolters Kluwer, um- Mm-hmm
and it basically, I think it was a pharmacist that was kind of talking about the pers- pervasiveness of burnout, you know, in the pharmacy world. It, it affects [00:02:00] about 50% of p- pharmacy professionals, and the drivers here are things like understaffing, um, metric-driven, metric-heavy workloads, um, expanding clinical duties.
Um, and you know, it, it leads to Physical, emotional, and cognitive exhaustion, right? So I definitely think that there is a, a major thread of that that’s driving the conversation. Um, and I think for some, I think it’s just, it’s maybe tied more towards not having, you know, really having more options, not necessarily being tied to a job.
Um, you know, having autonomy over your, your entire day. Um, so I think there’s a few things at play here. Um, but I, I definitely think that burnout can be a, a, a major contributing factor [00:03:00] to why people are looking for the exits from a, for, for retirement sake. Yeah, that’s a topic that has grown, um, for good reason, ha- has grown in discussion in our profession, you know, over the last, feels like since, since COVID in particular.
I think the issues have been going on much, much longer than that, but we’re seeing the national associations and others with really an uptick around committees and groups, and we see state associations lobbying for rules with state boards around, uh, things like work hours and lunch breaks and rules around metrics and, you know, all the things that have happened really in the last five years, although I- it feels like these issues have been brewing for, for much longer than that.
Yeah. Um, but it is worth mentioning here, right? Because a decision like an early retirement can have such a profound implication, not only on our financial plan, but on, on our lives, right? I think for many people, we’ve talked about this on the show, on many people, for many [00:04:00] pharmacists, there, there can be, even in situations of work that are less than ideal, there can be feelings of contribution and a sense of purpose.
And at one point, we’d like to believe that most pharmacists got into the profession because they, you know, enjoyed the work and, and maybe enjoyed some of the patient interactions or patient care or whatever work they’re doing, that they’re having a sense of contribution. And so in early retirement, one, one of the potential challenges could be a gap in that work, and obviously we’ve got to be able to plan for it financially.
And so if burnout is at the center of this issue, are we maybe planning for something without addressing the root cause? Like, is there potentially a different work environment? Or, um, could we take a year off? You know, could we, uh, look at a part-time employment or a shift in, uh, the role that we’re at, even within an organization or at another employer as well?
Yeah, and I, I don’t know if this is the appropriate time, but maybe it is, Tim, to kind of talk a little bit about burnout. And, um, [00:05:00] you know, obviously we’re talking about it in, in the context of retirement, but, you know, we– I think because of some of the things I’ve seen, not just in, like, the pharmacists that we work with, but even in my own career in, in past life, I think that much of the corporate world is we are running a marathon at a sprinter’s pace.
So we, we’ve talked about at YFP to build a sustainable work environment, um, where you feel it’s Monday morning, you feel refreshed, you’re ready to go to work. You’re, “Let’s go,” right? Um, and not the opposite, where it’s like, oh, Sunday night you’re, like, dreading going to work the next day. Like, that’s not a good place to be in.
Um, or you’re elated because it’s Friday and it’s the weekend. Um, you know, the, the, the other side of that, it’s like Friday’s just another day, right? So, you know, I think, you know, we’ve kind of talked about, I feel like a recent theme is, like, the, the pharmacist brain, the pharmacist mindset. [00:06:00] I do think that there are certain aspects of this crisis that, again, I said, you know, 50% of pharmacy professionals, you know, it affects, that is inherent to a pharmacist.
So that might make people upset. But I’ll give you an example of, you know, where, where I s- what I see in a lot of clients is that is their inability to say no to things Right? Um, we’ve talked about it here at YFP. We have an unlimited work, uh, vacation policy. We have flexible hours for the most part. We do sabbaticals, and we still have people that in the past have burnt out.
And we look at that and we’re like, “What the heck?” Like, “Why is this happening? Of, of all places, this shouldn’t happen here.” But I do think it- part of it is the environment, but part of it is the individual. And I would say a lot of pharmacists are made up– We talked about perfection, optimization, um, you know, wanting [00:07:00] to say, say, not wanting to say no to things.
Um, so I do think that there are elements that it’s, it’s not just the work environment that you’re in, it’s, it’s, it’s your makeup. Um, so like I would throw that out there, and again, I might get roasted online or, or wherever for, for this opinion, but I, I believe it because I think, again, you know, we’ve seen it in our, our own, our own space.
Um, when it comes to, when it comes to the retirement thing and the root cause, like, again, like our… If, if we are, if we are burning out in our career, um, and we think that the, the, the, the pathway for us not to feel like that is to, is to stop working, they might not necessarily be wrong, but I also think that there are, there, there’s trou- there could potentially be trouble ahead, um, when we exit the work and now we’re kind of left to our own [00:08:00] devices, right?
And we’ve talked about this before on the podcast where it can lead to, you know- Depression, substance abuse. If we don’t necessarily have a plan, not just from a financial perspective, but, like, how are we spending our time? What are we doing? Yeah. How do we fill that void of purpose and meaning? Um, so I think that’s worthy of a conversation, absolutely.
Yeah. Well, and, and I think this is… You know, it’s all, it’s all interconnected, right? And, and what we’re talking about here a little bit is, are we addressing the, the root cause or not? Are we, are we running to something, or are we running, you know, from something? And I think when it comes to burnout, it clouds our ability to remember the reason we got into doing something in the first place and, and the value that is there in that work, uh, even if it’s in a less than ideal environment, right?
And so, you know, for good reason, [00:09:00] pharmacists that are in, in a burnout situation or that maybe they’re in a toxic work environment or culture, you know, it’s sort of like this all just needs to go away. And so the solution is I need to retire early. A- and that certainly could help with the stress, um, but so could a different work environment, so could a different work situation, so could, you know, maybe altering some of the rhythms of, of life outside of work and, and, and maybe we just need a break.
You know, I’m, I’m thinking back to, um- Yeah … the podcast episode we did with, uh, N- Nick Ornella, who took a year off, uh, working from Walgreens, right? Of all places where you’d think that, hey, I, I can never take a, a year off and still maintain employment, like, he found a way to make it happen, you know? Tim Ferriss talks about this in his concept of mini-retirements, which allows us to get a break and a reset and, and hopefully on some level fall in love with some of the things that we enjoy doing or to reevaluate just some of the ruts that we can get in, you know, w- with life, um, and find what are some of the patterns, what are some of the [00:10:00] things that maybe we need to change, uh, to re-explore some of the hobbies, the, the things that we enjoy, to just get rest and nourishment and all the things.
And of course, we have to have the financial means to be able to take a long period of time off. So I don’t wanna take that for granted. Um, but I think that’s part of Tim Ferriss’s whole concept of mini-retirement is that, you know, we tend to think about Most of us tend to think about retirement in a very traditional timeline, which is I work for 30 or 40 years, and I grind, grind, grind, and then I do nothing for 30 years because that’s what, you know, my parents did.
If assuming we’re afforded the, the opportunity to be healthy, right, for that long in retirement. Or for those that are maybe in the financial independence, retire early, I’m only gonna grind not for 30 or 40, I’m gonna grind for 15, 20, 25, and then I’m gonna retire early. And I think that’s an incomplete picture of, well, what does that look like for the next, right?
What, what does 52 to 90 look like if we’re afforded the opportunity, you know, to live that long? And I think the concept that [00:11:00] Tim Ferriss is bringing forward in mini retirements is the idea that, like, we could test this a little bit along the way to find, like, if I have a month off, if I have two months off, I have three months off, like, well, how am I spending my days?
And are there things of my job that I enjoy that, sure, maybe it’s in a different environment, but there’s aspects of work that I would, I would like to continue to do. I took nine or 10 mo- months off between, like, my career pivot, and part of that was just trying to figure out, like, what the heck I wanted to do and, and give myself the space to do that.
Um, and I think if I didn’t do that and I just, you know, let’s just say I was kind of doing that on the side and then jumped into my next career, I think I just would’ve… And that’s what I’m saying is that, you know, burnout is, it, you know, ’cause I was burnt out. Um, it wasn’t just a, a job problem. It was a me problem.
Um, and I think we’ve talked about in previous episodes, like scarcity mindset versus an abundance mindset. If you feel like you’re under the gun, um, like I, I [00:12:00] just think back, back to that time in my life where, you know, work was hectic and, you know, 99% of all of my time, or not my time, but like my energy and mental bandwidth went there.
So then like when I, when the weekend did come, if I wasn’t working, when the weekend did come, I felt like I wa- like I was like a ghost of myself. And it, so if you are, so, it, it… And basically, like it took me the weekend to recover to then go back and do it again. If you’re in that head space, you’re not doing any deep reflection, right?
You are, you’re in a kind of your head is in the weeds, and it’s a, it’s very much a scarcity, like how do I just make it through this next week? Not like a strategic, like deep thinking, like what do I wanna do? So- You know, I, I do think that those, I mean, th- those breaks, those mini retirements served me well, and I don’t even know if I was completely com- [00:13:00] like, re- prepared from a financial perspective.
Um, you know, it worked out. But, you know, I, I think having that space to get out of the weeds of where you’re at is really important. And again, like, you know, it… I think questioning like, am I… ‘Cause, you know, we, we were talking about, like, if burnout wasn’t a thing, like, if you were, you know, if a lot of pharmacists get into bec- They, they, they become pharmacists ’cause like, right, they’re really good at math and science, but then there’s this, I think this altruistic of like, uh, vision of, like, wanting to help people.
So, like, if you were go- if you were going to a job every day and you were, you know, you were saving the world, and I’m, I’m, I’m being facetious, but you’re, you’re, you’re impacting the lives of maybe an, an, uh, an underserved community, or you’re, you, you figured out a way to really improve the care of s- you know, of someone, um, that hasn’t been able to figure, figure it out for a variety of reasons, like, why, why would you retire from that?
You wouldn’t. You [00:14:00] wouldn’t. You would be like… ‘Cause that dopamine kick would, would power you through. So, um, so I guess what I’m saying, like, I, I do think that this is a two-sided coin. Um, but I, I do think that, you know, we, we talk about living intentionally, planning intentionally. If, if, if you’re not in the right frame of mind or you’re, you’re totally consumed because you’re burnt out, like, you, you, you have to have the ability to step back.
And to go from one burning ship to the next, which might not look like a burning ship but could turn into one because, you know, you haven’t worked on yourself, you know, you’re just, you’re just going down that same rabbit hole, right? So, um, it’s an interesting conversation. Again, like, I, I, I just, I do think it’s, it’s worthy of, of a conversation ’cause it’s not something that we’ve talked about, um, much.
Um, but I think that a lot of, I think a lot of fire movement, and I, I don’t know if this, this is exactly true, but I think a lot of the fire movement stems from this feeling of [00:15:00] like, man, I, I can’t do this for 40 years. Like, I need, I need to grind for 10 or 15 to get my number, and then I’m, I’m out, right?
Um, but I still think that, you know, that, that can help, but I think some reflection of, okay, what, what, where is my culpability in this- Yes … um, is, is worthy of conversation. Yeah, and I think we’re intentionally challenging this wi- with the idea that we, we still might get to the decision for those that have this.
We still might get to the decision- Yeah, of course. Early retirement is the plan, and then let’s plan around it. But what we don’t wanna be doing is for planning for something that may- maybe that isn’t actually the goal of where we want to go, or there’s a lot of iterations, you know, between working full-time and, and retiring completely.
I, I think the other thing I would add to the discussion, Tim, is My sense with the FIRE community, financial independence, retire early, which a lot of pharmacists will use the terminology retire early, and then I’ll ask them, “Hey, how many of you are familiar with the FIRE community?” And it’s pr- pretty small percentage, you know, overall.
Really? That’s surprising. So whether, whether they’re using those terms or not, [00:16:00] I think s- part of that stems from the unrealistic expectations of what retirement will look like based on whatever we have in our mind. You know, that might be informed by family members that are retired, that might be informed by big box bank commercials that portray retirement, right, a certain way.
Um, but I think challenging that assumption, like, is retirement going to look what I think it is going to look like in my mind? Um, and I think parts of that might be yes, like if we have the dollars saved to enjoy the life experiences or the travel or the things that we didn’t have, you know, time or money for while we were working, or maybe spending time volunteering or etcetera.
But again, like we’re, we’re kinda talking on two extremes, right? If somebody’s in a burned-out situation where we can run the risk of throwing it all away and forgetting about the parts of it that maybe we enjoy, or those are getting clouded out by some of the challenges that are in that work environment.
And then the other end being like, “Hey, if I don’t have to work at all,” [00:17:00] like it’s just gonna be euphoria. But is it, right? I, I think that’s the question we need, we need to talk about, and this is where I think some of the life planning comes in that you do with a lot of our, our clients of well, let, let’s actually look at that.
Like, what would a, what would a week look like? A month look like? A year look like? So if you wake up and you’re 53, and you’re no longer working, and you’re no longer developing your skills, and you’re not in that environment where you have, yes, some responsibility that limits your, your flexibility, but also has a sense of contribution, like what are we doing?
How are we spending our time? I’m glad you brought that up ’cause that’s where I was gonna go is like, you know, in, in, in the, um, in the life planning exercises when we, when we go through like a deeper dive of that, one of the, one of the exercises or one of the inspirational works that we assign is called the ideal schedule, and it really looks at the ideal day, the ideal week, and the ideal year.
So the ideal day, you, you know, it starts at- [00:18:00] You know, my template starts at 6:00. I always cross that off and put a 9 instead of a 6 because I don’t think my day w- shouldn’t… My ideal day does not start at 6:00. But you go hour by hour, so at, you know, at, for 9:00 for me, it would be wake up and enjoy coffee, right?
And you go through that, you know, through every, every step of the day or every hour of the day. Um, and then you extrapolate this to the ideal week. And sometimes people, you know, especially like we’re in the stage of life when I do this with them, it’s like, well, it’s this, every day is the same as the ideal day.
But when you’re re- in retirement and it’s like right in your face, like you see a lot more care and detail, um, with like how I’m gonna spend my Monday, how am I gonna spend my Tuesday, you know. Are weekdays different than, than weekends? And then the last kind of major exercise with the ideal schedule is the ideal year, where you’re, okay, where are you spending, you know, June and July?
[00:19:00] Where are you spending the, the holidays? Um, and, and get granular. And you can probably do the same thing, okay, you know, where, you know, if, if the ideal year in December you’re spent, you’re spending it, you know, with your, your daughter and son who live in Columbus, Ohio, let’s do an ideal day for that. And it, and, and it’s sometimes it’s hard for us to like really sit down and, and plan out the day by the minute.
It’s not to say you’re gonna spend every day like that, but this is ideal, like what we would do. And then I think what, what you realize is that An ideal day is not always, like, s- sitting on the beach, you know? Uh, Shay was asking me yesterday, so Sunday was a rare day of, um, like, no swim meets, no swim practice, um, nice weather.
You know, we were just kinda doing some laundry and just some minor things around the house. She’s traveling this early, the part of the week, so she was getting packed and everything like that. And, you know, I was out on our porch [00:20:00] burning a fire, World Cup was on, the kids are in the water, and she’s like, “Hey, what do you d- want to…”
I- I was doing some, um, grilling, so we- we- we grilled on the flat top grill. Um, just really nice weather before s- we had a little bit of rain. But, you know, the kids are playing outside, they’re in the water, and she’s like, “Hey, what do you wanna do for Father’s Day?” And I’m like, “This.” Like, “This is what I wanna do.”
Right here. Right here. Now, but I also know that, like, I couldn’t do that seven days a week, but I, you know, I might do that with the World Cup being on. Like I, you know- Yeah … I- eventually, I w- I need to do some of the other things that are, I’m really passionate about, right? Whether that’s travel, volunteering, um, playing poker with my friends.
What- whatever that looks like, like, uh, that needs to kind of be accounted for. It can’t just be about R&R all the time, even though, like, that’s what I needed, like, that day. I think we needed that. We were running around as a family, you know, things are hectic at work, things like that, right? So, um, I just think it’s [00:21:00] really important to- to- to map that out, and- and the life planning process is really good for that because it forces you to slow down and be like, “Okay, there is 24 hours in a day, and a good chunk of them are sl- are spent sleeping.”
But then if you subtract the job, what are you doing? And I think for a lot of retirees, um, they’re like, “I don’t know.” Like, for my mom, she’s like, “I don’t know how I, how I had time for work.” She’s doing this, she’s doing that, she’s doing… Like, there, so there are different ends of that spectrum. Um, but I just think that that exercise is so important to be able to fill your day with meaning and purpose.
R&R, I think is the- the- the default that we think of as like we’re sitting on a beach, we’re sitting by a pool. You can only do so much of that before you go crazy, right? And, um, you know, I- I think, I think that really kind of stretching what that looks like, and I think for some people they- they realize, [00:22:00] like, “Man, like, those interests that I used to had before work, kids, marriage, like, those have fallen by the wayside and I don’t have a social group or, uh, an infrastructure that is outside of those things.
Like, my identity and role are tied up in that,” and that’s not necessarily healthy or- or good either. Yeah, one of the things I was thinking about that you hit on is you said, you know, if we remove work, right? That’s a huge- Yeah … you know, huge rock in our schedule. What, what else? I was just thinking about our phase of life, too, right?
So, you know, feels like 99% of time, if we put sleep aside for a moment, is tied up in work, kids, and kids’ activities. Well, I’ve, I’ve got four boys that are, you know, 6 to 15 that in a matter of, you know what, seven years, I might not have three of them in the house in, in 10 or 12 years. Like, so that, that looks completely different.
And, and probably so does the work component. You know, we hopefully we’re, we’re building the business in the way that, you know, we were very much grinding in [00:23:00] the first dec- decade. Well, hopefully decade three, it, it, it doesn’t need, right, that type of, you know, level of, of working in. So there’s a risk here of projecting our current life stage and scenario all the way into the future.
You know, and this is the thought that was coming up for me when you were talking about the ideal schedule is, you know, if I’m in a– if I’m listening to this and I’m feeling burned out, maybe somebody’s in a similar stage of life of us where between work and kids and kids’ activities or maybe they’re caring for elderly parents, like all these things, well, those situations will inevitably change.
Let– Life happens, and there will be new challenges, but I, I think it’s safe to say, like, we’re probably in the busiest season of life, like, in this moment now. Yeah. And in that state of mind, we could run a risk of, of thinking, well, like, I wanna retire early and, you know, take out the work equation or take out these other pieces and write R&R seven days a week, which sounds amazing right now, but I know myself well enough that I’d get to day five [00:24:00] and I’m like, “I want some of this, but I cannot.
I am going crazy.” Yeah. “I cannot do this seven days a week.” Um, but Jess and I had a similar aha. You know, you were talking about your, your porch experience for her birthday last week. We went out and did a five-mile walk at the Metro Park. You know, we had some coffee. We were reading for the day, and it’s like, man, this is like– this is a sneak peek into retirement.
Like, this is pretty great. But the other thing I took away from that is, like, none of those things had huge price tags attached to them. I mean, you’re talking about your porch experience, like what is it about? It’s about the experience. It’s about the relationships. It’s about the time. It’s about the memories.
Yeah, you had an investment that you made in the house and so forth that, you know, afforded the opportunity for that experience or the remodel and the work that you did in the house. But these aren’t huge, expensive things. Yeah, sure, there’s gonna be trips. There’s gonna be other things that are gonna carry an expense.
But to your point, the, the relationships, the community, how we’re spending our time, and what’s the balance of that? Because I love that R&R. I love that time with [00:25:00] Jess. I also love, like, working on the business, and I love the, you know, challenges and the opportunities that, that are there. Yeah, h- some headaches too, right?
Those come along the way. Um, so- It’s hard though, because if somebody’s in that moment of like, “I’m burned out, I’m gassed, personally, professionally, you know, I’m kinda done,” like we can project that out and that may not be representative of where we’re gonna be in five years, seven years, 10 years. Yeah, and I, I think the other thing that, you know, I, I think we’ve touched on this before, is like, um, you know, where we’re at right now, you know, the, the busyness of career, of family activities, um, could really mask what, what be- what, what could be a, an atrophy of like a marriage, of a relationship, right?
So we’re, we’re seeing higher levels of divorce, um, [00:26:00] in, in retirement because I think what happens is you’re, all of your focus is there and, and, and the relationship doesn’t necessarily… It needs to be worked on, right? So if you, if we snap our fingers and your four boys are out of my, out of the house, our three kids are out of the house, and it’s just you and Jess, and then we snap your, our fingers and it’s me and Shay and no job, right?
Because I’m retired There’s, there’s been people who are, have, have retired and gotten divorced where it’s just like, you feel like I’m, um, you’re living next to a stranger. Because everything was centered around the family unit and the kids, and there’s nothing wrong with that. But it also, just like, you know, I think what we would, what we would, um, advocate here is not just working on the marriage, but working on those other social or spiritual or whatever that, that it…
You’re not dependent just on your spouse for X, Y, Z. Like, you have your own thing [00:27:00] going. Um, you know, I, I think that’s, that’s really, really important, and it’s just like your career. You could get, you know, you, you, you put your head down and then 10 years you’re like, “Man, where’d the 10 years go?” The, the same could be with your, with your spouse, right?
So i- just like anything, it, it takes work and it takes time and, um, but you’re seeing that in retirement where, you know, these, these things, I don’t wanna say they get stripped away, but, like, right now it’s chaotic and then the kids leave the house and then you retire, and then it’s just you. And if you haven’t worked on yourself or your relationship, you can see that in some of, some of the things that are happening in retirement.
So, you know, having your own thing, you know, I, I know there’s lots of couples that do everything together. Like, that’s, that’s great, but I also think that having your own interests and having your own passions, passion projects are al- also healthy too. Yeah. So, you know, and, and [00:28:00] some of the life planning, you know, we sometimes, like, we have to give permission to have, like, you know, spouses are so connected, and that’s not a…
They’re so connected at the hip or whatever. That’s not a bad thing, but I also think having the space and the time to pursue things that are really important to you that might not be important to your spouse, which, y- you know, at, at the time you might say, like, “Well, if I’m not gonna do it with my spouse, I’m not gonna do it.”
I would, I would challenge that in a, in a life planning session. I’m like, “If you, if you feel strongly about this, and your spouse has to feel confident enough that this is actually a good thing, like they’re not being left out.” Um, so I know this is very, very, like, tangential to financial planning and things like this, but you know, we, we believe that building a life plan that’s supported by the financial plan is really, really important.
And to your point, some of the things that we’re talking about are not major price tags of like, whoa, like- Right … we have to come up with $200,000 to be able to do this. It’s not that at [00:29:00] all. It’s, it goes back to, like, bucketing the time and the, and the energy to pursue those, those passions that maybe fall by the wayside when you’re in the, the hectic bit- hecticness of life, especially where we, we’re at mid-career.
Yeah, and again, to kind of bring us back to, like, the, the conversation and why all this is valuable that we’re, we’re talking around it is not just taking the assumption at face value that I wanna retire at 52, and now we’re off and running with building out a whole financial plan that’s centered around that if that isn’t actually the, the goal, or there’s something else going on that we might wanna make an adjustment, right?
Because it’s gonna ha- we’ll talk in a moment about this, but if that is the plan, which to be clear, if that is the plan and we’ve, we’ve thought about it and it aligns with our goals, so be it. Like, that’s the plan, and we build around it. But it is going to have significant implications on where we save, where we invest, how we do it, our expenses in retirement, the risks on the retirement portfolio.
All [00:30:00] of those things are gonna be very real. How we close insurance gaps until Medicare, right? All, all the things that we need to think about. So let’s just think about it, and r-remember that there’s a lot of things in between full-time work and retirement. You know, could we do part-time work? I think it’s one of the greatest opportunities pharmacists have afforded to them.
There’s not many professions where you can pick up and work at $65, $70 an hour and find part-time work. Now, it may not be the ideal work that you always wanna do, but could we, could we teach? Could we do consulting? Could we do part-time work? Could we flex it at 10 or 15 or 20 hours? You know, I think the other thing I wanna say, which maybe I’ll regret saying and edit this out later, like, but if we’re talking about burnout in pharmacy, I think we have to even broaden that out further.
So one of the things I like to challenge people with is if they’re, if they’re really struggling with burnout in their job, like, what are the skills, what are the interests that you have, and could this be translated to a different role, either within your employer or another organization, [00:31:00] still leveraging your pharmacist expertise and license?
But there’s still yet another option short of retirement that is the option that I’m hesitating to suggest is, like, is it maybe even something outside of pharmacy? Like, i- is it, is it work altogether that’s the issue, right? Or is it the specific role or the job or the function? Or maybe people are listening, they, they woke up and they’re 20, 25 years in, they’re like, “Hey, if I’d do it all over again, maybe I wouldn’t go become a pharmacist ’cause I have these other interests and other attributes.”
But because of identity, we’ve talked about this before on the show, because of some of the golden handcuffs and other things, you know, they’ve, they’ve stayed in that role, stayed in that job, stayed within the profession But, like, who says you have to? Like, you know, y- you, you could decide mid-career or later that you wanna explore other interests.
And it might not mean early retirement, but it might mean that you go pursue other interests that are even outside the profession. Yeah, and I, I think, [00:32:00] I think for all the reasons we stated, sometimes, you know, we, we talked about, like, the student loans. Sometimes that, you know, um, that pivot is really hard to do because you, you see, you know, a sunk cost in the time and the, and the money and, and all that kinda stuff.
So I, I get it. But, you know, and, and I think, I think we’ve talked about this in the past as well is like, you know, if, if you were to do something like that, there’s nothing stopping y- the… You know, you could do it. You could, you could do some- something completely different, right? Um, you could become a financial planner.
Like, the barrier to entry is a lot lower than to become a pharmacist. So you could say, “Hey, I really wanna pursue this.” And you could fall flat on your face and it just doesn’t work out. You know what you could then, you could then do with some time and perspective is you could go back to being a pharmacist and make $65 or $70- And make a really good income.
Yeah. Yeah. Like, with some more perspective of like what worked or what, or what didn’t work. So, like, I think that’s important is that sometimes we, we put so [00:33:00] much, um… And, and I’m not saying it’s not a big decision. Of course it is. But, you know, I, I often, when I, when I think through some of these things I- I’ll ask the question of like, “What’s the worst possible thing that could go wrong?”
And when I was, I… When I was thinking about launching my own business, I was like, well, the worst possible thing that could go wrong, I think, is for me to completely fail at this and then go- accept a job that I was ex- that I was ex- thinking about accepting when I went to launch my own business. I would just go back to that with a little bit more t- time, experience, perspective.
So yeah, I think, I think to me, all things have to be on the table. And I think sometimes for, for pharmacists, it’s, it’s hard to unwind that, right? Um- Yeah … and, and, and rightfully so. I’m not saying it’s, this is an easy thing to do, but, um, I do think that’s where, again, where plan, reflection on your plan, where you’re at in life.
Like, if you’re m- [00:34:00] if you’re miserable day in and day out because of the hours you’re working or the toxic environment or whatever that is, like, that can, in my opinion, you can’t, you can’t reside in there for years and years. People do. You have to make a change. And sometime, you know, change is scary, right?
That’s, that’s, it’s really hard to do. Um, but I just go back to, like, life is too short. You know, I’ve had these conversations recently, um, with people that I’m close with, like, it’s… Life is too short to be working 70, 80 hours a week- Yeah … in my opinion. Um, so how do we get out of this? Like, what’s the path forward?
And I think sometimes, like, I think about this in my own, my own life is like, if you’re always chasing, like, the next thing, the next promotion, it’s like I have a carrot tied to my, you know, in front of my face that I’m running after and I’m like, I’m like rounding a corner and I’m, I just can never get there.[00:35:00]
And I think if you live your life like that, you know, it, it can be just detrimental to a lot of things Yeah, and I wanna go back to something you said earlier, right? When you mentioned working 70, 80 hours a, a week, we gotta get out. Like, I, I think it’s important to reflect back on the question of how much of that is self-inflicted.
You know, I’ll, I’ll go back to my time at, at my first academic job. You know, you, you come out hungry. I was going through the promotion ranks. Like n- nobody told me I had to work 50 or 60 hours a week. Nobody told me I had to go above and beyond of, you know, doing publications or presentations or whatever.
So, so much of that, that accumulated the fatigue, was self-inflicted, and I think sometimes it might be a job transition that can reset that. Um, because there, there are situations, Tim, where it’s hard to just get out of that environment. If se- someone has… You know, if the employer and your colleagues recognize you to be somebody that’s always gonna say yes, always gonna go above and beyond, you’ve taken on that personality in an organization.
Sometimes that’s [00:36:00] where a job transition can be really helpful. You, you can reset that tone. Now, if those are behaviors that you just can’t shed, right, you’re gonna run into the same situation over and over again. Um, but again, like, is it- does a job transition, does a role change, you know, potentially help, help in this as well?
Let’s assume for the time that we have left, Tim, since I think we’ve beat up the question of like, is early retirement really what we want, le- let’s assume somebody listening has gotten to that point. They decide, “Yeah, I really do wanna retire early because of X, Y, and Z. I’ve thought about it. I wanna have additional flexibility of my time.
Um, I wanna put myself in a financial position to do that.” How, how should someone be thinking about their financial plan quantitatively if early retirement is a goal? So 53 versus traditional retirement age of 65. Like, what are some of the practical implications to the financial plan? Yeah, I mean, there’s, there’s a lot, right?
So obviously we’re looking at a longer time horizon [00:37:00] where a steady paycheck is not coming in the door. You know, again, and I think, I think sometimes even in the FIRE movement, they’ll say like, “Retire early doesn’t necessarily mean you’re not working,” right? Right. You know, I think finding, um, you know, meaningful work, flexible work that brings a paycheck in, maybe even brings in, um, like healthcare, uh, health insurance, uh, you know, ’cause that’s another big thing is, you know, Medicare you don’t necessarily get till you’re in your 60s, so how are we gonna cover…
You know, we know you can, you know, buy insurance on the exchange, but that’s gonna cost an arm and a leg. Um, so, you know, the big, the big thing, you know, the first thing that I think of when I, when I think of early retirement is, you know, how do you bridge the gap between the time that you retire and then 59 and a half, which is the, which is the, the magic age you need to get that you can then start withdrawing IRAs, 401ks, [00:38:00] 403s, et cetera.
So for a lot of pe- Without, without penalty. Without penalty. Yeah. So for a lot of people, and there’s exceptions to that, which you typically don’t wanna go down, um, for a variety of reasons. But, you know, for, so for a lot of people, it is really starting to figure out, okay, if I re- if early retirement for me is, um, 49 and a half, then I need to basically find a way to, um, sustain myself for 10 years until I can get into the, the, the 401, the IRAs.
So often, the best place for that is, like, a brokerage account or, you know, if you’re a different type of FIRE person, it could be real estate. But a brokerage account, you know, you can… It’s an investment account that, um, enjoys, you know, long-term capital gains. Um, so you grow these accounts, and then you can basically take them out whenever.
Um, so for, for a lot of people that are early re- you know, early retiring, y- you know, it’s, it, it’s, it’s a couple phases. It might be some [00:39:00] part-time work, consulting work with a brokerage account that’s sustaining you. It could be real estate investments that are sustaining you. Then you get to 59 and a half, and now the 401, IRA comes into play, so you can start drawing that, down that.
And then probably the third phase would be, um, when you actually, you know, file for Social Security, start claiming for Social Security, which You know, we’ve talked about it in that ad nauseam, a lot of people, I think especially in this, they might default to a younger age, which even, even then I would say maybe not the best, you know, the best strategy.
So that’s kind of the third phase of this. So, you know, that’s a big thing. Obviously, you know, if you have down years in terms of, like, income, how do we get your investments, um, in the most tax-advantaged position whi- while you’re kind of traver- traversing through all of this? Um, the health insurance is the big one.
You know, there’s just, uh, you know, do, do you buy long-term care insurance? Because again, if you’re, if you, if you don’t do that, you’re [00:40:00] self-insuring, and if you’ve already kind of taxed the, the, the traditional portfolio for, because you retire early, is there gonna be dollars le- you know, set aside for that?
There’s just so many things here that I think are at play that, you know, it’s, it, it’s different than a traditional kind of path, but it’s not, like, overwhelmingly different where it’s like a, a bird of another feather. It’s just there’s things that you have to really think about that, that r- can really optimize your ability to sustain yourself, not for a traditional maybe 30 years, but it could be 50 years, you know, 40 years.
Um, and I think those are the things that pop into my head as, as we think through this. The other one that I think we gotta talk about, Tim, in that list is just the reality of, of sequence of returns risk when we retire earlier, right? Yeah. So we’re just exposing, and, and it’s not meant to scare, scare people, just the reality of, you know, if we’re in retirement years longer and we’re not working, [00:41:00] we just have a higher likelihood of that happening, right?
Um, so just, just briefly explain that to our listeners that haven’t heard us talk about that before. Yeah. So sequence, sequence risk is basi- And this is where you typically see the highest failure of retirement plans, um, is essentially when y- when you start drawing down your retirement assets and the market, you know, has a significant blip.
So like, uh, you know, during COVID or the dotcom or the subprime mortgage crisis. You know, the example that I give is, you know, you have a million dollars in your retirement portfolio, and all of a sudden the market dips 30%, and now you have $700,000 in your retirement portfolio, and then you start drawing 50, 60, $80,000.
The inability for that, those dollars, that 700,000 to recover, um, is [00:42:00] typically what drives failure rates of retirement plans. So, you know, one of the, the constant themes of retirement is flexibility, not just with how you, um, spend down u- the portfolio, but, uh, in terms of like your withdrawal rate and the percentage o- that you’re withdrawing.
Another big thing is the timing of that. So I always tell this, this story of when I got my first job post-military, the person I replaced retired, and this is when the market, this was like the ’08, ’09. Um, so I replaced her. She actually start, she, her, her portfolio had to have taken a huge hit. Then she was withdrawing.
She had to go back to work eventually. Um, so if she would’ve, if she would’ve waited a year or two for that portfolio to, to recover and not spend down, um, she would have b- probably would not have gone to work, ’cause I think by two and a half years, the, the portfolio had completely, when I talked through this, had completely kind of went back to where [00:43:00] it was before it crashed.
So if there’s flexibility there, um, it allows, again, for, for better planning to, and, and, and just you’re, you’re kinda waiting for the market to, to get back to where it is. Um, so sequence risk is a big thing, and if you’re, you’re early retiring, you know, that inability for it to, to, you know, you’re now, now it’s not a 20-year retirement.
We have to make this last for 40 or 50, whatever it is. Um, so it can exasperate that problem, so to speak. Yeah, and mo- mo- most, when you think about that risk, obviously the earlier, the more, the more detrimental, right? Yeah. ‘Cause those dollars aren’t rebounding. And, you know, sometimes people might think, well, the antidote to that is you just shift your investments to be in, in more conservative portfolios so that you don’t take, you don’t take the hits and the volatility of the market.
Well, that’s problematic if you’re shifting to a portfolio that’s too conservative in your early 50s, right? Because we’ve got a long runway, perhaps a longer retirement [00:44:00] runway than you did a work runway, where those assets were accumulating. Yeah, and even in a traditional retirement, you know, where it might be 20 or 30 years, like, a lot of the, a lot of portfolio construction is a lot more equities th- than in days gone by because we have to account for a longer time horizon, just because people are living longer.
Right. So if you then tack on an extra 10, 15, whatever, 20 years because you’re retiring early, it’s a, it’s a… it can become a, a compound and problem, so to speak. So as we wrap up the conversation, you know, I, I think we’ve, we’ve maybe, uh, asked more questions than we’ve answered. Uh, and that’s part, part of the intention.
Uh, you know, it’s really just to challenge some of the assumptions. And again, if you derive at the, the end goal of early retirement, great. Let’s build a plan around it, and, and, uh, plan and implement accordingly. But really asking some of the other questions to challenge that assumption and, and just identify what- what is it that we really want, and what [00:45:00] are we working towards?
And ultimately, as we talk about over and over again on this show, right, the financial plan should be there to support whatever is the vision that we have for living that, that rich life, both today and tomorrow. So Tim, great stuff. Uh, we’ll, we’ll be back at it here in a couple weeks. Thank you so much for listening to this episode of Scripted Wealth: Money and Meaning for Pharmacists.
If you enjoyed the conversation, be sure to subscribe, leave us a rating and review, and share the show with a friend or colleague. It really helps more pharmacists discover the show and join us on the journey toward living a rich life today and tomorrow. And if today’s episode got you thinking about your own financial plan, retirement goals, or what a rich life means for you, we’d love to help.
You can learn more about our fee-only comprehensive financial planning services by visiting yfpwealth.com. And finally, an important reminder that the content in this podcast is provided to you for informational purposes only, and is not intended to provide and should not be relied on for investment or any other advice.
Information of the [00:46:00] podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. For more information, you can visit yfpwealth.com/disclaimer. Thanks so much for listening. Have a great rest of your week.