Calculating retirement: Add up your numbers

Some basic math skills can help you determine when you're financially ready to hang up the white coat -- and how much money you'll need afterward.

By Katherine Vogt, AMNews staff. Nov. 28, 2005.

Some physicians do it at 65. Others make it happen at 50. Some don't do it all.

For each, the number is different. But for nearly all, choosing when to retire depends on a lot more than age alone.

Most physicians will attest that in order to retire, they need to reach a monetary goal that will enable them to live comfortably after their working years. Picking just the right number could impact everything from health care to housing, whether they play golf or watch it on television.

To find the magic number, many financial advisers use a series of calculations. Depending on the method used, they may factor in a survey of assets, projected expenses and predictions about variables such as investment returns and interest rates. Some even use special calculators to determine when a person it likely to die.

Whatever method is used, physicians have a special interest in making sure it is as comprehensive -- and potentially accurate -- as possible. Physicians tend to have shorter careers and more school debt than do other professionals, leaving them at a disadvantage in retirement planning.

"They're very much like athletes, who have a short-term career. In medicine, by the time they really get going and make any money, they're well into their 40s," said John E. Sestina, a fee-only financial planner and president of Columbus, Ohio-based John E. Sestina and Co.

The first steps in calculating a physician's retirement age often include an assessment of assets and debts -- a have and have-not check list that might count everything from investment portfolios, bank accounts and loans on houses, boats, artwork and more.