This episode focuses on a question that follows many professionals in academic medicine, healthcare, and research: “Can I actually retire?” Jon Gay and Amy Walls explain that the stress behind this question often does not come from a lack of money. It comes from a lack of visibility. Retirement accounts, pensions, 403(b)s, 457 plans, IRAs, and Social Security all produce separate statements. But none of those statements show how everything works together. That leaves people with pieces of information, but not a complete picture.
Amy explains that the common instinct is to start with a number. People want to know how many millions they need before they can retire. But a number by itself does not answer the real question. Retirement planning has to start with life. What does life cost right now? What expenses will go away after retirement? What expenses have been postponed for years and will finally appear? For people whose identity is closely tied to their work, retirement can also feel like a loss before it feels like freedom. That makes it important to define the next chapter before deciding what financial number is enough.
Retirement planning is more complicated for people in healthcare academia. A pension can be the centerpiece, but it often requires an irreversible decision between lifetime monthly income and a lump sum. That decision depends on health, a spouse, other income, investment accounts, and taxes. Amy also explains that 457 plans are often misunderstood. Governmental 457 plans can usually be accessed after separation from service without an early withdrawal penalty, while non-governmental plans work differently. That difference can change the order in which accounts should be used.
Real confidence comes from testing the plan. Retirement readiness should not stay a feeling or a hypothesis. The plan needs to be stressed against hard questions. What happens if the market drops 30 percent in year two? What if someone lives to 97? What if long-term care is needed? When the plan still works under pressure, the question shifts from “Am I ready?” to “I am ready.”
We share the example of a physician researcher who believed she was behind because her peers in private practice had built business equity. Once her full financial picture was mapped against her actual life and goals, she was comfortably on track. Nothing changed financially in that conversation. What changed was her relationship to the information.
A retirement plan is not a one-time snapshot. Life changes, tax laws shift, markets move, and planning needs a rhythm. Annual reviews and updates help keep the plan connected to real life. The relief does not come from hitting a magic number. It comes from finally seeing the whole picture.
(00:00) Intro
(00:54) Why retirement uncertainty is really about visibility, not just money
(02:31) Why starting with a “magic number” is usually the wrong approach
(02:50) How to build retirement planning around actual life costs
(03:25) Why retirement can feel like a loss before it feels like freedom
(04:05) How pensions, 403(b)s, and 457 plans need to be viewed together
(07:15) How stress testing turns “Am I ready?” into “I am ready”
(10:06) Why retirement planning needs regular review, not a one-time snapshot
ThimbleberryU 164 - When Can I Retire
Speakers: Jon Gay & Amy Walls
[Music playing):
Jon Gay (00:08):
Welcome back to ThimbleberryU, I am Jon Jag Gay. Amy Walls from Thimbleberry Financial is with me as always. Hey, Amy.
Amy Walls (00:13):
Hey, Jag.
Jon Gay (00:14):
Well, if you're listening to this, there's a good chance you've spent your career in academic medicine or research (I know it's one of your specialties, Amy). You may have run a lab, you may have carried a clinical panel, teaching the next generation, seeing patients, all the things.
And you've probably done things you were supposed to do: 403(b) enrolled, pension accruing. And yet the question, "Can I actually retire?" just kind of follows you around like this weird shadow.
Not because something's wrong, but because all those pieces have never been in the same room at the same time. So, today, we're talking about how you build that picture. Amy, why does this question stay so unsettled, even when it feels like you've done everything right?
Amy Walls (00:54):
Jag, it's a great question. And I think it's really because the uncertainty isn't about money, which is what we assume. It's about visibility. You have a number of accounts, a pension, a 403(b), a 457 plan, and that IRA that was an account you opened in residency.
Each one of them sends you a statement, but none of those statements actually talk to each other. And when you log in, it says, "Oh, here's how much, based on your account balance," or "Here's how much you can afford to spend in retirement."
But it's only based on that custodian's information that they have based on the accounts you have with them. And it doesn't know anything about your lifestyle.
Jon Gay (01:42):
It's that one piece of a larger picture.
Amy Walls (01:45):
Yeah. And it's got lots of assumptions built into it. So, when you ask, "Is this enough?" What's not stated there, but is quietly behind the scenes is, enough for what? Compared to what?
And this, "is this enough" question has nowhere to land. And so, it's an open loop you carry for years. Doesn't mean there's a shortage of money. It's a shortage of visibility and connection.
Jon Gay (02:15):
Oh, I like that, okay. So, most people start by trying to land on a number. There was a commercial a few years ago with, "What's your number?" "I need X million dollars for my retirement."
If you're listening and maybe you've done that, would that even be the right place to start, Amy?
Amy Walls (02:31):
Well, let me answer with it's the most common place to start.
[Laughter]
Which also implies it's usually the wrong one (laughs). In this context, a number without life attached to it, is just anxiety with a dollar sign.
Jon Gay (02:48):
Oh, now you're speaking my language, okay.
Amy Walls (02:50):
But if we go the other direction, what does your actual life cost right now? Not what you think it should cost, what it actually costs. Now, let's layer in retirement. What changes when you retire?
Some expenses are going to disappear. Others, you've been deferring for 30 years, they're finally going to show up.
And here's something worth naming directly. If your identity is tied to your work (I'm looking in a mirror)-
Jon Gay (03:25):
So am I.
Amy Walls (03:27):
Retirement can feel like a loss before it actually feels like freedom.
Jon Gay (03:32):
Oh, that's such a good point.
Amy Walls (03:33):
So, part of what we're mapping is what does your next chapter actually look like? Is it a full stop? Is it consulting? Is it fewer hours? The plan and thus this number, has to fit that picture, not the other way around.
Jon Gay (03:53):
You got to start from the opposite side, I like that. So, if you're sitting on a pension, 403(b), 457 (a lot of our listeners are), what does it actually take to pull all of that information into one aggregate picture?
Amy Walls (04:05):
Well, it's doing the work. And this is where the work gets real because each of these pieces behaves differently. For our audience today, healthcare academia, your pension (if you've got one) is usually the centerpiece. And it comes with a decision that once made can't be undone.
And what I mean by that is when you retire, you choose monthly income for life or a lump sum. That decision will depend on your health, your spouse, your other income, your other investment accounts, and your tax picture. Like I said, once you choose, you can't go back. So, this is something that needs-
Jon Gay (04:51):
No take backsies.
Amy Walls (04:52):
Exactly, we need to be careful on. Now, one custodian has account types that behave differently from each other. Some get annuitized and some are not within the same account. And those access rules aren't the same as a standard 401(k).
Now, I'm not going to name the custodian here, but this is the most common custodian we see in healthcare academia. And this is really important because it has a lot of nuances. Looking forward or moving forward, your 457 plan is likely the most misunderstood piece of the pie. There are two types of these.
If you're in a governmental 457 plan (which is common at public universities), there's really no early withdrawal penalty, and you can access the funds when you separate from service. But non-governmental 457 plans work differently. That nuance changes the sequencing. So, your 457 plan might need to be the first account you draw from, not the last.
Whereas typically an account like that, an IRA, something tax-deferred, we're going to think it's last or closer to the end. And now, we're going to layer social security timing on top of all of this, claiming at 62 versus 70. There can be a big difference in the dollars you're talking about there.
Jon Gay (06:25):
Absolutely.
Amy Walls (06:25):
So, the goal here (and I do like reducing cognitive load, and I feel like right now I've just raised this cognitive load) is to look at all of this together and decide which account happens when and why.
Or do I really need to look at some of this together as a single picture and then apply the when and the why? And that's really when the fog starts to lift and we can get some of that cognitive load to go away.
Jon Gay (07:00.319):
And if you don't have somebody you're working with on this stuff, a professional can really help you with this stuff. So, once it's all in one place (chuckles), how do you know that you're actually ready to retire? Not probably ready (laughs), but actually ready.
Amy Walls (07:15):
It's about testing it. And today, our audience is research for the most part, academia. So, the answer is when it's no longer a feeling because it has been tested. It's not a hypothesis. So, we build a plan and then we stress it.
What if the market drops 30% in year two? What if you live to 97? What if one of you experiences long-term healthcare issues that require long-term care?
When the plan holds up under those tests, "Am I ready?" shifts from this plethora of questions we've been talking about to an answered question.
Jon Gay (08:01):
Or more succinctly put, "Am I ready" turns into "I am ready."
Amy Walls (08:05):
Exactly. So, here's an example for you. Thinking of a physician researcher who'd spent her career at a single academic medical center. She had a pension, she had a 403(b), she had a 457, Social Security was going to be coming. And she was absolutely convinced she was behind on retirement.
Her peers in private practices had built equity in their businesses. She never had. She didn't have that opportunity, given what she loved to do. And she'd spent years measuring herself against the yardstick of the equity they had in their business and that retirement asset.
But when we mapped where she was at, this plethora of accounts against her actual life, what she actually spent, what she actually wanted from her life, she wasn't behind, she was very comfortably on track. But it was this noise of what others had, what was around her that she didn't have that caused the anxiety.
When we realized that, the truth is nothing about her finances changed in that meeting or in that conversation. What changed was her relationship to them. And that's what seeing the whole picture does.
It also doesn't mean that being on track means that the transition to retirement has to be a hard stop. There are options, and a good financial plan can absorb all of that. The good news about that is it makes the transition be designed and not like a cliff.
Jon Gay (09:56):
I like that. So, once you have that clarity, though, how do you keep it? Your life doesn't stop changing. Retirement isn't a point in time, it's ongoing.
Amy Walls (10:06):
Yeah, Jag, that's a really, really good point and a great question. A plan you build once and never revisit isn't really a plan, it's a snapshot.
So, markets move, tax laws shift, your situation changes to your point. The statistics that I've heard is that the average American adult has a major life change every three years. If you're in a couple, that's two out of three years. So, the situation is changing. Something unexpected is going to come up.
What we do is we build a rhythm with the planning, an annual review and a touch point as things change. The goal is so that you (the consumer, the listener) stays the decision maker on the life you want. And our job becomes carrying that tracking.
So, it's not your job to have to remember which account has required minimum distributions this year or whether your 457 withdrawal affects your Medicare premium. That's us, that’s what we're carrying.
And when that's in place, “Can I retire?” stops being something that you are ultimately responsible for. It becomes something you've answered through providing information. And some of that's factual, that's known, and some of it is the life you want.
Jon Gay (11:39):
I like that. From carrying it to having answered it. It sounds like the relief doesn't come from hitting that magic number back to that old commercial. It comes from finally being able to see the whole picture.
Amy, if one of our listeners wants to come talk to you about this stuff or anything related to their financial future, what are the best ways to find you?
Amy Walls (11:55):
Yeah, they can reach us on the phone (the good old-fashioned landline) at (503)-610-6510 or find us on the internet at thimbleberryfinancial.com.
Jon Gay (12:07):
Great stuff, Amy. We'll talk again in a couple weeks.
Amy Walls (12:09):
Sounds great, Jag.
[Music playing]
Voiceover (12:11):
Securities offered through registered representatives of Cambridge Investment Research Inc., a broker-dealer, member of FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors Inc., a registered investment advisor. Cambridge and Thimbleberry Financial are not affiliated.
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions.
Securities offered through registered representatives of Cambridge Investment Research Inc., a broker-dealer, member of FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors Inc., a registered investment advisor. Cambridge and Thimbleberry Financial are not affiliated.