Your Money: I Retired Early. And So Can You.

What would make a 56-year-old hand surgeon leave a successful practice after 25 years to pursue an entirely new career? You might think I was frustrated with managed care or increased malpractice liability. In fact, the real answer is much different, and has very practical implications for all physicians.

When I first met with a financial adviser at age 33, I was concerned mainly with building my practice, enjoying my family, and maximizing the use of my free time. I sought help because I realized that as a tempting target of creditors and potential legal claimants, I would need protection. In addition, it was obvious that educating my children would be very expensive. And my wife really deserved to build her dream home.

In 1983, most advisers were stockbrokers or insurance agents - with products to sell and commissions to earn - or were attorneys or accountants whose focus of expertise was narrow. The concept of a fee-only adviser - someone who did not sell products or draft documents - made sense to me. I wanted someone whose interests would be aligned with mine, and from whom I would receive advice unbiased by obscure agendas.

Just like medicine

My adviser’s approach was also consistent with my medical training: Gather information, formulate an impression, develop an action plan, and closely monitor the results.

So when my adviser asked, in our first meeting, when I wanted to retire, I told him, perhaps naively, 55. Through regular meetings over the course of the next six months, we developed that action plan, which included income tax and estate planning, asset protection strategies, and a savings program. He recommended investments based on sound financial research. The numbers were crunched and, voila, based on some reasonable assumptions, the projections showed that retiring at 55 was not farfetched.

Life brings changes, and throughout the years, the assumptions in our plan were revised several times. But at age 56, the reports showed that we were positioned where we wanted to be to maintain our lifestyle. So I retired.

Why was my plan successful?

• It required discipline to invest with specific goals in mind so that I could approach retirement free of debt and knowing my kids’ college tuition was paid for.

• It maximized one of the great tax benefits the government gives us - tax-deferred growth of retirement savings - but taught me why saving in other types of accounts is also important from an income-tax and estate perspective.

• It emphasized controlling expenses and taxes, allowing me to keep more of the return the markets generated.

• It allowed me to concentrate on what mattered - raising a family and growing a practice.

What are the key lessons here for other physicians?

• Develop a plan. Begin early, monitor it often, and stick with the fundamentals. Think diagnosis, treatment, and follow-up.

• Pick the right adviser. You need someone whose interests are aligned with yours. Avoid commissioned sales, referral fees, and proprietary products. Think informed consent.

• Get a professional manager. While you must remain the key player in developing, executing, and monitoring your financial plan, make sure you partner with someone whose expertise allows the coordination of all your professionals. Think primary care doc with a team of other specialists.

• Learn the fundamentals of a sound, academically based investment program. Seek consistency, avoid emotional decisions, control costs, and diversify. Think evidence-based medicine.

• Learn what you don’t know and where to get help. Think consultants and CME.

So what do I do in my retirement? I joined the firm that advised me for 22 years as an adviser in my own right. In many ways, I’m doing the same things I did as a physician - solving problems and giving advice - only with different tools.

Robert E. Tucker, MD, MBA, is vice president of Plancorp, a fee-only financial advisory firm based in St. Louis, where he spent 25 years as a practicing hand surgeon. He spent the last 10 years of his medical career as the medical director of his orthopedic group, and he founded a regional independent physicians association of orthopedists. He can be reached at 636 532 7824 or via editor@physicianspractice.com.

This article originally appeared in the September 2007 issue of Physicians Practice.