For those pondering early or even mid-life retirement

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HuckFinn
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For those pondering early or even mid-life retirement

Post by HuckFinn »

I was just running numbers and felt compelled to share something I rarely see when people are pondering early retirement or when they are doing calculations to see if they can retire early.

I retired when I was 39 years old and my wife when she was 41. We are both 52 years old now. We factored in a lot of variables when deciding if we could retire but one of the most beneficial items that was unplanned and never on our radar is having the ability and opportunity to work part time jobs. Especially, jobs we really enjoy and that have brought new experiences!

In the combined 24 years of retirement we have earned just over $152,000. At... a guesstimate of $10 per hour that breaks down to only about 12 hours of work for each one of us per week. We have gone through periods where one of us worked, the other didn't. Or periods where I presently do not work but my wife has worked part time for four years.

One of the benefits has been that we still can contribute these earning to a Roth or Traditional IRA so we continue to build a nest egg. Others might not contribute this money but use the cash earned so they do not have to dip as hard into their savings nest egg.

The financial benefits have been very nice but what has probably been the best part of these jobs is the new experiences we have and different people we get to meet. When we were in our career jobs we both felt constrained as we both worked in the typical "cubicle" type job. However, part time jobs have allowed us to meet people from all walks of life.

I just wanted to pass this along. I worked for about 20 years in a job I am extremely grateful to have had but the last few years were extremely stressful and depressing and I believe it would have been extremely unhealthy to continue. My wife was also in a high pressure job. We are both happily retired and do not regret leaving our full time careers for a second. Sometimes it seems like retiring is jumping off a cliff to Zero Income but just a little extra, especially when it is fun helps.
Last edited by HuckFinn on Thu May 13, 2021 11:50 pm, edited 3 times in total.
FreelancerNYC
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Re: For those pondering early or even mid-life retirement

Post by FreelancerNYC »

Thanks for the perspective. What were the part-time jobs you enjoyed?
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Re: For those pondering early or even mid-life retirement

Post by poker27 »

Certainly a fantasy of mine, so congrats and thanks for sharing!

Would you mind sharing your AA upon retirement, and how your overall portfolio has done over the years? What was/ is your lifestyle like? Finally, after having high pressure, well paying (assuming) jobs, how did it feel to take a 10hr retail job? I’m guessing you likely use to make more in a month, then you now make in a year.

I dream of the day I can hang up my day job, and check receipts at Costco, or check people in at the gym. However coming from a high pressure job with tons of responsibility, idk how it would be mentally.
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Re: For those pondering early or even mid-life retirement

Post by brian91480 »

HuckFinn wrote: Thu May 13, 2021 9:41 pm I retired when I was 39 years old and my wife when she was 41. We are both 52 years old now.
How did you handle healthcare costs?
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Re: For those pondering early or even mid-life retirement

Post by RickyAZ »

You’re able to flip the power dynamic a normal worker has: you don’t need this job so the schedule, duties and obligations can all be negotiated. There are tons of jobs that need doing even in the worst economic conditions and if you can get by making very little you can always find something to do. Perfect set up if you want to travel and work or just try out different businesses and positions for the experiences. Work a few months and move on, or stay if you enjoy it, meet new people or get rid of the old. Best of luck, enjoy the journey
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

FreelancerNYC wrote: Thu May 13, 2021 10:19 pm Thanks for the perspective. What were the part-time jobs you enjoyed?
I worked part time at an indoor tanning facility for more then 6 years. Lots of fun especially since I was in a male dominant industry, had no sisters and went to an all boy high school. Got to chat with a hugely diverse group of clientele.... such as people getting ready to go on vacation (which led to some great vacation tips) and also just new people walking through the door everyday I'd get to chat with - something I definitely didn't get to do in my career job . I was also able to work with a lot of younger people and was often surprised that the missing work ethic in younger people we hear about isn't necessarily true.
My wife has been a church secretary, worked part time at a donut shop, bagging and running and she's also presently a part time book keeper. One of the true highlights has been hearing her come home from work everyday saying "I had a great day at work."
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Re: For those pondering early or even mid-life retirement

Post by dreambig »

Thanks for sharing. Nice to see actual experiences and what is possible rather than grumpy people saying early retirement is unrealistic.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

poker27 wrote: Thu May 13, 2021 10:23 pm Certainly a fantasy of mine, so congrats and thanks for sharing!

Would you mind sharing your AA upon retirement, and how your overall portfolio has done over the years? What was/ is your lifestyle like? Finally, after having high pressure, well paying (assuming) jobs, how did it feel to take a 10hr retail job? I’m guessing you likely use to make more in a month, then you now make in a year.

I dream of the day I can hang up my day job, and check receipts at Costco, or check people in at the gym. However coming from a high pressure job with tons of responsibility, idk how it would be mentally.
It's a pretty long story but in 2008 when I retired we we're about 80% stock and immediately shifted down to the low-mid-70's. Over the last 10 years we've slowly reduced our stock percentage by about 10% and have a stated goal of 60% stock, 40% bond. Due to the market we are hovering near 64% stock and our plan requires us to rebalance if we're 5% off target. I can't tell you how immeasurable the Bogleheads have been, particularly Taylor Larimore in helping put our heads around taxes. Our home is 13% of our net worth and Bogleheads paid for it.

Our ten year cumulative return per Vanguard reads 9.7%. I'd have to do some digging but I think we had our traditional IRA's still at T Rowe for a brief period early on until we rolled it to Vanguard so we might be closer to 10%. Far more than we anticipated.

In the last ten years we have averaged spending 2.5% of our net worth annually. We bought two low mileage certified cars in 2014 we will likely hold onto for another 6 years. Toyota and Subaru (reliable) We like to say we can eat out everyday if we choose but our favorite restaurants are all ones we walk out of for less than $30.... really good Neapolitan pizza, a few nice Thai dishes.... Tacos..... We do go to more upscale restaurants occasionally but the food we really enjoy is budget friendly. We travel and are generous but not wasteful. Probably like a lot of Bogleheads..

I went from a job where it was very high pressure and I was part of the ownership as well as the salesperson. I'd been retired about a year and a half when I took the part time job. I bought a $200 bicycle and had it fitted with bags. I would ride 3 miles to work. Late at night there would be very few customers and I would play music through the store.. and I would either mop... read books on the sly or talk to customers. I would pack the bike back up and ride home at night when the streets were less crowded down side roads. Very peaceful. Huge transition but so very blessed and thankful!
Last edited by HuckFinn on Thu May 13, 2021 11:52 pm, edited 2 times in total.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

brian91480 wrote: Thu May 13, 2021 10:24 pm
HuckFinn wrote: Thu May 13, 2021 9:41 pm I retired when I was 39 years old and my wife when she was 41. We are both 52 years old now.
How did you handle healthcare costs?
That was interesting. When I retired we had a cafeteria style plan that allowed us to maintain insurance pretty inexpensively. The Affordable Care Act (ACA) changed all the equations and our plans. If we did not sign on to the plan our rates tripled in fact close to quadrupled. However.... with the help of the Bogleheads we were able to put our portfolio in order and make it extremely tax efficient. Having very low income we qualify for the (ACA) Affordable Care Act. This was never our intention but it is essentially a tax. The ACA reduced the price of our insurance back close to what we would have been paying had it never been created. There are drawbacks though. We had a large share of our savings in a 401K that became a Rollover IRA. Our intention was to slowly convert Rollover money to Roth each year so that by the time required minimum distributions would occur we would have very little in our Rollovers and the lions share in the Roth.
Since we are signed into the AHA those conversions cause income which increases our healthcare Tax so we opt to minimize conversions at this time.
In a perfect World for our particular situation we would have preferred no ACA, maintain a cafeteria plan and do conversions. But... we had to adjust the sails to the conditions at hand.
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Re: For those pondering early or even mid-life retirement

Post by calwatch »

HuckFinn wrote: Thu May 13, 2021 11:38 pm That was interesting. When I retired we had a cafeteria style plan that allowed us to maintain insurance pretty inexpensively. The Affordable Care Act (ACA) changed all the equations and our plans. If we did not sign on to the plan our rates tripled in fact close to quadrupled. However.... with the help of the Bogleheads we were able to put our portfolio in order and make it extremely tax efficient. Having very low income we qualify for the (ACA) Affordable Care Act. This was never our intention but it is essentially a tax. The ACA reduced the price of our insurance back close to what we would have been paying had it never been created. There are drawbacks though. We had a large share of our savings in a 401K that became a Rollover IRA. Our intention was to slowly convert Rollover money to Roth each year so that by the time required minimum distributions would occur we would have very little in our Rollovers and the lions share in the Roth.
Since we are signed into the AHA those conversions cause income which increases our healthcare Tax so we opt to minimize conversions at this time.
In a perfect World for our particular situation we would have preferred no ACA, maintain a cafeteria plan and do conversions. But... we had to adjust the sails to the conditions at hand.
Did you consider the Barista FIRE route, of signing on part time with a company that offered health care benefits? One benefit of going with doing some shifts at Starbucks, UPS, Costco, etc. is that you could qualify for health coverage, and do conversions at that time. Even if the cost may be higher than the ACA premium with cost sharing, it is unlikely to be higher than the undiscounted cost of individual health insurance.

Even after early retirement, I would still myself trying to earn at least the maximum annual amount to put in a Roth IRA, and maybe 100% of a 401k employee contribution (either as an employee of a firm or in my solo 401k through gig/consulting work). As stated on other threads, once that year is past, the capacity is lost forever. I would essentially shift taxable to the Roth and/or 401k so that those funds would be tax advantaged moving forward.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

calwatch wrote: Thu May 13, 2021 11:50 pm
HuckFinn wrote: Thu May 13, 2021 11:38 pm That was interesting. When I retired we had a cafeteria style plan that allowed us to maintain insurance pretty inexpensively. The Affordable Care Act (ACA) changed all the equations and our plans. If we did not sign on to the plan our rates tripled in fact close to quadrupled. However.... with the help of the Bogleheads we were able to put our portfolio in order and make it extremely tax efficient. Having very low income we qualify for the (ACA) Affordable Care Act. This was never our intention but it is essentially a tax. The ACA reduced the price of our insurance back close to what we would have been paying had it never been created. There are drawbacks though. We had a large share of our savings in a 401K that became a Rollover IRA. Our intention was to slowly convert Rollover money to Roth each year so that by the time required minimum distributions would occur we would have very little in our Rollovers and the lions share in the Roth.
Since we are signed into the AHA those conversions cause income which increases our healthcare Tax so we opt to minimize conversions at this time.
In a perfect World for our particular situation we would have preferred no ACA, maintain a cafeteria plan and do conversions. But... we had to adjust the sails to the conditions at hand.
Did you consider the Barista FIRE route, of signing on part time with a company that offered health care benefits? One benefit of going with doing some shifts at Starbucks, UPS, Costco, etc. is that you could qualify for health coverage, and do conversions at that time. Even if the cost may be higher than the ACA premium with cost sharing, it is unlikely to be higher than the undiscounted cost of individual health insurance.

Even after early retirement, I would still myself trying to earn at least the maximum annual amount to put in a Roth IRA, and maybe 100% of a 401k employee contribution (either as an employee of a firm or in my solo 401k through gig/consulting work). As stated on other threads, once that year is past, the capacity is lost forever. I would essentially shift taxable to the Roth and/or 401k so that those funds would be tax advantaged moving forward.
I had not heard about the Barista Fire route, thanks for sharing. Just doing some reading on it now. My wife has maintained a part time job for four years now and I've been on a break but thinking of dipping my toes back in. It would certainly be a great benefit to have some healthcare benefit even if we pay more but can do conversions. Thanks, gives me some thoughts to think about as I search.
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Re: For those pondering early or even mid-life retirement

Post by Katietsu »

HuckFinn wrote: Fri May 14, 2021 12:00 am
I had not heard about the Barista Fire route, thanks for sharing. Just doing some reading on it now. My wife has maintained a part time job for four years now and I've been on a break but thinking of dipping my toes back in. It would certainly be a great benefit to have some healthcare benefit even if we pay more but can do conversions. Thanks, gives me some thoughts to think about as I search.
Our state university provides health insurance at minimal cost for anyone working 20 hours a week including those jobs that are only 9 months a year. I have no idea how common this is.
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Re: For those pondering early or even mid-life retirement

Post by Wannaretireearly »

Thanks for posting op! Would love to hear more details about the recent jobs you liked/disliked. What advice would you give folks looking for 'fun' part time jobs?
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Re: For those pondering early or even mid-life retirement

Post by Tamalak »

This is my plan. I plan to "retire" around 40 with a 40k SWR. But I don't consider it retirement, I consider it freedom. Retirement implies you don't make money.. I'll do that if I want to!
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Re: For those pondering early or even mid-life retirement

Post by tennisplyr »

Thanks for sharing. I frequently see on this forum an almost unhealthy obsession with my “number” and do I have enough. Live your life folks, you can do it, yes you can! Oftentimes life isn’t about money.
Those who move forward with a happy spirit will find that things always work out.
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Re: For those pondering early or even mid-life retirement

Post by Paradise »

That’s our plan. Projecting for “retirement” within 8 years once I hit my number... I’ll be 45. Retirement in that we won’t *have* to work anymore. After both of us working high stress corporate jobs, I’ll probably do something simple with my hands. My wife says she wants to teach.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

Wannaretireearly wrote: Fri May 14, 2021 2:02 am Thanks for posting op! Would love to hear more details about the recent jobs you liked/disliked. What advice would you give folks looking for 'fun' part time jobs?
A few years back my wife said she was ready to start looking again after a break and I remember offering a few suggestions. She went with something totally off the radar but she just had a gut feeling that it was the right place. Though neither of us has any "ANY"... desire to manage or climb the ladder she started by doing an entry level position alongside high school kids. She loved the job but when it was becoming a little repetitive after a few years the owners just happened to tell her about a part time book keeper position. She's now been doing that for a few years and loves it. They allow her to travel (until Covid interrupted that option) and are very flexible. In return she is also very flexible... if someone is on vacation and they need a fill-in it's no big deal for her to say "yes." So for my wife finding the right place was a little bit about just keeping her eyes open and following her instinct.

For me it was a case of getting out of my comfort zone. Just because the jobs we have taken are much less complex both my wife and I still have the same "perfectionist" attitude and fear of making mistakes or failing. I had to realize there is no "patient on the table we have to save" and for fun jobs it's ok if you make a reasonable mistake though neither of us can imagine showing up late or not trying to do our best. Neither of us has had a job in retirement we didn't like but when looking we have to be willing to say "If this isn't the right path we can move on and set a different course."
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Re: For those pondering early or even mid-life retirement

Post by rockAction »

HuckFinn wrote: Thu May 13, 2021 9:41 pm I was just running numbers and felt compelled to share something I rarely see when people are pondering early retirement or when they are doing calculations to see if they can retire early.

I retired when I was 39 years old and my wife when she was 41. We are both 52 years old now. We factored in a lot of variables when deciding if we could retire but one of the most beneficial items that was unplanned and never on our radar is having the ability and opportunity to work part time jobs. Especially, jobs we really enjoy and that have brought new experiences!
I agree 100%! Having PT jobs not only greatly improves our portfolio success rates, but is a ton of fun and keeps us "young". I work at a local gym, and my wife is a substitute teacher. We both love our jobs, and make enough to max out our IRAs every year. PT work can greatly reduce financial concerns or reservations regarding early retirement, and is something people don't always consider during retirement planning.

Great post, HuckFinn!
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Re: For those pondering early or even mid-life retirement

Post by New Providence »

It goes without saying that anybody should look for the best fit for themselves. The way I see retirement is like a pregnancy, either you are retired or your aren't.
Either way is fine, but I can't understand the I'm retired while working. Or working while retired. It just sounds like a contradiction in terms. Perhaps it is more accurately to describe it as partial retirement or partial working.

It is even more confusing those looking forward to retire so that they can get another job. :shock: As in, I'll retire next year but don't know what to do with my time so will find another job. So, maybe, you aren't really retired?
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Re: For those pondering early or even mid-life retirement

Post by deltaneutral83 »

I assume for anyone fortunate enough to be in this situation any monies earned would go straight to the Roth and continue to live off the taxable. Effectively, "transferring" money from taxable to Roth.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

rockAction wrote: Fri May 14, 2021 8:01 am
HuckFinn wrote: Thu May 13, 2021 9:41 pm I was just running numbers and felt compelled to share something I rarely see when people are pondering early retirement or when they are doing calculations to see if they can retire early.

I retired when I was 39 years old and my wife when she was 41. We are both 52 years old now. We factored in a lot of variables when deciding if we could retire but one of the most beneficial items that was unplanned and never on our radar is having the ability and opportunity to work part time jobs. Especially, jobs we really enjoy and that have brought new experiences!
I agree 100%! Having PT jobs not only greatly improves our portfolio success rates, but is a ton of fun and keeps us "young". I work at a local gym, and my wife is a substitute teacher. We both love our jobs, and make enough to max out our IRAs every year. PT work can greatly reduce financial concerns or reservations regarding early retirement, and is something people don't always consider during retirement planning.

Great post, HuckFinn!
Thanks and congratulations!
Funny you mention working at a gym because I have been pondering going back to work after a break and one of my thoughts is applying at a local gym that's open 24/7. With my wife working part time the two of us can pay for all groceries, dining out, property tax and health insurance. (even though in reality we have been fortunate enough to max out out IRA's)
... and you are correct! Tons of fun and keeps us "young." My favorite job was back in the 80's when I worked at a restaurant washing dishes listening to 80's music in the kitchen. I remember thinking about that job frequently during the stressful times of my career. You can definitely stay young by doing what you enjoy.
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Re: For those pondering early or even mid-life retirement

Post by Kenkat »

If working at a tanning salon and wife working at a donut shop is not nirvana, I don’t know what is. :wink:

My brother in law retired in his early 40s from a high pressure job and worked for many years at a local butcher shop - one of those everybody knows the customer’s names and vice-versa. Loved it.
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Re: For those pondering early or even mid-life retirement

Post by rockAction »

HuckFinn wrote: Fri May 14, 2021 8:26 am
Thanks and congratulations!
Funny you mention working at a gym because I have been pondering going back to work after a break and one of my thoughts is applying at a local gym that's open 24/7. With my wife working part time the two of us can pay for all groceries, dining out, property tax and health insurance. (even though in reality we have been fortunate enough to max out out IRA's)
... and you are correct! Tons of fun and keeps us "young." My favorite job was back in the 80's when I worked at a restaurant washing dishes listening to 80's music in the kitchen. I remember thinking about that job frequently during the stressful times of my career. You can definitely stay young by doing what you enjoy.
I work the front desk at the gym, which is great because people tend to stop and chat after their workouts. I've met so many interesting people, heard unbelievable stories, get amazing life advice from people, and gained some wonderful friendships. It's extremely fulfilling, and is something I look forward to every day.
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Re: For those pondering early or even mid-life retirement

Post by fortunefavored »

I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
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Re: For those pondering early or even mid-life retirement

Post by absolute zero »

fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I think the counter-point would be that most members of this forum do not make $300-$600k per year. But if they did, then yes, going PT doesn’t make much sense financially. But it might still make sense if it’s kind of fun and adds some variety to one’s life, which I think is the OP’s point.
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Re: For those pondering early or even mid-life retirement

Post by tonyclifton »

fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
This is how our family is currently thinking about it. It reduces to time, money and stress in that order.
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Re: For those pondering early or even mid-life retirement

Post by sailaway »

absolute zero wrote: Fri May 14, 2021 9:14 am
fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I think the counter-point would be that most members of this forum do not make $300-$600k per year. But if they did, then yes, going PT doesn’t make much sense financially. But it might still make sense if it’s kind of fun and adds some variety to one’s life, which I think is the OP’s point.
Volunteering is a great alternative for all those non financial benefits.
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Re: For those pondering early or even mid-life retirement

Post by fortunefavored »

absolute zero wrote: Fri May 14, 2021 9:14 am
fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I think the counter-point would be that most members of this forum do not make $300-$600k per year. But if they did, then yes, going PT doesn’t make much sense financially. But it might still make sense if it’s kind of fun and adds some variety to one’s life, which I think is the OP’s point.
Of course here is where I confess my spouse is still working (in a very low paid role/industry) so I'm full of it either way.. But I didn't pull the plug until we were comfortably at a number where we both could quit entirely with 0 future income.
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Re: For those pondering early or even mid-life retirement

Post by fullplay2024 »

Thanks for creating this thread. This is so timely as we're pondering early retirement in our 40s. I just posted this two days ago.

A lot of great ideas and a lot of food for thought. :sharebeer
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Re: For those pondering early or even mid-life retirement

Post by goblue100 »

HuckFinn wrote: Thu May 13, 2021 9:41 pm
In the combined 24 years of retirement we have earned just over $152,000. At... a guesstimate of $10 per hour that breaks down to only about 12 hours of work for each one of us per week. We have gone through periods where one of us worked, the other didn't. Or periods where I presently do not work but my wife has worked part time for four years.
The math on this never made sense to me. You've spent 15,200 hours working at menial jobs. Now, maybe those have been good experiences, I can't judge that but you could have presumably made the $152,000 in something like 3000 hours(guessing) at your other job. Freeing up 12,000 hours of your retirement. I guess drying cars at a car wash or being a checker at a megamart might be fulfilling , but personally I'd rather sit in the back yard with a good book.


Edit: Looks like fortunefavored beat me to this point, I should have read the rest of the thread first.
Last edited by goblue100 on Fri May 14, 2021 10:19 am, edited 1 time in total.
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Re: For those pondering early or even mid-life retirement

Post by keystone »

fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I would say one potential benefit of part-time work for an early retire is that they could pad their social security a bit, especially someone who would ordinarily have a lot of zeros in their 35 year work history, at least some of those zeros would be replaced. For someone past the 2nd bend point, the benefit is not significant, but at least there is some return on investment in addition to the points made by the OP.
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Re: For those pondering early or even mid-life retirement

Post by fortunefavored »

keystone wrote: Fri May 14, 2021 10:17 am
fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I would say one potential benefit of part-time work for an early retire is that they could pad their social security a bit, especially someone who would ordinarily have a lot of zeros in their 35 year work history, at least some of those zeros would be replaced. For someone past the 2nd bend point, the benefit is not significant, but at least there is some return on investment in addition to the points made by the OP.
Ah that is a good point - my spouse is still below the 2nd bend point (I am way past it, even with a lot of zeros) so they still benefit from additional working years. Before you hit the 2nd bend point, social security is a great deal.
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Re: For those pondering early or even mid-life retirement

Post by sailaway »

A friend's wife was commenting that the only thing being him back from retiring was that he hadn't found his retirement job yet. And several people piped up that this made sense.

I kind of get the folks who do this once they are eligible for a pension, but not necessarily ready to retire for various reasons. But for a self funded retirement, I worked those kinds of jobs when I was younger. I have no desire to go back.

I guess it is easy for me to say, as we are mid OMY, with no plans to look for work. Interesting projects will be accepted, we will work if the plan goes sideways, but the jobs mentioned here are for extroverts, not for me.
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Re: For those pondering early or even mid-life retirement

Post by Escapevelocity »

calwatch wrote: Thu May 13, 2021 11:50 pm
HuckFinn wrote: Thu May 13, 2021 11:38 pm That was interesting. When I retired we had a cafeteria style plan that allowed us to maintain insurance pretty inexpensively. The Affordable Care Act (ACA) changed all the equations and our plans. If we did not sign on to the plan our rates tripled in fact close to quadrupled. However.... with the help of the Bogleheads we were able to put our portfolio in order and make it extremely tax efficient. Having very low income we qualify for the (ACA) Affordable Care Act. This was never our intention but it is essentially a tax. The ACA reduced the price of our insurance back close to what we would have been paying had it never been created. There are drawbacks though. We had a large share of our savings in a 401K that became a Rollover IRA. Our intention was to slowly convert Rollover money to Roth each year so that by the time required minimum distributions would occur we would have very little in our Rollovers and the lions share in the Roth.
Since we are signed into the AHA those conversions cause income which increases our healthcare Tax so we opt to minimize conversions at this time.
In a perfect World for our particular situation we would have preferred no ACA, maintain a cafeteria plan and do conversions. But... we had to adjust the sails to the conditions at hand.
Did you consider the Barista FIRE route, of signing on part time with a company that offered health care benefits? One benefit of going with doing some shifts at Starbucks, UPS, Costco, etc. is that you could qualify for health coverage, and do conversions at that time. Even if the cost may be higher than the ACA premium with cost sharing, it is unlikely to be higher than the undiscounted cost of individual health insurance.

Even after early retirement, I would still myself trying to earn at least the maximum annual amount to put in a Roth IRA, and maybe 100% of a 401k employee contribution (either as an employee of a firm or in my solo 401k through gig/consulting work). As stated on other threads, once that year is past, the capacity is lost forever. I would essentially shift taxable to the Roth and/or 401k so that those funds would be tax advantaged moving forward.
I wouldn't want to rely on one of these jobs for my healthcare. For me, the freedom of knowing that I can work or not work without any real commitment gives a tremendous sense of pleasure.
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Re: For those pondering early or even mid-life retirement

Post by Marseille07 »

HuckFinn wrote: Fri May 14, 2021 12:00 am I had not heard about the Barista Fire route, thanks for sharing. Just doing some reading on it now. My wife has maintained a part time job for four years now and I've been on a break but thinking of dipping my toes back in. It would certainly be a great benefit to have some healthcare benefit even if we pay more but can do conversions. Thanks, gives me some thoughts to think about as I search.
You already seem to have 40x saved up, no need for BaristaFIRE. The term doesn't even make sense because BaristaFIRE is neither FI nor RE. It's a shoe-horned term for those accumulated 15x~20x and want to downshift while collecting healthcare benefits.
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Re: For those pondering early or even mid-life retirement

Post by LittleMaggieMae »

Thanks for sharing! Part of my "plan" after leaving my high stress day job (at 57/58) is to attempt to find a part time job doing in an area of "work" I consider enjoyable - It's ok that it's low pay. Part of the appeal of doing this was working for extra income and the opportunity to interact with other people - especially if the "job" involves dealing with people who may already be in a "happy" zone - say selling/scooping ice cream :) I don't really want to scoop ice cream (I'd rather work with "bakery") but the idea is the same.

My calculations say I have enough - but I admit I'm a bit hesitant because of the 7 or 8 years of "big savings/investments" I could sock away if I maintained a high stress/big income job "until 65" seems important (the "must save as much as possible!" mind set) . I guess it's a case of "one more year". :)

That "how will working perhaps serial part time jobs really play out" is a stressor... the OP has made me feel a little bit better about the decision/idea of working once I'm out of the rat race.
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Re: For those pondering early or even mid-life retirement

Post by friar1610 »

sailaway wrote: Fri May 14, 2021 9:27 am
absolute zero wrote: Fri May 14, 2021 9:14 am
fortunefavored wrote: Fri May 14, 2021 9:00 am I just pulled the plug in January mid-late 40s. The part-time math never made any sense to me from a financial sense - you made $152K in part time work, many bogleheads make that at their full time job in 3 to 6 months. So why not just work a couple of months more?

I understand the non-financial aspects, which is fine - but from a pure numbers point of view, I don't get it. Ask me in 10 years, I guess. :)
I think the counter-point would be that most members of this forum do not make $300-$600k per year. But if they did, then yes, going PT doesn’t make much sense financially. But it might still make sense if it’s kind of fun and adds some variety to one’s life, which I think is the OP’s point.
Volunteering is a great alternative for all those non financial benefits.
That has been my experience. I’ve had a number of volunteer gigs since I’ve been retired. Don’t really need any more income (although a bit more would certainly be OK) and prefer to “work” for free and on my own terms.
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Re: For those pondering early or even mid-life retirement

Post by bmjohnson35 »

I volunteer a few hours a week at a local non-profit museum. The type of work I do is extremely flexible. As stated earlier, when you are retired, you choose how much you want to work and/or volunteer. My wife works part-time at a local bakery. She enjoys the work and social interaction. The one caveat is if you plan to use the ACA, you have to watch your reportable income. If yes and you intend to take advantage of its subsidies, too much income can be an issue. Even rebalancing your non-retirement investments impact your reported income for the year.
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

goblue100 wrote: Fri May 14, 2021 10:16 am
HuckFinn wrote: Thu May 13, 2021 9:41 pm
In the combined 24 years of retirement we have earned just over $152,000. At... a guesstimate of $10 per hour that breaks down to only about 12 hours of work for each one of us per week. We have gone through periods where one of us worked, the other didn't. Or periods where I presently do not work but my wife has worked part time for four years.
The math on this never made sense to me. You've spent 15,200 hours working at menial jobs. Now, maybe those have been good experiences, I can't judge that but you could have presumably made the $152,000 in something like 3000 hours(guessing) at your other job. Freeing up 12,000 hours of your retirement. I guess drying cars at a car wash or being a checker at a megamart might be fulfilling , but personally I'd rather sit in the back yard with a good book.


Edit: Looks like fortunefavored beat me to this point, I should have read the rest of the thread first.
The only way I can explain it is for us there is Logical Math but there is also Mental Health and Relationship Math. Yes, in 24 years combined retired 15,200 hours at a part time job seems like it would have chipped away at the time. However, there's a lot of time when you hang up the full-time gig.
If you exclude 10 hours per day for sleeping and eating the two of us racked up a combined 122,640 free hours in those 24 years. That's not only a lot of time but it's also a lot of time to be together 24/7. One really great advantage we have noticed is also the positive effect on our marriage. When you're together all the time talking about experiences is difficult. However, with us each having new experiences it drives healthier conversation and... at least in our case those small windows apart help the relationship when we're together.
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Re: For those pondering early or even mid-life retirement

Post by secondopinion »

Kenkat wrote: Fri May 14, 2021 8:28 am If working at a tanning salon and wife working at a donut shop is not nirvana, I don’t know what is. :wink:
A mathematical research position maybe? Happiness comes in many forms.
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Re: For those pondering early or even mid-life retirement

Post by Kenkat »

secondopinion wrote: Fri May 14, 2021 12:00 pm
Kenkat wrote: Fri May 14, 2021 8:28 am If working at a tanning salon and wife working at a donut shop is not nirvana, I don’t know what is. :wink:
A mathematical research position maybe? Happiness comes in many forms.
Sure, there is more than one path to nirvana :D
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Re: For those pondering early or even mid-life retirement

Post by Wannaretireearly »

HuckFinn wrote: Fri May 14, 2021 11:57 am
goblue100 wrote: Fri May 14, 2021 10:16 am
HuckFinn wrote: Thu May 13, 2021 9:41 pm
In the combined 24 years of retirement we have earned just over $152,000. At... a guesstimate of $10 per hour that breaks down to only about 12 hours of work for each one of us per week. We have gone through periods where one of us worked, the other didn't. Or periods where I presently do not work but my wife has worked part time for four years.
The math on this never made sense to me. You've spent 15,200 hours working at menial jobs. Now, maybe those have been good experiences, I can't judge that but you could have presumably made the $152,000 in something like 3000 hours(guessing) at your other job. Freeing up 12,000 hours of your retirement. I guess drying cars at a car wash or being a checker at a megamart might be fulfilling , but personally I'd rather sit in the back yard with a good book.


Edit: Looks like fortunefavored beat me to this point, I should have read the rest of the thread first.
The only way I can explain it is for us there is Logical Math but there is also Mental Health and Relationship Math. Yes, in 24 years combined retired 15,200 hours at a part time job seems like it would have chipped away at the time. However, there's a lot of time when you hang up the full-time gig.
If you exclude 10 hours per day for sleeping and eating the two of us racked up a combined 122,640 free hours in those 24 years. That's not only a lot of time but it's also a lot of time to be together 24/7. One really great advantage we have noticed is also the positive effect on our marriage. When you're together all the time talking about experiences is difficult. However, with us each having new experiences it drives healthier conversation and... at least in our case those small windows apart help the relationship when we're together.
Like this. It doesn't have to be all or nothing. Spend a few years travelling, then pt job, volunteer etc.
This time next year, we'll be millionaires!
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Re: For those pondering early or even mid-life retirement

Post by Skye Lee »

CalWatch,
Can you expand or point me in the direction of applicable posts regarding your comment that after a year, the ability to contribute is lost forever? Does that mean if you stop working for a year, you'll no longer be able to contribute if you return to work?
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Re: For those pondering early or even mid-life retirement

Post by HuckFinn »

secondopinion wrote: Fri May 14, 2021 12:00 pm
Kenkat wrote: Fri May 14, 2021 8:28 am If working at a tanning salon and wife working at a donut shop is not nirvana, I don’t know what is. :wink:
A mathematical research position maybe? Happiness comes in many forms.
:happy :sharebeer :happy
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Re: For those pondering early or even mid-life retirement

Post by calwatch »

Skye Lee wrote: Fri May 14, 2021 2:06 pm CalWatch,
Can you expand or point me in the direction of applicable posts regarding your comment that after a year, the ability to contribute is lost forever? Does that mean if you stop working for a year, you'll no longer be able to contribute if you return to work?
What I mean is that the contribution limits are annual and so you can't turn back time and contribute for past years (with the limited exception of the 401k pre-retirement "double up" catch up). So if you didn't have earned income in a particular year, you couldn't contribute to a Roth, and as such missed the opportunity to transfer $6,000 of taxable investments into Roth so the growth on those can never be taxed. Now, if you are already spending down tax advantaged funds, it doesn't really matter, but I do plan working for a few months just so I can continue contributing to Roth. Of course, if you stop working for a year, and start working again the next year, you can contribute to Roth once you resume working.
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Re: For those pondering early or even mid-life retirement

Post by Skye Lee »

Thanks CalWatch - I appreciate the clarification.
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Re: For those pondering early or even mid-life retirement

Post by calwatch »

Marseille07 wrote: Fri May 14, 2021 10:53 am You already seem to have 40x saved up, no need for BaristaFIRE. The term doesn't even make sense because BaristaFIRE is neither FI nor RE. It's a shoe-horned term for those accumulated 15x~20x and want to downshift while collecting healthcare benefits.
The comparison I was making is to work the same amount of time with health benefits, which may allow for higher amount of Roth conversions, compared with a job or activities that don't have health benefits and so require management of income to make the ACA subsidies work. Under current law the ACA subsidy functions as a 2-8.5% tax, except at the low end where the "tax" is higher if you consider the value of a Silver cost sharing plan. This is true up to the point where you make so much that the subsidy is zeroed out. And, under previous law there was the infamous ACA cliff. Of course, if you don't Roth convert, then there is the RMD tax torepdo, and if you wait until you are eligible for Medicare, then conversions could also put you in the IRMAA zone for a 3.7% effective tax (between $176,000 and $330,000, assuming both spouses are Medicare beneficiaries).

If you live in an area where health premiums are affordable, or are eligible for retiree health care pre-Medicare, this may not be such a big issue.

Edit for an example: a single person, age 49, with a AGI of $22,500 (so up to the top of the 10% tax bracket) in eastern Los Angeles County would pay $20 a month, or $240 a year, for health coverage with premium tax credits, which would be a Silver 87 since their income is between 150-200% of FPL. If they make a $30,000 Roth conversion, they would pay 12% federal tax on that $30,000, about $1,430 more in state income tax (due to California's highly progressive tax system, they are still not at the middle income 9.3% tax bracket), and receive $4,200 less in premium tax credits, as well as either pay higher co payments for a normal Silver 70 or a higher premium for a gold or platinum plan more comparable to the Silver 87.

At Starbucks, working an average of 20 hours a week, you can purchase Silver coverage (slightly better than the ACA Silver plan offered in CA) for $40 a pay period, or $1,040 a year. In California, you are likely making $15 an hour, so your pay for working those 20 hours a week is $15,000 a year. But, having health insurance, you could convert Roth up to the top of the 15% bracket, with no impact to premium tax credits. https://cache.hacontent.com/ybr/R516/06 ... ads/MG.pdf

If you worked those $15,000 in a job without health insurance, and had no other income you would be Medicaid eligible. If you worked 195 "engaged" hours per quarter in a Proposition 22 gig work covered job (Uber, Lyft, Doordash, Instacart), you would get a flat $205 a month subsidy, which well exceeds the premium at 138% of FPL (and, under the law, you can pocket the difference as it functionally is a bonus on a weekly payout). However, that $205 will be swamped by the $370 month premium without the premium tax credit.
Last edited by calwatch on Fri May 14, 2021 4:32 pm, edited 1 time in total.
marcopolo
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Re: For those pondering early or even mid-life retirement

Post by marcopolo »

The fact that people have diverse interests and goals makes the world a more interesting place.

The title seem to be urging all early retirees to consider this approach.

For me, i spent many years in college so I would not have to work at $10/hr retail job. Doing so in retirement has exactly Zero appeal to me. If I felt I needed that extra cushion, i would have worked an extra year in the career I chose and enjoyed.

I have no problems filling my time, finding social interaction, or finding purposeful things to do with my life. I guess if one needs a part time retail job to fill any of those needs, this approach might make sense.
Once in a while you get shown the light, in the strangest of places if you look at it right.
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Re: For those pondering early or even mid-life retirement

Post by Wannaretireearly »

marcopolo wrote: Fri May 14, 2021 3:29 pm The fact that people have diverse interests and goals makes the world a more interesting place.

The title seem to be urging all early retirees to consider this approach.

For me, i spent many years in college so I would not have to work at $10/hr retail job. Doing so in retirement has exactly Zero appeal to me. If I felt I needed that extra cushion, i would have worked an extra year in the career I chose and enjoyed.

I have no problems filling my time, finding social interaction, or finding purposeful things to do with my life. I guess if one needs a part time retail job to fill any of those needs, this approach might make sense.
Fair point. I don't think anyone here will be a Walmart greeter. However, it would be fun to try some different jobs which seem interesting, meet people, help people,etc. And can be dropped anytime. Ski instructor, gym club greeter, sommelier, park ranger/helper, winery wine pourer :D etc
This time next year, we'll be millionaires!
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Re: For those pondering early or even mid-life retirement

Post by marcopolo »

Wannaretireearly wrote: Fri May 14, 2021 4:50 pm
marcopolo wrote: Fri May 14, 2021 3:29 pm The fact that people have diverse interests and goals makes the world a more interesting place.

The title seem to be urging all early retirees to consider this approach.

For me, i spent many years in college so I would not have to work at $10/hr retail job. Doing so in retirement has exactly Zero appeal to me. If I felt I needed that extra cushion, i would have worked an extra year in the career I chose and enjoyed.

I have no problems filling my time, finding social interaction, or finding purposeful things to do with my life. I guess if one needs a part time retail job to fill any of those needs, this approach might make sense.
Fair point. I don't think anyone here will be a Walmart greeter. However, it would be fun to try some different jobs which seem interesting, meet people, help people,etc. And can be dropped anytime. Ski instructor, gym club greeter, sommelier, park ranger/helper, winery wine pourer :D etc
Is a gym club greeter somehow more fullfiling than a Wal-Mart greeter?!?
Once in a while you get shown the light, in the strangest of places if you look at it right.
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