Three steps to find your way toward retirement
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“I wanted to have more time to play and reflect, but I find retirement more stressful than having a nice, steady job because I have to make decisions about where I want to be.”
– Walter Cronkite
“Wisdom and penetration are the fruit of experience, not the lessons of retirement and leisure.”
– Abigail Adams
Choosing when and how to enter medical practice is an intimidating process. As it turns out, choosing when and how to leave can be even more daunting.
Given the actuarial bulge of baby boomer eye surgeons, an increasing number of calls are coming in these days from ophthalmologists who are looking for a way out. It is harder than it looks. Here is some of what they tell us:
- “Retirement?! We should retire the word ‘retirement.’”
- “I’m not leaving this place until my administrator retires — then I’m definitely going to quit!”
- “I would be a cataract surgeon even if they cut our fees to $100. It’s too much fun, and the patients are so grateful.”
- “Funny. I’ve been trying for years to figure out what I’d do in retirement. I’m absolutely drawing a blank.”
- “As soon as my financial planner says I’m over my finish line, I’m outta here! Medicine is getting too stressful. Heck, it’s been too stressful for half of my career.”
- “My accountant says I could have retired years ago. I don’t believe him. I guess that’s why I keep on working.”
- “Almost every day now a (retired) patient will ask me, ‘So, when are you retiring, doc?’ Even though I know it’s coming, the question always shocks me. I guess it’s a sign of denial.”
Let’s try to organize your own retirement ponderings as seen through the eyes of these and other colleagues of yours in three basic domains.
First, understand that there are at least two finish lines
Most people put the most effort into just one of these finish lines, the financial one. “Have I saved enough to permanently stop working?” This finish line is objective but not fixed. It floats up and down based on:
- What’s added or subtracted from your retirement bucket list (for example, if you decide you want to take up an expensive hobby after you retire).
- The performance of your investments (one smart or lucky move can shave years off your retirement timeline).
- Your risk tolerance (which appropriately declines as retirement looms).
- The projected needs of your dependents.
Shockingly few surgeons we know enlist the services of an appropriate fee-only financial planner to help them with the calculations and counsel needed to find and reach this economic finish line. Doing so is critical by the time you reach your 40s and urgent anytime later than that. Ask your CPA, attorney and peers for recommended specialists to interview.
An equally important and much more subjective finish line is not about net worth but is captured in the question, “Is my net enjoyment of patient care starting to dip toward an ‘I’m done’ threshold?”
A “yes” answer is not meaningful if it is transient. You should not just say “yes” every once in a while on a tough afternoon, late in the week, but instead feel “I’m really done with this” on most days. Each of us is different. You may not need any more than an inner dialogue to be able to see this finish line clearly. Journaling can be helpful and validate whether your feelings endure or diminish over time. Talking with a colleague, spouse or counselor may help you “feel your feelings” to completion.
Second, understand your options
If you are in a larger group practice, your exit plan is simple and probably already written out in your corporate agreements. These will commonly spell out how much advance notice you have to give, whether you can taper your workloads or have to abruptly retire, and how much you will be paid out for any partnership shares.
Things get rapidly more complex if you are in solo practice or are the sole owner of a group practice. Your succession options are manifold in this case and divide into two categories.
1. Options requiring a lot of advanced planning and your continued work in the practice:
- Find a partner-track associate and transfer the practice to them in a year or two or longer.
- Sell to a private equity company (generally obliging a 3+ year post-transaction commitment).
- Sell to a health system (such divestitures are rare, but they do occur).
- If you have willing associates and a strong manager, continue to own the practice as a business entity, even after you stop providing patient care.
2. Options requiring little advance planning:
- Wind down operations (sell everything at salvage value, distribute your charts to others in the market to eliminate custody hassles).
- Sell to employed associate doctors.
- Sell to another near-lying private practice.
Third, understand the numbers
For the majority of small private practices, the cash-in-hand value of your practice is not all that different between the seven basic options listed above. In formal client settings, the difference rarely amounts to more than 1% of a surgeon’s lifetime earnings — certainly not enough to change your lifestyle in retirement. Accordingly, in many situations, your motivation for choosing one option over the other should not be financial but experiential: choosing the option that you believe you would enjoy the most.
Wrapping up
Don’t go until it is your time. There are lots of reasons that ophthalmologists linger in the profession, some perfectly healthy, some perhaps less so:
- “I enjoy medicine more than anything else I can imagine.”
- “I don’t want to abandon my staff who have served me well over the years.”
- “I identify more than anything else with my role and status as a doctor; I’m not ready to leave that behind.”
- “I have money fears, even if my CPA tells me I’m financially independent now.”
- “Having achieved real mastery in medicine, I really don’t want the struggle of leaving that and trying to master something else.”
Remember that your legacy in medicine is not your practice continuing operations after you leave but the abundance of patients and staff whose lives you have augmented through the years.
- For more information:
- John B. Pinto is president of J. Pinto & Associates Inc., an ophthalmic practice management consulting firm established in 1979. He is the country’s most published author on ophthalmology management topics, including John Pinto’s Little Green Book of Ophthalmology: Strategies, Tips, and Pearls to Help You Grow and Manage a Practice of Distinction, UP: Taking Ophthalmic Administrators and Their Management Teams to the Next Level of Skill, Performance, and Career Satisfaction (with Corinne Wohl), Simple: The Inner Game of Ophthalmic Practice Success, and Ophthalmic Leadership: A Practical Guide for Physicians, Administrators, and Teams. He can be reached at 619-223-2233; email: pintoinc@aol.com; website: www.pintoinc.com.
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