Can You Count to $2.7 Million?


How much money must one save to provide for a satisfactory retirement lifestyle? This vast question is one that many busy veterinarians tend to ignore.

When my father, a physician, retired from practice about 25 years ago, I’m guessing he had the equivalent of about $1 million in savings and other income, maybe a little more. Turns out that was more than enough.

He lived quite comfortably in retirement for more than 15 years and left a decent estate. He wasn’t extravagant, but he did travel and play golf a lot. I think he was very happy during those times. A very rough estimate is that today’s retiring health professionals will need twice what my dad needed — probably more.

In truth, my father had personal finance success because he started investing early, rode out stock market turns and had an able financial advisor. It also helped that he was a child of the Depression era and knew the value of a buck. Translation: He could be cheap.

But being a doctor is a constant pressure situation, so I knew he wanted to retire and he needed the funds to be able to do it right.


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How much money must one save to provide for a satisfactory retirement lifestyle? This vast question is one that many busy veterinarians tend to ignore. If you are worried about whether you'll be living in the penthouse or the outhouse when you stop working, take a ballpark estimate.

An accepted personal financial yardstick calls for multiplying your current income by a factor that takes your age into account. If you're younger than age 40, multiply your income by 40. Multiply by 30 if you're between ages 40 and 50, and by 25 if you're older than age 50.

The formula shows that a 35-year-old veterinarian will need about $3.1 million to retire in good style. For a 45-year-old doctor, it will require $2.7 million in retirement savings. For a 55-year-old veterinarian, the need falls to about $2.3 million.

These are the savings required to maintain a current lifestyle though the years of retirement. Living on about 80 percent of preretirement income (which many experts say is a more reasonable target) will probably require less money — about $2.1 million for an average middle-aged veterinarian.

While the numbers seem daunting, they can serve as a wakeup call about the need to save more aggressively to reach a comfortable retirement life. And there is something within the average veterinarian’s control to help ensure that happy retirement dreams turn into reality down the road.

Be sure to make maximum and automatic investments in your retirement plans, including 401(k)s, IRAs and all other legitimate retirement investment vehicles available. No other single business act delivers a more powerful punch. According to Aon Hewitt, “70 percent of employees who automatically invest are on track to a comfortable retirement, or almost there.”

Warren Buffet has said many, many excellent things, but few can top this: “Don’t save what is left after spending, spend what is left after saving.”

Greg Kelly is a long-time health care writer and editor. He has written for the Physician’s Money DigestTM, Dentist’s Money DigestTM and Veterinarian’s Money Digest® websites. He lives at the Jersey Shore and welcomes comments at

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