Retirement: Surgeons tell how to prepare for life after orthopedics

Probably all actively practicing orthopedic surgeons wonder at some time toward the end of their careers, the ever-present question, “Is there life after orthopedics?” This Orthopedics Today Round Table calls upon four orthopedic surgeons who are going through this fruitful experience to impart some helpful ideas as to their success during this phase of their lives. Let us hear what they have to offer.

Ramon L. Jimenez, MD
Moderator

Round Table Participants Moderator Ramon L. Jimenez, MD Monterey, Calif. Douglas W. Jackson, MD Long Beach, Calif. Edward A. Toriello, MD FACS Middle Village, N.Y. Scott B. Scutchfield, MD Lexington, Ky.

Ramon L. Jimenez, MD: Do you feel confident giving others suggestions on financial planning for retirement?

Douglas W. Jackson, MD: I do feel confident to talk in generalizations about things I have learned and practiced preparing for my retirement. However, I want to make a few disclaimers: One is that I am not a financial planner for others, and my comments are based on my experiences, readings, advisors and observing my colleagues over many years. Having said that, I am not trying to pass as an expert in managing others assets. One must also remember that less than 20% of financial advisers beat comparable indexes and benchmarks during a 5-year period. Bernie Madoff was regarded by many as a financial wizard for several years. One thing I have learned is to take the time to thoroughly check, monitor and question people advising and managing my funds. If it is too good to be true, beware.

I feel it is important that everyone should be actively involved and oversee what is being achieved in their retirement plans. As a generalization, in order to hire real wealth management from large financial companies and select advisors, they tend to prefer accounts starting with a minimum of $5 million to $10 million. That does not mean you cannot have a satisfactory financial relationship and good returns with less than that amount usually by participating in some type of pooled funds. However, remember that fees, expenses and tax inefficiencies limit the potential maximum financial growth for most small investors. You need to be involved so you can see that they are not consuming a significant part of your returns under the heading of management fees.

Jimenez: What sort of involvement are you recommending?

Jackson: I feel you need to decide fairly early in your career the assets you will need to provide the income you want in your retirement. Some physicians will have to live on less income after they retire than they would prefer. However, if you plan properly and do not have any major financial debacles, then you can live on an income in retirement similar to your current one.

Once a goal is set, then it means working methodically towards accumulating the assets that will support your desired income during retirement. It can be done. Too many people set up a retirement plan and forget it.

Let me use myself as an example. I decided I wanted to be involved and spend a maximum of an average of 4 hours to 5 hours a week related to retirement asset management and asset accumulation. Each person will be different in the time commitment they are willing to make. In my case, I joined American Association of Individual Investors, which is a group of similarly involved professionals, attended some of their chapter meetings, read their monthly journal and used their tracking for selected portfolios. In addition, I tried to read selected articles in the Wall Street Journal daily. To help balance out my thinking, I have a long-term relationship with a “fee-for-service financial advisor” who revues my decision making, analyzes my returns, helps with re-allocation and makes suggestions. I have a discount brokerage account for stock trades and have used the same bond trader for years.

There are many orthopedic surgeons who have been more financially successful than me. One thing these individuals have in common — a disciplined approach and sticking to a long-term plan. I have known many orthopedists and friends who have become financially independent outside of medicine and have more than adequately funded their retirements.

Jimenez: What risks should people take in reaching their financial goals?

Jackson: The sort of return assumptions you expect will determine your risk level. The higher your risk level, the more like gambling investing becomes. Portfolio diversification has been successful in getting individuals through periods of volatile markets, and regular periodic rebalancing is helpful. A big mistake many physicians make is managing their investments during “volatile markets” in the rear view mirror. They chase previous winners in which they had not invested or they get out during the plunges and come back at the peaks. For example, the 10-year period starting in 2000 saw the Standard & Poor’s Index down 24%. The next 2 years saw a rebound in the same index. Timing of the market has not been reliable in most professionals’ hands and has hurt many physicians’ portfolios. Something I have learned and observed repeatedly is that stock and investment tips in the doctors’ dining room and dressing area are usually not successful.

There are great retirement planning software programs available through financial institutions on the Internet or can be purchased. It is worth the time to go through the drill of analyzing and establishing your current budget and expenses. Know your current monthly expenses and plan for the future. You can project what income stream that would like to have 20 years or 30 years from now. It is amazing how many people do not evaluate their spending patterns and expenses, and do not make disciplined deposits for their retirement funds. You can look and plan for the lifestyle that you would like to have in retirement, however, it is always possible that life events and circumstances will result in having to live on less. Remember, it is possible that orthopedists do not have to reduce their living expenses much with retirement, can be involved and contribute to good causes and help their families as necessary.

Don’t rely on Social Security and Medicare too heavily for your retirement. Look at them as another tax you paid on your income. When you plan on the income you take out of your deferred plans, you must plan on them being taxed significantly. Social Security and Medicare are a safety net for many, but I believe we will see even more means testing for these benefits in the future.

Jimenez: Should physicians underestimate how much money they will need in retirement to maintain their standards of living?

Jackson: Physicians have one advantage in financially preparing for retirement. You have a good income stream, and this has allowed most of us to ride out the ups and downs in given markets. If you develop a program and continue to work toward it, then it can be rewarding. By filling out one of the available retirement planning programs, they will give you multiple variables and scenarios to be aware of in your planning. You will need to make certain assumptions about life expectancy, inflation rate, return on investments and the income stream that you desire. The printouts will give you the chances for achieving different scenarios. I chose a conservative 4% annual return for my calculations. You can run the models with 4% to 8% and higher annualized returns and different life expectancies for you and your partner at different rates of inflation and taxation, and look at the different probabilities (Monte Carlo analysis) for achieving your goals. A goal should be to live comfortably in retirement and be able to worry less about outliving your money. If you do not make it, then the alternative is living on less.

Retirement is much more then financial security. It is a special time in your career and life to do many of the things you did not take enough time to do when working full time. Volunteering and helping others, as well as pursuing hobbies in depth, can bring great satisfaction and often contribute to those struggling in life in life around us.

Volunteer activities

Jimenez: How does one get started in volunteer activity?

Scott B. Scutchfield, MD: First, it is best to identify your interests, skills and amount of work you wish to do. Often there are already some areas in which you have been involved and those are good starting points. Generally, there is a need in many areas. Join a service club like Rotary or Lions, and they will often lead you to other areas. If you belong to a church or synagogue, there are many areas of service and simply letting the leadership know of your interest is all that is needed. Check with the closest orthopedic residency program and let them know of your willingness to mentor. Watch your local newspaper for events in which you might be involved. Often, if you simply show up or express interest, you will be quickly drawn into a project.

The local Salvation Army, as well as United Way, usually has knowledge of your communities’ needs and ways to help others. Offer your home for fundraising events and picnics. Many people are somewhat intimidated by your position as a busy physician and assume you don’t have the time to be involved. Make sure they realize you do have the time and willingness to help. Once people realize your skills and interest, the rest will be history.

Jimenez: What sort of opportunities are there for volunteer work?

Scutchfield: There are unlimited opportunities for orthopedic surgeons to become involved in volunteer work. Much of the area one chooses depends on the individual’s interests, skills, availability and willingness to travel.

In the medical area, some examples include free clinics or surgery for indigent populations in the community, teaching residents in a clinical setting, such as a veterans’ or university hospital, or international mission, such as Orthopedic Overseas.

Serving on non-profit boards, such as the Salvation Army, health departments, hospitals or being in local service organizations, such as Rotary International, are worthwhile. There are usually community service groups that offer hands-on work, for example Habitat for Humanity or One Great Day of Service for those who like to use their carpentry skills.

Most communities have a mentoring program for at-risk school children and career days to introduce students to various occupations. Church activities, such as serving on committees, being a deacon or participating in lay ministry, can be satisfactory. Participating in community affairs in areas, such as planning and zoning, city and county councils or chamber of commerce, can be challenging and fun.

Political candidates who share your concerns and interest need volunteer help and allow the individuals who support them to have a say in the future of their communities.

Jimenez: What are the drawbacks or risks associated with volunteer activities?

Scutchfield: While there are few problems associated with volunteer work in general, there are several areas of which one must be aware. In doing any international medical work it is imperative that you have permission from the government of the host country and that liability issues are worked out ahead of time. Most reliable organizations that organize these trips will do this. I had a friend who went to Africa on his own and was arrested and jailed for a week because he failed to do this.

In local medical volunteer work, make sure you have your own malpractice coverage or the organization has some coverage. While some states do indemnify volunteers, it is still a good idea to have coverage. When serving on boards, make sure you are covered by their insurance should someone file a lawsuit.

It can be easy to overcommit yourself, so be conscious of the time any activity involves and allow for that before accepting a position. Some activities, such as building Habitat houses or playgrounds for the American Academy of Orthopaedic Surgeons (AAOS), can be strenuous, so think about your physical limitations before committing to a task. Volunteering as a local chairman for a candidate often comes with the expectation that you will be a significant contributor, and that is also true for raising funds for your favorite charity. As long as you are thoughtful and plan well, all can be accepted as part of a great experience.

Jimenez: Why get involved in volunteer work?

Scutchfield: Winston Churchill said, “We make a living by what we get, but we make a life by what we give.” There are many good reasons to get involved with volunteer work. First, is that it’s good for mental and physical health. Many studies have shown that as we age and the more we engage our minds, the less likely it is we suffer from mental deterioration. Also, social interaction has been shown to have the same benefit. As physicians, we have spent our lives caring for others, as well as interacting with our patients, staff and colleagues and that is a part of who we are. Suddenly, as we move toward retirement, it is the worse time to isolate ourselves from that community. Through being involved with medical or non-medical volunteer groups, we can stay connected.

Perhaps more important is that there is a great need for volunteers in these economic times. As physicians, we have received a great deal from our communities in our lives, both financially and in the quality of our lives, and we should feel some obligation to give back some of what we have received. We are some of the most educated, leadership-oriented, resourceful and wealthy people in our community. We have experience in mentoring and a gift of compassion for others. All of these skills can be used in a broad area of applications and give us the opportunity to help others.

Hobbies

Jackson: Ramon, did you wait until you retired or semi-retired to develop hobbies to fill your time?

Jimenez: I did not. I had taken a liking to watercolor painting when I was a surgical resident having been stimulated by my father who painted in oils as an avocation for most of his adult life. Although I did not have time to develop my watercolor painting skill fully until I semi-retired, I realized that I had talent and that it was a worthwhile activity. From time to time, I took a 2-day to 3-day workshop, usually as part of a vacation, to keep up my interest. The point is that you probably have an interest or potential hobby that you may have experienced as a young person that you may rediscover.

Jackson: Is there a connection between watercolors and orthopedics?

Jimenez: I believe there is a definite link between the two. What I like about watercolors, in particular, is that it is like an orthopedic surgical procedure. You have to plan and then execute. You burn bridges as you move along because you cannot go back and cover up your mistakes. You have to live with them. You need to move along quickly toward a successful and satisfying end. The one stress-saving difference is that if you don’t like the result you have the option, unlike an orthopedic operation, to watch it carve a gentle arc into the circular file. That is probably the big difference between a hobby and real life.

Jackson: I can appreciate that rekindling an early interest is a ready option, but how about a person who has no previous hobbies or outside interests?

Jimenez: Being an orthopedic surgeon means that you already possess basic motor skills that have been refined. Those skills can be redirected towards an avocation that uses them in a different manner. For example, two former AAOS Academy Presidents, Ken DeHaven, MD, and David Murray, MD, chose to learn about clock repair. They took this hobby on with the same fervor that they had when they started their careers in orthopedics. An extensive course of study and “internship” was necessary. This resulted in a successful new career for them that was income producing. Income was not their primary intention when they chose this second career, but because they approached it with the same vigor and enthusiasm as they did orthopedics, it is no wonder that they were successful. I would counsel you to dive into a chosen hobby, don’t just dabble in it. If you just put your toe into the water, you risk not finding something that is fulfilling and satisfying.

Jackson: What are some other examples of possible hobbies?

Jimenez: I know orthopedic surgeons who have retired or who are contemplating retirement and are planning what they are going to do to fill “all that time” they are expecting to experience. First of all, there is a big difference between complete retirement and a transition into it, which I refer to as semi-retirement. I believe that a transition is preferable, which is what I chose to do. I decided to stop operating while at the top of my game. I have managed to develop a medical-legal practice, which surprisingly has turned out to be satisfying and lucrative. I have to be careful to not let it consume all my time.

I have friends who have taken on interesting and satisfying hobbies. One is into auto restoration. He has gotten so involved that he has built an eight-car garage. Another has pursued a highly skilled form of karate and, at 65 years old, has became a black belt who demonstrated his skills at a graduation exercise against four opponents in front of his six grandchildren. For another retired orthopedist, planting a vineyard, harvesting grapes and bottling wine under a label bearing his family name have been a most fruitful endeavor. One gentleman always liked to cook, so he went to culinary school and is now thinking about opening a small gourmet restaurant. Several friends have returned to college to study history, business and languages.

There are more active pastimes that can serve as physical fitness activities to enhance your enjoyment and personal health. Bicycling, hiking, tennis, swimming and golf are wonderful sports to fill out your active lifestyle. Most of these I characterize as “lifetime sports.” If you have not played golf most of your life, it can be frustrating to learn it at retirement age. I would counsel you that if you make it fun, the beauty of nature and the friendships that you will encounter will more than make up for it.

A hobby can be a great stress reliever. It is good to develop more fully the right side of your brain. You should look for and discover the creative and aesthetic side of your personality. There are studies that individuals who do such activities seem to develop the symptoms and signs of Alzheimer’s dementia to a lesser degree. You will “live” longer and enjoy life more fully.

Quitting surgery

Jimenez: Ed, your professional life changed unexpectedly several years ago because of some health issues. How did you deal with that?

Edward A. Toriello, MD, FACS: That’s right, Ramon. Although I had taken steps financially to prepare for the day I would stop operating by diversifying my income stream, I had not yet psychologically prepared myself for an event that I thought was still years away. When the operating room was suddenly taken away from me, there was a sense of lost identity and loss of purpose.

Jimenez: Lost identity? In what way? You were still able to work in your office, weren’t you?

Toriello: Although I still enjoy an active office practice, I, like many of us, considered myself not just a doctor — I was a surgeon. There are few experiences in life that compare to the sense of fulfillment that comes when another person’s life is improved by the work of our hands. Anyone who has performed surgery knows the feeling of which I speak. I was no longer a practicing surgeon.

Jimenez: I see that could be disturbing for you. What did you do?

Toriello: I contacted several other orthopedic surgeons who were no longer operating and spoke with them. I strongly believe in the concept of mentoring. I went to orthopedists who had dealt with this stage in their careers and asked many questions. I found that they had a perspective that helped get my professional compass re-oriented and my sense of self-worth re-established. I realize now that I should have been having these conversations throughout my career and not just when I was faced with this life crisis.

Jimenez: How did you deal with the loss of income that came with suddenly not doing surgery?

Toriello: Fortunately, soon after I finished my residency, I purchased a good disability insurance policy. I know that there may appear to be many more important items at the top of the “must have” list for young physicians and their families, but I can tell you that your whole life can unravel quickly when an accident or illness impairs your ability to make a living. In addition to purchasing a disability policy, it is imperative that the disability product that you purchase defines “disability” and your “occupation” in a way that will permit you to continue to work as a non-operating orthopedist while collecting disability. I can tell you from personal experience that having this protection will bring you and your family peace of mind should you experience an unplanned work stoppage.

Jimenez: What is your take-home message?

Toriello: No matter where you are in your career, now is the time to observe and speak with your colleagues who have transitioned into a nonoperative practice or retirement. Purchase a solid disability insurance product when you are young and diversify your income stream. Prepare yourself for that day because it will come, sometimes suddenly, and you will be thankful for the time you spend now in preparation.

• Douglas W. Jackson, MD, is Chief Medical Editor of Orthopedics Today. He can be reached at OT@slackinc.com.
• Ramon L. Jimenez, MD, can be reached at Monterey Orthopaedic & Sports Medicine Institute, 10 Harris Ct., Monterey, CA 93940; 831-643-788; email: ramon@jimenez.net.
• Scott B. Scutchfield, MD, can be reached at University of Kentucky, Department of Orthopaedics and Sports Medicine, Lexington, KY; email: mdscutch@bellsouth.net.
• Edward A. Toriello, MD, FACS, can be reached at 78-15 Eliot Ave., Middle Village, NY 11379; 718-458-8944; email: edwardtoriello@gmail.com.
• Disclosures: Jackson, Jimenez, Scutchfield and Toriello have no relevant financial disclosures.