Can I retire (early)?

[sleepyz]

Hi,
Sorry for another "Can I retire" post, but I am burnt out and I think I need to head for the exit. I am 53, single, no kids, Software Engineer working/living in the SF Bay Area making ~250K/year + RSUs. I have no debt, and I don't own a house (I rent). I am also a part time caregiver for a parent.

Total Assets: 4M

Cash: 2M
Stock: 900K
Mutual Funds: 435K

IRA: 12K
Roth IRA: 21K
401K: 570K

My projected expenses are 60K/year. My current expenses are less than 40K/year. I should eventually inherit the house from my parent, so my expenses should go down later (parent has ~2M assets (not including the house) and LTCI, so it is pretty certain).

Pro: All the calculators I ran, said I should be fine. I've been burned out for a long time now, and things at work are getting worse. I'll be able to spend more time taking care of my parent, and more time for myself (travel, etc.).
Con: Will give up over 100K in unvested RSUs and a decent salary.

Thoughts?

Thanks!

[Unladen_Swallow]

53
Burnt out
Single
No kids
4MM
60k expenses per year.


Retire? Absolutely!

I don't know all the details of your holdings, I will let others with more wisdom address that. Perhaps there might be recommendations on refining your portfolio for a long retirement.

But retirement...yes. I hope you enjoy the time for yourself and with your parent.

[OogieBoogie]

Yes, you could retire definitely. My goal is 2M and I live in Switzerland lol.

Don't forget that when you retire, you could travel for a few months or a year. With 53 you are in the best age enjoying new stuff and your costs of living abroad will be probably massive lower that your costs in the US.

And the best thing is, that after a year or so, your fire might be back and you pick and chose tasks or projects you really like and work from somewhere on this planet.

P.S. and invite your parents to join you on your travel journey, if they like...

[Third Son]

Hi,
Sorry for another "Can I retire" post, but I am burnt out and I think I need to head for the exit. I am 53, single, no kids, Software Engineer working/living in the SF Bay Area making ~250K/year + RSUs. I have no debt, and I don't own a house (I rent). I am also a part time caregiver for a parent.

Total Assets: 4M

Cash: 2M
Stock: 900K
Mutual Funds: 435K

IRA: 12K
Roth IRA: 21K
401K: 570K

My projected expenses are 60K/year. My current expenses are less than 40K/year. I should eventually inherit the house from my parent, so my expenses should go down later (parent has ~2M assets (not including the house) and LTCI, so it is pretty certain).

Pro: All the calculators I ran, said I should be fine. I've been burned out for a long time now, and things at work are getting worse. I'll be able to spend more time taking care of my parent, and more time for myself (travel, etc.).
Con: Will give up over 100K in unvested RSUs and a decent salary.

Thoughts?

Thanks!

2M in cash? Why?

[RickBoglehead]

Guess I am wondering why the need to post? You have been on the forum over a decade so you have read all the advice.

$3,938,000 / 60,000 = 65.6 years. Simple math. No investment return needed.

Having $2 million in cash is crazy. Your portfolio invested 40/60 would throw off more than your annual spending.

[chipperd]

Absolutely yes. Some would say you are retiring late

[Stef]

$3,938,000 / 60,000 = 65.6 years. Simple math. No investment return needed.

Don't forget inflation. Assuming 2%/year, you'll need 90k/year for the same expenses (ignoring taxes for simplicity) after 20 years and 120k/year after 35 years. So maybe it's closer to ~45 years without investment return.

[snowox]

ahhhh yeah... Heck you could take 100k a year for 40 years with no return depending on what your doing . 2M cash makes no sense. But if you laddered even CD's cuz your scared to death of something you could almost cover your spending on that alone.

[JoeRetire]

I am 53, single, no kids

Total Assets: 4M

My projected expenses are 60K/year.

Is this serious?

If your expenses are only $60k, and you have $4M, you can retire now and live for 66 years with 0% growth in your nest egg, not even taking social security into account.

You've been here for over 10 years. Surely you must have calculated the possibility before now? And why so much in cash?

[Wiggums]

Guess I am wondering why the need to post? You have been on the forum over a decade so you have read all the advice.

$3,938,000 / 60,000 = 65.6 years. Simple math. No investment return needed.

Having $2 million in cash is crazy. Your portfolio invested 40/60 would throw off more than your annual spending.

+1

Enjoy your retirement...

[jimmyq]

Absolutely. You can retire and I think you already know that, but just want some external confirmation first. I retired at 52 with far less assets but similar projected expenses. Any uncertaintly you have is purely psychological, because financially you are secure.

[1130Super]

The only reason I can think of for having that much cash would be if you just sold a house? Leave the Bay Area to Florida where there is no State tax and lower cost of living you could live like a king

[flyingaway]

The only reason I can think of for having that much cash would be if you just sold a house? Leave the Bay Area to Florida where there is no State tax and lower cost of living you could live like a king

I'm just curious what a king`s life looks like.

[sleepyz]

Hi All,
Thanks a lot for all the replies. Yes, I guess I'm looking for confirmation that I'm in ok shape. As to the large cash position, yes I plan on rebalancing to something more like 50/50. I'm a good saver, but a lousy investor. I'm thinking of doing the Rick Ferri Portfolio 2nd Opinion that I saw recommended on some other retirement post. I guess I'll be adding my name to the Roll Call for the Retirement Class of 2020

Thanks again for all the comments!

[radiowave]

Hi All,
Thanks a lot for all the replies. Yes, I guess I'm looking for confirmation that I'm in ok shape. As to the large cash position, yes I plan on rebalancing to something more like 50/50. I'm a good saver, but a lousy investor. I'm thinking of doing the Rick Ferri Portfolio 2nd Opinion that I saw recommended on some other retirement post. I guess I'll be adding my name to the Roll Call for the Retirement Class of 2020

Thanks again for all the comments!

OP, if you haven't done so already, you could put the cash in some short term cash instruments like short term bond fund, CDs, or money market fund (probably at a return around 1.6 to 2.0%). Do you have an investment policy statement (investment plan)? If not, forum members could help you with that.

[wander]

Yes, you can. Can you quit tomorrow or are you just asking?

[blahblahsunshine]

You are good to go!

[Watty]

I agree that you can retire(even if your expense numbers are off).

A few things to you might try first;

1) See if you can take a sabbatical from work and use up all your vacation time. That might help you decompress and get closer to vesting more RSUs.

2) While you are still working you can afford to hire someone to help with the caregiving for your parent. Having help may reduce stress and you may need to have help in place if you want to travel.

3) If you have a long commute you could rent some place that is very close to your office. That might cost a lot more but while you are working you can afford it and that could reduce the stress.

4) Consider setting boundaries at work, like limiting overtime and travel. You may be able to say "no" to some requests. Let your manager know that this is going to happen and they may be able to work around it. I have seen people do this successfully a number of times and the worst they can do is fire you. You might not get the next promotion or bonus and you may be the first in line for the next round of layoffs(maybe with severance ) You might be able to transfer to a less demanding position. If you are ready to retire anyway you have nothing to lose.

I don't own a house (I rent).

.........

My projected expenses are 60K/year. My current expenses are less than 40K/year.

Your expenses seem extremely low for renting in the Bay Area. It would be good to take a hard look at those to confirm they are right.

Be sure to include taxes in your expenses.

Also include things that are paid through payroll withholding like for health insurance.

You will also get Medicare and and Social Security some day. When you look at what Social Security you will get on their web site be sure to specify that you would stop working today, it defaults to assume you will work until you are 65. See this website to get a suggested claiming strategy.

https://opensocialsecurity.com/

[manatee2005]

I agree that you can retire(even if your expense numbers are off).

A few things to you might try first;

1) See if you can take a sabbatical from work and use up all your vacation time. That might help you decompress and get closer to vesting more RSUs.

2) While you are still working you can afford to hire someone to help with the caregiving for your parent. Having help may reduce stress and you may need to have help in place if you want to travel.

3) If you have a long commute you could rent some place that is very close to your office. That might cost a lot more but while you are working you can afford it and that could reduce the stress.

4) Consider setting boundaries at work, like limiting overtime and travel. You may be able to say "no" to some requests. Let your manager know that this is going to happen and they may be able to work around it. I have seen people do this successfully a number of times and the worst they can do is fire you. You might not get the next promotion or bonus and you may be the first in line for the next round of layoffs(maybe with severance ) You might be able to transfer to a less demanding position. If you are ready to retire anyway you have nothing to lose.

I don't own a house (I rent).

.........

My projected expenses are 60K/year. My current expenses are less than 40K/year.

Your expenses seem extremely low for renting in the Bay Area. It would be good to take a hard look at those to confirm they are right.

Be sure to include taxes in your expenses.

Also include things that are paid through payroll withholding like for health insurance.

You will also get Medicare and and Social Security some day. When you look at what Social Security you will get on their web site be sure to specify that you would stop working today, it defaults to assume you will work until you are 65. See this website to get a suggested claiming strategy.

https://opensocialsecurity.com/

Social Security uses your highest 35 years of income. Since he's 53, if he was working since 22 he probably has 31 years and 4 will be 0. That probably drops his social security income by about 10% ( I didn't do the math)

[whodidntante]

4 million and single? I'm afraid I have bad news. You can retire, but you will be unable to afford a new Tesla every year.

[Unladen_Swallow]

Social Security uses your highest 35 years of income. Since he's 53, if he was working since 22 he probably has 31 years and 4 will be 0. That probably drops his social security income by about 10% ( I didn't do the math)

Much less than 10%. It has diminishing returns after a point.

[orhkaf]

I would’ve retired long ago my friend. Enjoy the time with your parent(s).

[willthrill81]

With a halfway reasonable portfolio, you should be able to withdraw at least $120k, adjusted for inflation, every year for the rest of your life and likely finish with at least as much, adjusted for inflation, as you started with.

[sleepyz]

OP, if you haven't done so already, you could put the cash in some short term cash instruments like short term bond fund, CDs, or money market fund (probably at a return around 1.6 to 2.0%). Do you have an investment policy statement (investment plan)? If not, forum members could help you with that.

Working on an investment plan...

...

1) See if you can take a sabbatical from work and use up all your vacation time. That might help you decompress and get closer to vesting more RSUs.

2) While you are still working you can afford to hire someone to help with the caregiving for your parent. Having help may reduce stress and you may need to have help in place if you want to travel.

3) If you have a long commute you could rent some place that is very close to your office. That might cost a lot more but while you are working you can afford it and that could reduce the stress.

4) Consider setting boundaries at work, like limiting overtime and travel. You may be able to say "no" to some requests. Let your manager know that this is going to happen and they may be able to work around it. I have seen people do this successfully a number of times and the worst they can do is fire you. You might not get the next promotion or bonus and you may be the first in line for the next round of layoffs(maybe with severance ) You might be able to transfer to a less demanding position. If you are ready to retire anyway you have nothing to lose.

...

Your expenses seem extremely low for renting in the Bay Area. It would be good to take a hard look at those to confirm they are right.

Be sure to include taxes in your expenses.

Also include things that are paid through payroll withholding like for health insurance.

You will also get Medicare and and Social Security some day. When you look at what Social Security you will get on their web site be sure to specify that you would stop working today, it defaults to assume you will work until you are 65. See this website to get a suggested claiming strategy.

https://opensocialsecurity.com/

Thanks for the suggestions to help cope/improve things at work, but mentally, I think I'm done.

Regarding my budget, it is pretty low but I think it is pretty close. My rent is only 2K/month (utilities included, yup I got a deal). My other expenses (internet, phone, food, eating out, gas, ..) works out to be about 1K/month (tracked with mint). To this, I added 1K/month for a silver health plan plus deductibles and another 1K for a buffer. I haven't figured out what my tax would be, but it should be lower after retiring.

Checking the SSA calculator, working another 4 years would only change things by about 9%.

Thanks.

[Momus]

Most Def a Humble brag post.

2M cash is a problem. Why? Probably too scared and trying to time the market, and now it's at all time high is my best guess.

4M, just getting S&P 500 2% dividend will give you 80k/yr you know lol.

Your next post should be "I'm submitting my 2 weeks notice". Wait scratch that, "I'm not coming to work tomorrow".

[north2016]

The more important question is what will you retire to?

[FI4LIFE]

Good luck and live a little. You've earned it.

[student]

$3,938,000 / 60,000 = 65.6 years. Simple math. No investment return needed.

Don't forget inflation. Assuming 2%/year, you'll need 90k/year for the same expenses (ignoring taxes for simplicity) after 20 years and 120k/year after 35 years. So maybe it's closer to ~45 years without investment return.

I think this is just a simple calculation for illustration. For example, one can use the entire amount to purchase inflation protected securities or TIPS funds. So no investment return, only inflation protected.

[student]

Most Def a Humble brag post.

2M cash is a problem. Why? Probably too scared and trying to time the market, and now it's at all time high is my best guess.

4M, just getting S&P 500 2% dividend will give you 80k/yr you know lol.

Your next post should be "I'm submitting my 2 weeks notice". Wait scratch that, "I'm not coming to work tomorrow".

I don't think it is a humble brag based on past posts. As another poster has noted, the OP has been a member for over 10 years but has posted only occasionally. I think the OP just needed confirmation before taking the next step.

[LittleGreenSoldiers]

Sleepyz,
Could you stick it out one more year? Food for thought(based on 2 assumptions).
1. Your 401K is with your current employer.
2. You will be turning 54 later this year.

If both of the above are correct then on January 1, 2021 you will enter the year in which you turn age 55.
It might be to you advantage for the long play to retire from your employer in the year you turn 55 and have penalty free access to your 401K funds at 55. Then start Roth conversions. Obviously you don't need the 401K funds early on but it would be worth looking into.

Others here are more knowledgeable than I am on rule 55. (I'm 4 years away from this option.) I would think starting to convert your 401K funds at 55 would have a profound effect on your tax situation once you reach the RMD time frame since there are know RMD requirements for Roth.

[Leemiller]

Op, I think you should pay for someone to advise you. Whatever you pay them will be worth the market gains you’ve missed out on my sidelining 2m. Last year alone, that is what 400-600k depending on asset allocation for the 2m alone? Penny wise pound foolish in my opinion not to go with one is the names mentioned here for advice.

I also think it makes sense to hire someone to help with your parent. I wouldn’t be surprised if your burnout was more related to the stress of that situation then your job. But yes, you can obviously quit.

[minesweep]

Just Do It (Make Your Dreams Come True)

[bb]

Last year alone, that is what 400-600k depending on asset allocation for the 2m alone?

That is a ridiculous statement if someone doesn't want to be invested 100% in equities.

[jvini]

The bottom line is not to accumulate wealth, it's to enjoy life. The money you saved is enough to do that at a relatively early age. You now know you can retire and enjoy. As others suggested, you need to rebalance. I hope you read The Three Fund Portfolio. Keep things simple, be smart. Congratulations on your situation.

[Wanderingwheelz]

The way you describe your situation, I’d definitely hang it up if I was in your position.

At 48/44 my wife and I are in a very similar position, although my parent is still able to care for himself. We will inherit a home worth $1.5MM, plus who knows what else.

So at @ $4MM we’ve put away already (includes paid off home), plus whatever happens later I know for a fact my wife and I could retire today if we wanted to.

Go for it.

[HomeStretch]

Guess I am wondering why the need to post? You have been on the forum over a decade so you have read all the advice.

$3,938,000 / 60,000 = 65.6 years. Simple math. No investment return needed.

Having $2 million in cash is crazy. Your portfolio invested 40/60 would throw off more than your annual spending.

+1

Enjoy your retirement...

+2. Kudos for helping your parent.

[Watty]

Regarding my budget, it is pretty low but I think it is pretty close. My rent is only 2K/month (utilities included, yup I got a deal). My other expenses (internet, phone, food, eating out, gas, ..) works out to be about 1K/month (tracked with mint). To this, I added 1K/month for a silver health plan plus deductibles and another 1K for a buffer. I haven't figured out what my tax would be, but it should be lower after retiring.

You should be fine.

On the work stuff I was sort of trying to play devil's advocate to help you look at alternatives. You sounded more like you were just tired of work than you were getting excited about retiring.

With $4 million in investments 2% in interest and dividends alone would be $80K a year without touching your nest egg. With more free time you may spend more and do things like travel so just be prepared for your expenses to be higher than expected.

You might want to plan your numbers with the assumption that your expenses will be $100K a year, including taxes, so you can be pleasantly surprised if you spend less. That is only a 2.25% withdrawal rate so even without Social Security or any inheritance that is still a very conservative spending plan.

One thing that has not been mentioned is if you might need to pay for long term for your parent if they need it. You mentioned that they have a house so that home equity could be enough to pay for it so that might not be a problem. You might want to review if you have all the paperwork to sell their house if you needed to if they suddenly went into a nursing home. As I recall some states want a special power of attorney for real estate transactions.

[oldfatguy]

If you can't retire, no one can.

[Watty]

Op, I think you should pay for someone to advise you. Whatever you pay them will be worth the market gains you’ve missed out on my sidelining 2m. Last year alone, that is what 400-600k depending on asset allocation for the 2m alone? Penny wise pound foolish in my opinion not to go with one is the names mentioned here for advice.

I also think it makes sense to hire someone to help with your parent. I wouldn’t be surprised if your burnout was more related to the stress of that situation then your job. But yes, you can obviously quit.

You could also ask for suggestions on how to invest your money here by posting your information using this suggested format as a guideline.

viewtopic.php?f=1&t=6212

If you feel like you need assistance with investing then Vanguard will do that for just a 0.3% fee and not try to rip you off by putting you into expensive junky investments.

https://investor.vanguard.com/advice/personal-advisor

The problem is that probably 99% of "investment advisors" are really worse then used car salesmen that can legally sell you junk that has high commissions and high ongoing costs. A 1% annual fee is usually just the tip of the iceberg and they have lots of ways to make a lot more money off of you in addition to that.

Even 1% is very expensive since that needs to come out of your spending for the year. There are academic studies with all sorts of assumptions and qualifications that have shown that in the past someone with a balanced portfolio of stocks and bonds could has started out at 65 and had a 30 year retirement starting out with about a 4% safe withdrawal rate. The reason that percentage is so low is that you need to be able to keep up with inflation and long bear markets.

Since you are younger and looking at a 40+ year retirement yours would be more like 3% or maybe even less. If you pay someone 1% a year to manage your money then that is a third of your spendable money for that year!

https://www.bogleheads.org/wiki/Safe_withdrawal_rates

If someone suggests that you buy some complex annuity or life insurance as an investment then run. They are trying to rip you off just to make a huge commission.

[Hockey10]

Give your notice today. Congratulations, you have won.

[HomerJ]

Not only can you retire, you can get yourself spectacularly fired.

Make it a story that people at your company will still be talking about 10 years from now...

[ronno2018]

The only reason I can think of for having that much cash would be if you just sold a house? Leave the Bay Area to Florida where there is no State tax and lower cost of living you could live like a king

I'm just curious what a king`s life looks like.

Well in Florida it would include increasing flooding as the seas rise, more frequent and stronger hurricanes, and declining property values. So if you want to be a "king" of that move there.

[David Jay]

4 million and single? I'm afraid I have bad news. You can retire, but you will be unable to afford a new Tesla every year.

Actually (calculate, calculate, calculate), he can afford a new Tesla every year, but only a Model 3

[Carol88888]

I thought a studio apt. in SF was about $3500 so it would be about $40,000 in rent alone. I'm just curious - what kind of deal do you have and are you sure that it will stay that way?

Your parent could live a long time and if you lost your housing deal that could blow your budget apart.

[marcopolo]

Come on Bogleheads, don't disappoint me now.
Where are the usual suspects? I was expecting at least a few "but you have to consider...

Inflation could wipe you out
Health care expenses are unknowable
Valuations are high
Don't forget Japan
You are too young
If you aren't working you can't possibly have a meaningful life

I am sure I am missing at least a few other.

We did get one suggestion to work one more year to get access to the 500k in the 401k, this while there is over $3m in easily accessible accounts

Enjoy your retirement, and kudos for helping your parents

Best of luck to you.

[Unladen_Swallow]

"but you have to consider...

Inflation could wipe you out
Health care expenses are unknowable
Valuations are high
Don't forget Japan
You are too young

What if the Great Depression strikes again, followed by back to back 50% drawdowns? Plus 10% inflation, but with stagnation like Japan? What then? Is he ready for that catastrophe? I didn't think so!

He will eat Alpo under a bridge or starve in the street.

[dogagility]

"but you have to consider...

Inflation could wipe you out
Health care expenses are unknowable
Valuations are high
Don't forget Japan
You are too young

What if the Great Depression strikes again, followed by back to back 50% drawdowns? Plus 10% inflation, but with stagnation like Japan? What then? Is he ready for that catastrophe? I didn't think so!

He will eat Alpo under a bridge or starve in the street.

Truer words of impending doom were never before written.

[Plano]

OP, what you describe as burnout is so common that they have a term for it: caregiver burnout. See, e.g., https://my.clevelandclinic.org/health/d ... er-burnout.

It's great that you have options because you are FI, but give some serious thought to what you will be doing after you stop working. If the answer is spend more time caring for your elderly parent, then you might find yourself worse off mentally. If the cause of your burn-out is the job itself, the co-workers, or something else, then retiring early is not a bad idea if there are no less-drastic solutions (I like Watty's suggestions a lot).

Figure out what is causing the burn-out, then make major life changes accordingly. I recommend you make an appointment with your doctor to discuss this; you'll probably get a referral for therapy, which could help identify the cause of your mental burnout. I've seen this a lot, especially among "good kids" like you. In my experience as a disability lawyer for a couple of decades, it's rarely the job that's causing the burn-out. If you're clinically depressed (which happens when a parent dies suddenly -- worse when they die slowly) and you have disability insurance, you could file a claim instead of quitting your job. That's why you paid for the coverage.

[Watty]

(I like Watty's suggestions a lot).

Thanks,

4) Consider setting boundaries at work, like limiting overtime and travel. You may be able to say "no" to some requests. Let your manager know that this is going to happen and they may be able to work around it. I have seen people do this successfully a number of times and the worst they can do is fire you. You might not get the next promotion or bonus and you may be the first in line for the next round of layoffs(maybe with severance ) You might be able to transfer to a less demanding position. If you are ready to retire anyway you have nothing to lose.

Just to elaborate on this if you go to a manager and explain the situation with your parent they may be much more understanding than you might expect.

They are human and may have very well have gone through something with their parents, or can picture themselves in a similar situation in the near future.

Also be sure to understand how FMLA(Family Medical Leave Act) works and what rights you have with that. I had to use that once and much to my suprise the HR person I was dealing with was not adversarial like HR people often are, she was more than helpful with taking me through the process and making sure that I knew everything I needed to know. It turned out that she had been through a similar family situation a few years before.

Many companies have some sort of Employee Assistance Program(EAP) to help employees get counseling when they need it and to come up with a plan to get them through various situations. I have never been directly involved with one of those and I would normally be cautious about getting a company involved in a personal issue but since you are ready to retire anyway you don't have anything to lose contacting them, if your company has one, would be an option to consider. My impression is that companies take these very seriously and if an EAP counselor says that you should be allowed to work half time for six months then that will almost certainly happen.

You very likely can also get counseling through your normal health insurance without going through the EAP program.

Between all the money you have and all of these types of things, you have lots of options.

If you really want to retire and are looking forward to it then that is fine and you can do it.

If you are not sure that retiring will make things better then you might consider all your other options.

[sleepyz]

Hi All,
I really appreciate all the great advice here. A lot of insightful comments and information. You helped reduce my anxiety and I think things are a bit clearer now. I'll be taking a short vacation this weekend to finish sorting out my thoughts.

To answer some of the questions/comments: I'm renting from a relative, so the rent situation is pretty stable, but I probably won't rent there forever. I do have a couple of caregivers working to help out, but I should look at increasing their hours to give me some more personal time. I am thinking about what I want to "retire to" (aside from golf and fishing), that was also the same advice I received from a friend who retired early.