Personal Finance

I'm a doctor who is about to turn 50 - is my $4 million nest egg on track for retirement?

Marc Guberti

Published: February 1, 2025 12:54 pm

The Fat FIRE Reddit group is filled with inspiring stories of individuals who have saved a lot of money from retirement. This post encapsulates a 49-year-old doctor’s journey as he aims for retirement within the next 5-8 years.

The physician has a $4.9 million portfolio. He is married and has children who are entering college. They live in a HCOL area. He has invested $3.7 million so far and adds $200k-$300k each year in investments. He has questions about his portfolio allocation as he plans out retirement within 5-8 years. I will share my thoughts, but it is always good to speak with a financial advisor if you can.

Assessing the Portfolio

The Redditor highlighted how he has spread his $3.7 million:

• 401k – 1.1m (50% S&P 500; 50% Fed High Yield Bond)
• Brokerage – 2.5m (80% VTSAX; 10% VTIAX; 10% AAPL)
• Other tax advantaged (SEP-IRA, IRA, 503b) – 250k (100% S&P 500)
• 529 for both kids will fully cover college costs

VTSAX and AAPL have delivered solid long-term returns for investors, but the same can’t be said about VTIAX. While that fund is up over the past five years, its 14% return during that stretch leaves much to be desired. It may make more sense to shift the funds from VTIAX to VTSAX or consider another ETF with good long-term gains.

The doctor also has 50% of a $1.1 million portfolio in bonds. This is a bit too conservative for a high-earning physician who is targeting retirement in the next 5-8 years. The Redditor wonders if swapping the bonds for more exposure to the S&P 500 is a good move, and it’s definitely something worth considering. The S&P 500 has a history of delivering solid returns, and it’s not as risky as the Nasdaq Composite.

Will the Doctor Have Enough at Retirement

A $3.7 million portfolio is enough for many retirees, but the doctor lives in a HCOL area and has a family. However, the doctor should be in a good position within the next 5-8 years. I am assuming that the children will be out of school within 5-6 years since he said in the post that they will soon be entering college (we don’t know what grades his children are currently in).

The nest egg will continue to grow due to compound investments and the doctor’s $200k-$300k annual investments. The 529 plans handle college expenses, and his kids should soon bring in their own income after graduating. That means he won’t have to cover as many expenses within the next 5-8 years, making it even easier to retire.

Using the 4% withdrawal rule for a $3.7 million portfolio, the doctor can withdraw $148k from his portfolio each year. That number will grow quite a bit with the extra years at work, possibly to more than $200k per year. This annual withdrawal would require a $5 million portfolio, assuming a 4% withdrawal rate. That’s a very attainable goal for the physician within the next 5-8 years.

He has put himself in a good spot, and the comments seemed happy for him. There was some advice around the bonds in his 401(k), but he received some well-deserved congratulatory remarks.