Work or retire.
It’s often framed as a binary choice, especially in the medical field.
Except there’s a middle path, too: working part-time, even just a couple of days per week.
This not only addresses any potential burnout you’re facing but also reduces portfolio withdrawal rates, delays Social Security claiming, and can extend portfolio longevity.
That said, the challenge for many physicians is structuring part-time work (employed vs. locum tenens vs. telemedicine) and determining how much income they actually need to make the numbers work.
Let’s walk through the implications of part-time medicine, the different work models available, what you sacrifice versus what you gain, and how to determine whether one day, two days, or three days per week is enough to bridge to full retirement.
How Part-Time Work Changes the Physician Retirement Timeline
Full retirement means living entirely off portfolio withdrawals, Social Security (if claimed), and any pension income. The 4% rule suggests you can withdraw 4% of your portfolio annually with reasonable confidence it will last 30 years.
Part-time work reduces the withdrawal rate needed from your portfolio — sometimes dramatically.
Scenario: Full Retirement vs. Part-Time
Let’s walk through a scenario: a physician retiring at 58 with a $2.5 million portfolio has $150,000 in annual expenses. Social Security won’t begin until age 67, and there’s no pension.
| Full Retirement at 58 | Part-Time Work at 58 | |
| Part-time income | $0 | $120,000 per year |
| Portfolio withdrawal | $150,000 per year | $30,000 per year |
| Withdrawal rate | 6% | 1.2% |
| Real return with 3% inflation | 3% | 3% |
| Portfolio Value at 67 | $1.6 million | $2.8 million |
While this is an oversimplified situation, part-time work enables the portfolio to continue growing — even with withdrawals. By age 67, part-time work leads to a $1.2 million variance between the two paths.
Calculating Your Own Part-Time Income Target
The example above shows the impact, but how do you determine how much you need to earn part-time to make your own numbers work?
Start with this basic framework:
Step 1: Calculate your annual spending gap
Annual expenses – Social Security (if claiming) – Pension (if any) = Portfolio withdrawal needed
If you’re retiring before claiming Social Security, your entire spending needs come from the portfolio initially. We’ll continue assuming $150,000 of expenses and a $2.5 million portfolio.
Step 2: Determine your safe withdrawal rate
While not a personalized figure, a 4% withdrawal rate is widely considered sustainable for a 30-year retirement. If you’re retiring early (age 55–60), you may need to plan for 35–40 years, which argues for a lower rate — perhaps closer to 3.5%.
Multiply your portfolio by your target withdrawal rate; for instance:
$2.5 million × 3.5% = $87,500 annual withdrawal
Step 3: Calculate the income gap (and taxes)
Annual expenses – Portfolio withdrawal = Income gap
Both your portfolio withdrawals and part-time income are taxed as ordinary income, which means a $87,500 withdrawal isn’t really $87,500. Assuming a combined federal and state effective tax rate of approximately 27%, you’d need $205,500 of gross income to net $150,000 for annual expenses.
- $150,000 ÷ 0.73 = $205,500 gross income
- $205,500 – $87,500 = $118,000 needed from part-time work
If $87,500 comes from portfolio withdrawals, you need $118,000 from part-time work to cover your income gap.
That could translate to about a dozen shifts per month as a locum hospitalist, or a couple days per week. Of course, specialty is an important consideration. Hospitalists, radiologists, and anesthesiologists commonly command $200–$300+ per hour for locum work.
Important caveat: This assumes portfolio withdrawals come exclusively from tax-deferred accounts (traditional IRA, 401(k)). If you’re drawing from Roth accounts (tax-free) or taxable brokerage accounts (capital gains rates of 0–15%), your after-tax withdrawal amount will be higher, reducing the income gap. Your specific situation depends on your account mix, deductions, filing status, and state taxes. For precise planning, work with a financial advisor and tax professional to model your after-tax cash flow.
The Work Models: Part-Time Employed, Locum Tenens, and Telemedicine
There are many varieties of part-time work in medicine. The right model depends on specialty, desired autonomy, income needs, and whether you want benefits.
Part-Time Employment
This means employment by a hospital, medical group, or health system with a fixed schedule (e.g., 2 days per week at 0.4 FTE). Benefits are typically prorated: health insurance, CME allowance, and malpractice coverage.
| Advantages | • Predictable schedule and income
• Health insurance coverage • Employer handles credentialing, billing, and malpractice • Potential for 401(k) or 403(b) contribution eligibility, prorated to your hours |
| Disadvantages | • Less flexibility since you’re committed to set days
• Income is typically lower than locum rates • Administrative burden (EMR, meetings, committees) • Not all specialties or employers offer part-time options |
Locum Tenens
Locum work is contract-based through locum agencies. You take short-term assignments (weeks to months) and choose when and where to work.
| Advantages | • Higher hourly rates
• Maximum flexibility (e.g., work two months, take three months off) • Geographic variety • No call, no administrative duties, no committees |
| Disadvantages | • No benefits (healthcare, malpractice, and CME are on your own)
• Income is variable and not guaranteed • Credentialing at each new facility takes time • Travel logistics can be complicated if assignments are out of area |
Telemedicine
Remote clinical work via telehealth platforms can be employed (part-time) or contract-based. It can be asynchronous (reviewing records, responding to messages) or scheduled virtual visits.
| Advantages | • Work from home with no commute
• Flexible scheduling • Lower stress than in-person care for many physicians • Demand has grown substantially post-pandemic |
| Disadvantages | • Income is typically lower than in-person work
• Limited to certain specialties (primary care, psychiatry, urgent care, radiology reads) • Some physicians find it isolating or less professionally satisfying • Credentialing can be complex with state licensure requirements |
What You Give Up and What You Gain
Part-time physicians don’t typically have benefits.
Until Medicare begins at 65, health insurance must be purchased individually through the ACA marketplace, with unsubsidized family premiums running roughly up to $2,600 per month depending on age, location, and plan type. Malpractice insurance tail coverage, which protects against claims filed after leaving a position, typically costs 150–200% of your annual premium. CME expenses typically come out of pocket, and there’s likely no employer retirement match, though you can still contribute to a Solo 401(k) if self-employed.
On the other hand, you gain an invaluable asset: time.
Working two days per week means five days off — time for travel, family, hobbies, or simply rest. Stress should drop significantly. Most locum and part-time roles have no call, no administrative meetings or committees, and less EMR burden in some models.
You also maintain clinical engagement with better work-life balance. Many physicians still enjoy patient care, they just don’t want to do it 50 hours per week. Part-time allows you to stay sharp, mentor, and contribute without sacrificing your health.
And financially, it builds a bridge. Part-time income extends portfolio longevity significantly, delays Social Security claiming (increasing your benefit), and reduces withdrawal rate stress during the critical early retirement years.
Social Security, Health Insurance, and Tax Implications
Part-time income is still ordinary income, taxed at your marginal rate. But if you’ve dropped from full-time (for instance, $400,000) to part-time ($120,000), you’ve likely dropped from the 35% federal bracket to 24%.
In Minnesota, state income tax still applies (the top rate approaches 9.85%) but lower income means a lower effective rate overall.
If you’re not W-2 employed and working as an independent contractor or through locum agencies, you’ll pay self-employment tax: 15.3% (12.4% applies to the first $184,500 of net earnings; 2.9% applies to all net earnings, with no upper limit). This is the equivalent of employer plus employee FICA taxes. One mitigation strategy is forming an S-Corp or LLC to reduce self-employment tax burden on high locum income.
For Social Security, you need 40 credits (10 years of work) to qualify. If you’re already vested (and most physicians are) part-time work still counts toward your benefit calculation, but the impact is minimal if your highest 35 earning years are already set.
If you work part-time from 58 to 67 and delay Social Security claiming until 67 (or 70), your benefit increases by roughly 8% per year of delay. Combined with the portfolio preservation from part-time income, this is a powerful strategy.
Arguably the biggest variable to plan around, though, is health insurance between leaving full-time employment and Medicare at 65. COBRA covers 18 months but is expensive (roughly $2,000+ per month for a family). ACA marketplace plans offer income-dependent subsidies and can run up to $2,600 per month. If your spouse has coverage available, that’s typically the best option. Some part-time employer roles at 0.5 FTE or higher still offer benefits.
The Middle Path
Full retirement isn’t the only option, even if you’re of conventional retirement age. For many physicians, staying clinically engaged on a limited basis is not only financially beneficial but also professionally fulfilling.
Working even one or two days per week can extend portfolio longevity by years, reduce withdrawal stress, and delay Social Security claiming for higher benefits. The structure varies — part-time employed, locum tenens work, telemedicine, consulting — but the outcome is similar. You reclaim your time without jeopardizing financial security.
If you’re in your 50s and contemplating retirement but worried your portfolio isn’t quite there, model what part-time income does to the equation. You might find that two days per week buys you ten more years of runway and a much less stressful transition.
At Pine Grove Financial Group, we help physicians develop personalized retirement plans, including part-time work scenarios and portfolio sustainability projections. If you’re considering stepping back from practicing medicine, schedule a consultation to explore how part-time income changes your retirement timeline.
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