Issues and opportunities arise for the 55+ ophthalmologist

The final third of an ophthalmic career can be the sweetest, but there are important practical matters to consider.

John B. Pinto

The secret of staying young is to live honestly, eat slowly, and lie about your age.
– Lucille Ball

Men, like peaches and pears, grow sweet a little while before they begin to decay.
– Oliver Wendell Holmes Sr.

Nobody grows old merely by living a number of years. We grow old by deserting our ideals. Years may wrinkle the skin, but to give up enthusiasm wrinkles the soul.
– Samuel Ullman

The typical ophthalmic career stretches from the early 30s to somewhere in the mid to late 60s, although an increasing number of eye surgeons now press happily on into their 70s. Two-thirds of the way through that career, more or less at about age 55, is a classic personal turning point.

By age 55, most eye surgeons start thinking about how few years are left. Some think anxiously about the end of a role: “Whatever will I become when I am no longer defined by what I do?” Many, especially in the current environment, are brought up short by how few years are left to finish saving for retirement. It is hard to closely define “enough” in a world where the goalposts keep moving.

Two-thirds of the way through a professional career — and even farther along in life — most surgeons have raised a family, won and lost a bundle on the market, and buried close friends. They have skirted most of life’s worse mistakes and survived the rest of them. They have acquiesced to the certainty that they will not play in Wimbledon, will not drive at Le Mans and will no longer be noticed by younger people when they walk into any room other than an operatory. (And even that is not destined to last much longer.)

But for the most fortunate surgeons, the back third of a career is the sweetest. You have mastered, really nailed, a stunningly complex and valuable professional discipline. You have been smart enough to jump fast on the best clinical trends and are no longer taken in by medical fads. If you own your practice, you have finally figured out how to pick and motivate workers, trim the fat and make payroll every 2 weeks.

The 10 or 15 years beyond 55 can almost be considered an entirely different career, a burst of high competence after a prolonged 20-year fellowship trying to figure out how to get things right.

Beyond all these quixotic issues, there are the practical matters. Business matters. Financial matters. Here are five of the most important ones to consider if you are in this cohort.

1. I feel pretty good now. I still enjoy my work. When am I likely to retire? Should I set a date?

When a 55-year-old surgeon-client says, “I’d like to retire in about 10 years,” that is typically code for “I’m actually going to retire when I’m 69. Or 72. Or later.” Empirically, ophthalmologists are retiring much later than ever before, partly because they are not yet financially prepared, but mostly because they derive so much enjoyment and sense of purpose from their work. As retired surgeon Herve M. Byron, MD, the former editor of this column, has told me many times from his comfortable Upper East Side parlor in the shadow of the Metropolitan Museum of Art, “We should retire the word ‘retirement.’” I agree. Push it back. Push it w-a-a-a-y back if you still love what you do.

2. Am I saving enough for retirement?

In 2005 (ages, it now seems, before the Great Recession), financial adviser Charles Farrell threw out the gross approximation that by age 65 you needed 12 times your annual income to be able to retire and live on 80% of your current wage. At lower wage levels, this may come close to the mark because of Social Security payments. But it is nowhere near the mark for the typical surgeon. An alternate rule of thumb is to assume that you can safely withdraw 4% of your retirement savings per year. To achieve a pre-tax income of $200,000 (an uncomfortably low annual income for many successful surgeons in retirement, but one we will run with here) would require a nest egg of $5 million ($200,000 divided by 4%). This can seem so daunting a hurdle that surgeons either procrastinate saving adequate amounts or give up entirely: “That’s it. I guess I’ll have to work until I die.” The typical 55-year-old surgeon I run into is living on more than $400,000 per year and yet only has about $2 million in retirement savings. Even if such an ophthalmologist is able to double his savings over the next 10 years, he will be forced to live at only about 40% of his prior lifestyle. You have only three key variables to work with when doing retirement math: your savings, your lifestyle and your lifespan. Each of these are freighted with considerable emotion when it is time to make a plan, which is why working with a competent CPA or fee-only planner is essential by the time you reach 55.

3. Will I be able to sell my practice shares when I retire? How much will I be paid?

A generation ago, the all-but-assured answers to these two questions were “yes” and “between 1 year’s profit and 1 year’s collections.” A surgeon with a practice collecting $1 million per year and generating $400,000 in profit could be assured of at least a $400,000 buyout check, sometimes a lot more. Not so today. The same $1 million practice may only command $200,000 for tangibles, if that. If you are 55 today and making retirement plans, forecast on the conservative side that you will not be able to find a buyer and will get nothing more than salvage value for your equipment. You will likely do better, but do not bet how you get to live in your retirement on it.

4. What about my practice building? I always thought I would use that as my main retirement fund.

Depending on your location, this could have a very mixed outcome. For the past 30 years residential and commercial property values have moved in relative lockstep. While residential property is likely to be soft for some time, some analysts predict a relative recovery in the commercial property sector. Where will this all stand in 10 or 15 years when you retire? It is impossible to predict. The general economy could continue to slowly expand and elevate the value of your facility. On the downside, even modest cuts in health care reimbursements could cause medical real estate to tank. If your personal financial preparation for retirement is tenuous and all of your bets are riding on one asset class, it may be appropriate to hedge. If you are part of a group practice and are the sole owner of your facility, take some money off the table and allow your colleagues to buy in. If you believe that market values will stagnate or fall or that you may not be able to pass your practice on to the next generation, it could be best to sell your facility and lease it back from the buyer for the last few years of your professional life.

5. Collections per visit are flat. Practice costs are rising. The only way to maintain my income is to work harder, but I do not have the energy I once enjoyed. What should I do?

My serious answer is “hit the gym.” Here is the prescription: Get out at least 3 days per week for not less than 1 hour per visit. Thirty minutes on your favorite aerobic machine: treadmill, elliptical, rower, etc. — they are all equally horrible. Another 30 minutes of strength training on your gym’s circuit machines. Also horrible. Listen to music, watch the gym’s TVs or download books to avoid boredom. This is not entertainment; it is medicine to assure business success if you are 55 or older. Your gym visits will also break up your current routine, give you new social contacts, boost your marriage if you work out with your spouse and help elevate any midlife moodiness. Do this for 10 straight weeks. If you have not been a gym rat in the past, you will experience as much as a doubling of your in-office endurance. Then expand your clinic template by 10 or more patients a day. You will give yourself a $250,000 pay raise and a profound sense of control over both your physical and fiscal destiny.

Summary

As a physician, you know firsthand that life consists of just five stages: birth, growth, maturity, senescence and death. The dividing line separating the rewards of maturity from the dread of senescence commences at about 55. This line can be pushed back deeply into your 60s and beyond. With foresight, the wisest ophthalmologists actually run the clock backward. With foresight and the kind of useful fear that energizes action, so can you.

• John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. He is the author of John Pinto’s Little Green Book of Ophthalmology; Turnaround: 21 Weeks to Ophthalmic Practice Survival and Permanent Improvement; Cash Flow: The Practical Art of Earning More From Your Ophthalmology Practice; The Efficient Ophthalmologist: How to See More Patients, Provide Better Care and Prosper in an Era of Falling Fees; The Women of Ophthalmology; and his new book, Legal Issues in Ophthalmology: A Review for Surgeons and Administrators. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.

Ophthalmic transitions in later life

by Craig N. Piso, PhD

Craig N. Piso

Certainly applicable to ophthalmologists who are 55+ years old, here is what some great thinkers have said about working and developing to our fullest potential, especially as we approach our later life stages:

It’s incredibly easy to get caught up in an activity trap, in the business of life, to work harder and harder at climbing the ladder of success only to discover it’s leaning against the wrong wall. – Stephen R. Covey

I think the person who takes a job in order to live — that is to say, for the money — has turned himself into a slave. – Joseph Campbell

No sooner do we think we have assembled a comfortable life than we find a piece of ourselves that has no place to fit in. – Gail Sheehy

What a man can be, he must be. This need we call self-actualization. – Abraham Maslow

The good life is a process, not a state of being. It is a direction not a destination. – Carl Rogers

Ever more people today have the means to live, but no meaning to live for. – Viktor E. Frankl

Even death is not to be feared by one who has lived wisely. – Gautama Buddha

As far as service goes, it can take the form of a million things. To do service, you don’t have to be a doctor working in the slums for free, or become a social worker. Your position in life and what you do doesn’t matter as much as how you do what you do. – Elisabeth Kübler-Ross

Let us live so that when we come to die even the undertaker will be sorry. – Mark Twain

As ophthalmologists enter their mid to late 50s and consider retirement options for their not-too-distant future, usually having amassed significant material wealth by then, new challenges emerge apart from those of practice management and succession planning. Specifically, the developmental challenges of personal growth and fulfillment tend to creep into consciousness with greater intensity at this time; thus, midlife crises are not uncommon.

In his recent book, The Shift, Wayne Dyer suggests that the “afternoon of life” differs from the “morning” in that we experience the compelling drive (ie, “future pull”) to discover the unique purpose of our lives. It is a shift “from ambition to meaning” through which we can enjoy lasting fulfillment and joy. As Joseph Campbell said, “The big question is whether you are going to be able to say a hearty yes to your adventure.”

• Craig N. Piso, PhD, is president of Piso and Associates, LLC, an organizational development and psychological services consulting firm based in Northeastern Pennsylvania. A consultant/psychologist with 30 years of corporate executive and clinical practice experience, Craig is the author of a new book, Dream of Life … Live Your Dream – A Manual of Skills for Living for Today’s Young Adults. He can be reached at 570-239-3114; email: cpiso@pisoandassociates.com; website: www.pisoandassociates.com.