Why NOT make more money?

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flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Sun Nov 12, 2017 7:04 pm

JDCarpenter wrote:
Sun Nov 12, 2017 3:07 pm
First, interesting thread--the first one I've read since we returned from our first real retirement trip... (ages 57/56, and both enjoyed our jobs: litigation attorney and OBG)

As others have mentioned, you don't really look like you are in a position to retire yet--and query if you yourself would be ok sleeping on the airport floor in 15 years?

We worked extra 2 years to enable DW's group to find a replacement for her (on top of an extra couple of years to make sure we had clean margins!) As a result, to keep our spending at the preretirement level would only take 2.3% of portfolio. Instead, we have an upper limit of 4% m/l. When equities crash, we have a lot of room to fall back to what was a pretty nice lifestyle to begin with. (And I'm still not counting social security, which is likely another substantial cushion.)

In the meantime, we are in a position to not fret about cost of travel. First trip was 8 weeks in Peru. Still traveled pretty cheap, no checked bags and accommodations tended to be full of twenty-something Europeans rather than affluent retirees. But, it was nice to be able to book intracountry flights without worrying about costs. So too, adding on private guides for a few added jaunts was nice, and trying the various "top restaurants in the world" in Miraflores. In the midst of planning Jan/Feb in Caribbean, have south pacific 80% booked for most of three months next summer, and are debating whether Antarctica is 2018-19, or a year later.... Again, this shoots way past what we ever spent before (save for the years when all three kids were in college).

While working, we had 1 week of dive travel a year (with three exceptional 2 week trips in 27 years) and I worked nearly every weekend day and holiday; thus, much deferred travel, for which the extra dollars are nice. Just guessing that your wife, like mine, will want business class seats on trans-pacific flights; and that you will before too long!

Of course, this is highly subjective. We have the travel bug, don't get homesick, and were lucky that our physical conditioning work wasn't torpedoed by accident/disease/death. It's life: you pays/saves your money, and you takes your chances.
We have been doing travels these days. My wife only have about 4~5 weeks of vacation time each year. So some of the travels I did was solo. We will be in Peru in May 2018 for a 10 day trip.
Hope you both enjoy your retirement.

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TheTimeLord
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Re: Why NOT make more money?

Post by TheTimeLord » Sun Nov 12, 2017 8:08 pm

JDCarpenter wrote:
Sun Nov 12, 2017 3:07 pm
While working, we had 1 week of dive travel a year (with three exceptional 2 week trips in 27 years)
Maybe we will cross paths on a boat someday in the future.
Run, You Clever Boy! 8723

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White Coat Investor
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Re: Why NOT make more money?

Post by White Coat Investor » Sun Nov 12, 2017 8:42 pm

flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
There is a thread about "why make more money"? So this one is to discuss about the other side of the story. For myself, I am actually in the middle and in a difficult situation to go either way.

Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.

So why NOT make more money?

The potential problem for me is: Why not make more money to fly in business class, to slow travel overseas in good hotels 6 months every year, to eat lobsters every week, and to buy a luxury car every three years?
This is a really interesting thread because it very much applies to people in my situation. We're basically in between the point where we have enough to retire to a very reasonable level of spending, but not quite the level of spending we'd like to retire to. So at this point, at least for those who would rather not be working, you're faced with a quandary- how much longer do you stick it out in order to get more of your wants later. It's a very tricky, philosophical, first-world problem.

Not sure there's a right answer, which is what makes for such a great thread. But one helpful calculation is to figure out how much more you can spend per year for each additional year you work. For instance, let's say you have $2M now and put away $40K a year. So you can retire now on $80K, or you can work one more year and retire on $85,600 a year. Or you can work two more years and retire on $91,500. etc. Difficult questions.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

marcopolo
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Re: Why NOT make more money?

Post by marcopolo » Sun Nov 12, 2017 10:25 pm

flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
There is a thread about "why make more money"? So this one is to discuss about the other side of the story. For myself, I am actually in the middle and in a difficult situation to go either way.

Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.

So why NOT make more money?

The potential problem for me is: Why not make more money to fly in business class, to slow travel overseas in good hotels 6 months every year, to eat lobsters every week, and to buy a luxury car every three years?
Interesting discussion in both of these threads.

We are pretty much in the same situation. Early 50s, I think we are FI (discussion for another day), but i hope to continue to work a little bit longer. This is mainly because a few years ago we realized we were getting close to our financial goals and decided to plan our retirement around life events and our desired lifestyle, rather than a financial target (no specific "number"). We still have a child in HS. Our plan is to retire as soon as he graduates high school in 1.5 years. We will then have more freedom to move to our chosen retirement destination (don't want to uproot him now), time to take longer trips, etc. In the mean time, I enjoy my job (would not go as far as to say i love it). But, it is low stress, lots of flexibility, and pays well. so I see no reason to give it up until we are ready to take the plunge, time frame wise.

We have also made sure we have balanced work with enjoying life. Lots of great vacations to far reaches of the planet. Never really passed up doing anything we wanted to do because of saving goals. We spend freely on experiences, but live relatively frugally when it comes to things. So, working a little longer than may be financially necessary does not seem like much of sacrifice, and a little extra cushion "just in case" should help the SWAN factor when I do finally pull the trigger on retirement soon.


EDIT: Even with all the discussion about the hitting certain financial goals to trigger retirement, I wonder if many (most) still end up timing their retirement more based on life events (loss of job, illness, death in family, seeing contemporaries get sick, etc.) rather than a financial goalpost like 25x? Perhaps fodder for another thread in the future.
Once in a while you get shown the light, in the strangest of places if you look at it right.

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Sun Nov 12, 2017 10:38 pm

White Coat Investor wrote:
Sun Nov 12, 2017 8:42 pm
This is a really interesting thread because it very much applies to people in my situation. We're basically in between the point where we have enough to retire to a very reasonable level of spending, but not quite the level of spending we'd like to retire to. So at this point, at least for those who would rather not be working, you're faced with a quandary- how much longer do you stick it out in order to get more of your wants later. It's a very tricky, philosophical, first-world problem.

Not sure there's a right answer, which is what makes for such a great thread. But one helpful calculation is to figure out how much more you can spend per year for each additional year you work. For instance, let's say you have $2M now and put away $40K a year. So you can retire now on $80K, or you can work one more year and retire on $85,600 a year. Or you can work two more years and retire on $91,500. etc. Difficult questions.
I was doing similar calculations in my mind. For example, my original plan is to downsize my house so that we can reduce recurring property tax. In I have additional $100,000 in my portfolio, then I got that covered.

TheNightsToCome
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Re: Why NOT make more money?

Post by TheNightsToCome » Sun Nov 12, 2017 10:45 pm

White Coat Investor wrote:
Sun Nov 12, 2017 8:42 pm
flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
There is a thread about "why make more money"? So this one is to discuss about the other side of the story. For myself, I am actually in the middle and in a difficult situation to go either way.

Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.

So why NOT make more money?

The potential problem for me is: Why not make more money to fly in business class, to slow travel overseas in good hotels 6 months every year, to eat lobsters every week, and to buy a luxury car every three years?
This is a really interesting thread because it very much applies to people in my situation. We're basically in between the point where we have enough to retire to a very reasonable level of spending, but not quite the level of spending we'd like to retire to. So at this point, at least for those who would rather not be working, you're faced with a quandary- how much longer do you stick it out in order to get more of your wants later. It's a very tricky, philosophical, first-world problem.

Not sure there's a right answer, which is what makes for such a great thread. But one helpful calculation is to figure out how much more you can spend per year for each additional year you work. For instance, let's say you have $2M now and put away $40K a year. So you can retire now on $80K, or you can work one more year and retire on $85,600 a year. Or you can work two more years and retire on $91,500. etc. Difficult questions.
"For instance, let's say you have $2M now and put away $40K a year."

You probably mean $140K, instead of $40K.

Let's say you have $2.4-2.5M liquid, and your job is so demanding that your overall quality of life is fairly low. You're living to work, not working to live--and that is the nature of the job. You can't achieve "better work-life balance" by spending more. The problem isn't spending too little, it's working too hard. On the other hand, you're saving about $360K/year, so every OMY makes a big difference to your ultimate retirement.

Further, you think a 4% SWR isn't safe at all. You're a 3% guy, and you expect health insurance premiums to exceed $25,000/year pre-Medicare.

Would you continue to slave away and hope you will be lucky enough to still enjoy a longish, healthy-enough retirement, but take the chance that you'll be one of the many unlucky folks who fall ill or die before their time?

EnjoyIt
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Re: Why NOT make more money?

Post by EnjoyIt » Mon Nov 13, 2017 12:12 am

White Coat Investor wrote:
Sun Nov 12, 2017 8:42 pm

Not sure there's a right answer, which is what makes for such a great thread. But one helpful calculation is to figure out how much more you can spend per year for each additional year you work. For instance, let's say you have $2M now and put away $40K a year. So you can retire now on $80K, or you can work one more year and retire on $85,600 a year. Or you can work two more years and retire on $91,500. etc. Difficult questions.
This is exactly it. How much longer is one willing to work for that extra bit of cash. If you are 45 years old, working a few more years is may not be big deal. But what about if you are 65 or 70. This becomes even more extreme for high income earners and savers.

Compare 2 families both with $2.5 million in invested assets living on $100k/yr one is 45 years old saving $180k/yr while the other is 65 years old saving $18k/yr. One more year for the 45 year old seams like it makes more sense as each year substantially increases their net worth and their spending ability. Also the 45 year old has 20 more years before medicare and likely 25 more years before social security. The 65 year old on the other hand has less time on this earth and one more year makes up a more significant percentage of that. Plus they have health insurance covered and not that far off from social security to help out if needed.

Although I am in the 4% camp with the intention to adjust spending if needed, one of the things I like about the 3% withdrawal rate is that it will almost certainly lead to increased wealth over the years which will allow for increasing your spending as time goes on.

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White Coat Investor
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Re: Why NOT make more money?

Post by White Coat Investor » Mon Nov 13, 2017 2:08 am

TheNightsToCome wrote:
Sun Nov 12, 2017 10:45 pm
White Coat Investor wrote:
Sun Nov 12, 2017 8:42 pm
flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
There is a thread about "why make more money"? So this one is to discuss about the other side of the story. For myself, I am actually in the middle and in a difficult situation to go either way.

Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.

So why NOT make more money?

The potential problem for me is: Why not make more money to fly in business class, to slow travel overseas in good hotels 6 months every year, to eat lobsters every week, and to buy a luxury car every three years?
This is a really interesting thread because it very much applies to people in my situation. We're basically in between the point where we have enough to retire to a very reasonable level of spending, but not quite the level of spending we'd like to retire to. So at this point, at least for those who would rather not be working, you're faced with a quandary- how much longer do you stick it out in order to get more of your wants later. It's a very tricky, philosophical, first-world problem.

Not sure there's a right answer, which is what makes for such a great thread. But one helpful calculation is to figure out how much more you can spend per year for each additional year you work. For instance, let's say you have $2M now and put away $40K a year. So you can retire now on $80K, or you can work one more year and retire on $85,600 a year. Or you can work two more years and retire on $91,500. etc. Difficult questions.
"For instance, let's say you have $2M now and put away $40K a year."

You probably mean $140K, instead of $40K.

Let's say you have $2.4-2.5M liquid, and your job is so demanding that your overall quality of life is fairly low. You're living to work, not working to live--and that is the nature of the job. You can't achieve "better work-life balance" by spending more. The problem isn't spending too little, it's working too hard. On the other hand, you're saving about $360K/year, so every OMY makes a big difference to your ultimate retirement.

Further, you think a 4% SWR isn't safe at all. You're a 3% guy, and you expect health insurance premiums to exceed $25,000/year pre-Medicare.

Would you continue to slave away and hope you will be lucky enough to still enjoy a longish, healthy-enough retirement, but take the chance that you'll be one of the many unlucky folks who fall ill or die before their time?
Nah, I was counting on a 5% return on the $2M already invested.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Mon Nov 13, 2017 9:03 am

I am actually an early retirement advocate, but I do not want to have a bare-bone retirement. I do not want to feel stressful about money in retirement. No, I will not do slavery work. If I have anything very important that I want to do and my job gets in the way, I will do that.

But, absent from those important things coming up, why NOT make more money?

TheHouse7
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Re: Why NOT make more money?

Post by TheHouse7 » Mon Nov 13, 2017 9:15 am

AZAttorney11 wrote:
Fri Nov 10, 2017 5:43 pm
I don't understand the line of reasoning that you are giving up a year of your life if you continue working. Do all of you work in sweatshops that forbid time off on the weekends, prevent long vacations once or twice a year, and ignore holidays like Thanksgiving and Christmas? It's okay to travel overseas, eat good food, and enjoy life while you are working, even during the week. There's no need to make this a pure work vs. pure leisure argument.
+1 I often remember my temp/manual labor jobs 70+ hours a week years ago. My current line of work is a constant vacation. 40 hours+ on call overtime + call out pay+ crazy benifits
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

wrongfunds
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Re: Why NOT make more money?

Post by wrongfunds » Mon Nov 13, 2017 10:22 am

Compare 2 families both with $2.5 million in invested assets living on $100k/yr one is 45 years old saving $180k/yr while the other is 65 years old saving $18k/yr. One more year for the 45 year old seams like it makes more sense as each year substantially increases their net worth and their spending ability. Also the 45 year old has 20 more years before medicare and likely 25 more years before social security. The 65 year old on the other hand has less time on this earth and one more year makes up a more significant percentage of that. Plus they have health insurance covered and not that far off from social security to help out if needed.
Your example makes the choice pretty clear for both the cases. A more interesting case might be somebody with age 58 and saving $100K per year. We can keep the other numbers the same.

EnjoyIt
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Re: Why NOT make more money?

Post by EnjoyIt » Mon Nov 13, 2017 10:57 am

wrongfunds wrote:
Mon Nov 13, 2017 10:22 am
Compare 2 families both with $2.5 million in invested assets living on $100k/yr one is 45 years old saving $180k/yr while the other is 65 years old saving $18k/yr. One more year for the 45 year old seams like it makes more sense as each year substantially increases their net worth and their spending ability. Also the 45 year old has 20 more years before medicare and likely 25 more years before social security. The 65 year old on the other hand has less time on this earth and one more year makes up a more significant percentage of that. Plus they have health insurance covered and not that far off from social security to help out if needed.
Your example makes the choice pretty clear for both the cases. A more interesting case might be somebody with age 58 and saving $100K per year. We can keep the other numbers the same.
Personally if I was 58 and the $100k/yr provides a comfortable retirement with the ability to cut it down to $75-$85k for a year or two if I really had to, I would definitely retire. Actually what I would do is offer my employer my services part time either 3 days a week, or preferably allow me to take 8-10 weeks vacation most of it unpaid and if they don't agree I would then retire. The reason why I would do this is because I really like the idea of transitioning into retirement and not jump in head first. It would be perfect, work 6-8 weeks then 2 weeks off. 2 week vacation are awesome.

The above is if the $100k is a 4% withdrawal. If it is 3% I would have retired last year. If it is 3.5% I would retire without going part time unless I really loved my job. I mean really really loved it.

wrongfunds
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Re: Why NOT make more money?

Post by wrongfunds » Mon Nov 13, 2017 11:29 am

I hope you do not mind continuing this along the same line.

If we assume that $100K are the actual expenses before the retirement, they do NOT include full health-care costs nor the taxes paid on that income. Remember, the actual expenses came off after paying the taxes and after saving the money. This also means the couple's income must be reasonably high to allow $100K income, $100K savings and possibly $100K in total taxes.

The $2.5M invest-able assets only gives $100K at 4% and that does NOT include taxes to be paid.

Now to drop that to 3% rate they would have to have $3.3M in their kitty and if they are pulling in $300K per year in salary, would they be able to stop now or decide to keep on working towards the new magic number of $3.3M for "few more years"?

Another BH question would be "Does the $100K include business class or the cattle class many trips?" Remember, currently, couple is limited in their travel because they have limited vacation. Now they start believing that $100K just does not cut it.

All of this seems somewhat rational but unless one really puts a stop on these kind of thoughts, the couple will never know when to get off the grind train and would just end up plowing lots of money in taxes rather than enjoying the retirement.

When to call it "Enough" does not have an easy answer.

EnjoyIt
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Re: Why NOT make more money?

Post by EnjoyIt » Mon Nov 13, 2017 12:49 pm

wrongfunds wrote:
Mon Nov 13, 2017 11:29 am
I hope you do not mind continuing this along the same line.

If we assume that $100K are the actual expenses before the retirement, they do NOT include full health-care costs nor the taxes paid on that income. Remember, the actual expenses came off after paying the taxes and after saving the money. This also means the couple's income must be reasonably high to allow $100K income, $100K savings and possibly $100K in total taxes.

The $2.5M invest-able assets only gives $100K at 4% and that does NOT include taxes to be paid.

Now to drop that to 3% rate they would have to have $3.3M in their kitty and if they are pulling in $300K per year in salary, would they be able to stop now or decide to keep on working towards the new magic number of $3.3M for "few more years"?

Another BH question would be "Does the $100K include business class or the cattle class many trips?" Remember, currently, couple is limited in their travel because they have limited vacation. Now they start believing that $100K just does not cut it.

All of this seems somewhat rational but unless one really puts a stop on these kind of thoughts, the couple will never know when to get off the grind train and would just end up plowing lots of money in taxes rather than enjoying the retirement.

When to call it "Enough" does not have an easy answer.
1st off, there is a great possibility that this couple will not pay any taxes living on $100k/yr. It may be best to run a practice tax year on expected withdrawal. Account for dividends, capital gains tax, Roth and pre tax retirement account withdrawals as well as all available deductions. Remember that long term capital gains and dividends are taxed at 0% in the 15% tax bracket. A couple needs to have an income of over $75,900 before hitting that. Add in the standard deduction and personal exemption of $20800 and this couple can have an income of $96700, also include any potential tax loss harvesting that has been carried forward for another potential $3000. And that is if all their wealth is in taxable accounts. Roth withdrawals are tax free, and taxable account withdrawals are only taxed on gains and not the principal. Traditional IRA/401k/etc are taxed at marginal rates but a couple should be able to withdraw up to their deductions tax free. At worst the couple may have to pay 10% or less in taxes on some withdrawals. Livesoft has a great post talking about pulling $100k per year and paying $0 taxes.

Next, if this couple is spending $100k and working they will need to remove some of those expenses related to work. For example commuting, work clothes and food as well as any other work related expenses. That can provide for a few more travel expenses. As for your question regarding first class vs economy/cattle. Lets just assume in our example $100k can only afford economy flights we can convert this into mathematical terms. Lets first agree that flying first class is not worth it in the US unless it is offered at a substantial discount. But maybe first class has value flying overseas. The premium on a one way first class ticket to Europe seams to be $2k-$3k each leg or $8k-$12k per flight for 2 people. Lets take the average and use $10K. And lets assume this couple will travel overseas 2x per year for an extra $20k in expenses which will require an extra $500k in investments to support at 4% withdrawal. If this couple currently has $2.5 million and they are saving $100k/yr like you mentioned it will take 26 months at 5% growth to attain the extra $500k. 26 months working 40 hours per week is equal to 113 weeks worth of work or an extra 4519 hours of work. Is 4519 extra hours of work worth being more comfortable for 8-10 hours 4 times a year? Only that couple can decide what they value. More than likely they will be able to fly first class sometimes because they will find deals every now and then as well as be able to use miles since they like to travel so much. Lastly, once social security kicks in they should be able to fly first class from there on if that is so important to them.

There is no limit to how much one can spend. At some point we need to decide is the extra thousands of hours working worth it.
Last edited by EnjoyIt on Mon Nov 13, 2017 1:20 pm, edited 2 times in total.

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David Jay
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Re: Why NOT make more money?

Post by David Jay » Mon Nov 13, 2017 1:10 pm

flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.
When you are close-to or right-at FI, a year or two can make a big difference. It is a "double whammy" of both getting another year of savings/growth plus not spending down your portfolio.

In my case, there was "no way" to retire at 60, but we will retire comfortably at 62. Two less years of living expenses was huge for us...
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

TheNightsToCome
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Re: Why NOT make more money?

Post by TheNightsToCome » Mon Nov 13, 2017 1:18 pm

EnjoyIt wrote:
Mon Nov 13, 2017 12:49 pm
wrongfunds wrote:
Mon Nov 13, 2017 11:29 am
I hope you do not mind continuing this along the same line.

If we assume that $100K are the actual expenses before the retirement, they do NOT include full health-care costs nor the taxes paid on that income. Remember, the actual expenses came off after paying the taxes and after saving the money. This also means the couple's income must be reasonably high to allow $100K income, $100K savings and possibly $100K in total taxes.

The $2.5M invest-able assets only gives $100K at 4% and that does NOT include taxes to be paid.

Now to drop that to 3% rate they would have to have $3.3M in their kitty and if they are pulling in $300K per year in salary, would they be able to stop now or decide to keep on working towards the new magic number of $3.3M for "few more years"?

Another BH question would be "Does the $100K include business class or the cattle class many trips?" Remember, currently, couple is limited in their travel because they have limited vacation. Now they start believing that $100K just does not cut it.

All of this seems somewhat rational but unless one really puts a stop on these kind of thoughts, the couple will never know when to get off the grind train and would just end up plowing lots of money in taxes rather than enjoying the retirement.

When to call it "Enough" does not have an easy answer.
1st off, there is a great possibility that this couple will not pay any taxes living on $100k/yr. It may be best to run a practice tax year on expected withdrawal. Account for dividends, capital gains tax, Roth and pre tax retirement account withdrawals as well as all available deductions. Remember that long term capital gains and dividends are taxed at 0% in the 15% tax bracket. A couple needs to have an income of over $75,900 before hitting that. Add in the standard deduction and personal exemption of $20800 and this couple can have an income of $96700, also include any potential tax loss harvesting that has been carried forward for another potential $3000. And that is if all their wealth is in pre-tax accounts. Roth withdrawals are tax free, and taxable account withdrawals are only taxed on gains and not the principal. Plus if one was to have some interest from tax-exempt bond funds in their taxable account you can see how they can withdraw even more before paying a cent in taxes. Very likely this couple could even do some Roth conversions until they start collecting social security.

Next, if this couple is spending $100k and working they will need to remove some of those expenses related to work. For example commuting, work clothes and food as well as any other work related expenses. That can provide for a few more travel expenses. As for your question regarding first class vs economy/cattle. Lets just assume in our example $100k can only afford economy flights we can convert this into mathematical terms. Lets first agree that flying first class is not worth it in the US unless it is offered at a substantial discount. But maybe first class has value flying overseas. The premium on a one way first class ticket to Europe seams to be $2k-$3k each leg or $8k-$12k per flight for 2 people. Lets take the average and use $10K. And lets assume this couple will travel overseas 2x per year for an extra $20k in expenses which will require an extra $500k in investments to support at 4% withdrawal. If this couple currently has $2.5 million and they are saving $100k/yr like you mentioned it will take 26 months at 5% growth to attain the extra $500k. 26 months working 40 hours per week is equal to 113 weeks worth of work or an extra 4519 hours of work. Is 4519 extra hours of work worth being more comfortable for 8-10 hours 4 times a year? Only that couple can decide what they value. More than likely they will be able to fly first class sometimes because they will find deals every now and then as well as be able to use miles since they like to travel so much. Lastly, once social security kicks in they should be able to fly first class from there on if that is so important to them.
In my case there won't be any savings related to work-related expenses. I drive less than 5 miles to work with no traffic and will probably drive more in retirement. My wife packs my lunch, and I have no significant wardrobe expenses.

On the other hand, if I retired last year my health care premium expense would have risen by $21,360/year, and that doesn't include the increased expense I'd incur for dental/periodontal/vision. That spread is undoubtedly much higher this year (but I haven't looked for a quote this year), and looks likely to increase much faster than inflation going forward. Some areas have 40% year-over-year increases in healthcare premiums.

I think it's difficult to retire with confidence before Medicare unless you are very rich indeed. It may work out, but it isn't hard to imagine scenarios that involve significant hardship.

WhiteMaxima
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Re: Why NOT make more money?

Post by WhiteMaxima » Mon Nov 13, 2017 1:46 pm

Working and making money is part of life. Retirement and do nothing is also. So have settle in between. If you budget falling short and want to retire earlier, that's fine if you cut spending and adjust your life style. If want a life style like King and your solely depend on emplyment like most of Boglehead here, then there will be never enough. 90% of the population live on this planet don't have 100k a year income to live.

wrongfunds
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Re: Why NOT make more money?

Post by wrongfunds » Mon Nov 13, 2017 1:50 pm

There is no limit to how much one can spend. At some point we need to decide is the extra thousands of hours working worth it.
You have no idea how much I actually agree with you on this point!

By the way, I was talking about "lowly" business class there but your calculations used first class airfare. I hope coming down a notch to business class will make your argument even more persuasive.

Back to the original point of the topic. Taken individually, many of the "what if ..." are reasonable and rational e.g. spike in expenses, high cost of medical coverage, long term care, assisted living, kid's big marriages, bad sequence of returns, dollar devaluation, Japan style market crash etc etc But if you want to account for each and every one of them, there is no way to stop accumulating for all those "what if ...".

The question which needs to be honestly answered is:- "Are you ready to start decumulating and ready to see your asset dwindle every single year?" That needs to be answered unequivocally in affirmative.

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Mon Nov 13, 2017 2:43 pm

wrongfunds wrote:
Mon Nov 13, 2017 1:50 pm
There is no limit to how much one can spend. At some point we need to decide is the extra thousands of hours working worth it.
You have no idea how much I actually agree with you on this point!

By the way, I was talking about "lowly" business class there but your calculations used first class airfare. I hope coming down a notch to business class will make your argument even more persuasive.

Back to the original point of the topic. Taken individually, many of the "what if ..." are reasonable and rational e.g. spike in expenses, high cost of medical coverage, long term care, assisted living, kid's big marriages, bad sequence of returns, dollar devaluation, Japan style market crash etc etc But if you want to account for each and every one of them, there is no way to stop accumulating for all those "what if ...".

The question which needs to be honestly answered is:- "Are you ready to start decumulating and ready to see your asset dwindle every single year?" That needs to be answered unequivocally in affirmative.
I would say that: When the money is not worth my effort to make it, that is enough. I could have lobsters and hamburgers, but I can only eat that much. For someone with a stressful work environment, it is easy to make the decision. For others, may not.

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Mon Nov 13, 2017 2:44 pm

WhiteMaxima wrote:
Mon Nov 13, 2017 1:46 pm
Working and making money is part of life. Retirement and do nothing is also. So have settle in between. If you budget falling short and want to retire earlier, that's fine if you cut spending and adjust your life style. If want a life style like King and your solely depend on emplyment like most of Boglehead here, then there will be never enough. 90% of the population live on this planet don't have 100k a year income to live.
Good comment.

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Mon Nov 13, 2017 2:46 pm

David Jay wrote:
Mon Nov 13, 2017 1:10 pm
flyingaway wrote:
Fri Nov 10, 2017 1:10 pm
Here is my situation (said before in other threads): We are in early 50s and have achieved financial independence at the comfortable level (4% rule). But my financial independence has no margin of error, i.e., no specific money budgeted for kids' wedding in the future, for slow overseas travels, etc. (only $10K is budgeted for travel), and extra cushion for sequence of return risks, etc.
When you are close-to or right-at FI, a year or two can make a big difference. It is a "double whammy" of both getting another year of savings/growth plus not spending down your portfolio.

In my case, there was "no way" to retire at 60, but we will retire comfortably at 62. Two less years of living expenses was huge for us...
I was thinking triple whammy: More more year contribution, one few year retirement support, your FI portfolio will generate one more year support. So working one more year reduces three years of retirement support.

EnjoyIt
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Re: Why NOT make more money?

Post by EnjoyIt » Mon Nov 13, 2017 5:37 pm

wrongfunds wrote:
Mon Nov 13, 2017 1:50 pm
There is no limit to how much one can spend. At some point we need to decide is the extra thousands of hours working worth it.
You have no idea how much I actually agree with you on this point!

By the way, I was talking about "lowly" business class there but your calculations used first class airfare. I hope coming down a notch to business class will make your argument even more persuasive.

Back to the original point of the topic. Taken individually, many of the "what if ..." are reasonable and rational e.g. spike in expenses, high cost of medical coverage, long term care, assisted living, kid's big marriages, bad sequence of returns, dollar devaluation, Japan style market crash etc etc But if you want to account for each and every one of them, there is no way to stop accumulating for all those "what if ...".

The question which needs to be honestly answered is:- "Are you ready to start decumulating and ready to see your asset dwindle every single year?" That needs to be answered unequivocally in affirmative.
My apologies. I meant business class in my calculations. As most flights I try and take seam to cost about $1000 coach and $3k-$4k business per leg. which is where I got the math from. Although I just checked some flights now and see some going for a $1k premium per leg

As for decumilation. If you run a 4% withdrawal rate in a retirement calculator on average most people will find their wealth double and not decrease. But yes, I can only imagine what phsycological impact it may be to transition from building wealth to living off of it.

sambb
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Re: Why NOT make more money?

Post by sambb » Mon Nov 13, 2017 9:03 pm

What about the following:
Need 100k/year, so desire to have 2.5M (4%) withdrawal.

Lets say right now in 2017, i hit 2.5M,so I could retire. Great.

Instead, lets say that i didn't check my balance. And we hit a bear market. And my 2.5M is now 2.0M
at 2.0 M in 2018 (after bear market) - my 4% won't give me 100k/year

So therefore, in one case I could retire in 2017, and in another, i couldn't.

So, to answer the OP - why not make more money? Agree. making more money gives MORE CUSHION for retirement.
Is this psychology? yes. Reality>? Who knows,

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Tue Nov 14, 2017 12:21 am

sambb wrote:
Mon Nov 13, 2017 9:03 pm
What about the following:
Need 100k/year, so desire to have 2.5M (4%) withdrawal.

Lets say right now in 2017, i hit 2.5M,so I could retire. Great.

Instead, lets say that i didn't check my balance. And we hit a bear market. And my 2.5M is now 2.0M
at 2.0 M in 2018 (after bear market) - my 4% won't give me 100k/year

So therefore, in one case I could retire in 2017, and in another, i couldn't.

So, to answer the OP - why not make more money? Agree. making more money gives MORE CUSHION for retirement.
Is this psychology? yes. Reality>? Who knows,
This is a well known problem for the 4% rule. I guess it could be explained by statistics.

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PhysicianOnFIRE
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Re: Why NOT make more money?

Post by PhysicianOnFIRE » Tue Nov 14, 2017 8:23 pm

market timer wrote:
Sat Nov 11, 2017 2:34 am
PhysicianOnFIRE wrote:
Sat Nov 11, 2017 12:33 am
Also, I'm now able to disappear for weeks at a time. My family is embarking on a three-week Spanish immersion adventure starting this Sunday. I wouldn't be able to do so if I were focused on making more money.
This is the main freedom I miss by having a job. In my ideal world, I'd have summers off to travel with the kids, at least for 6 weeks, and another 4 weeks throughout the year. Hardly any jobs offer this. Maybe after I save another million, I'll request an amendment to my contract for 10 weeks of vacation. Worth a shot.
I think you just described the schedule of a teacher. You don't need a million dollars to do that!

:beer
-PoF

bhsince87
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Re: Why NOT make more money?

Post by bhsince87 » Tue Nov 14, 2017 9:43 pm

A very interesting question and discussion! It's very timely for me.

Two years ago, our company offered an early retirement package. I was 50, my wife 48, and we had about 30X expenses saved.

My goal for years was to retire at 62. Then I lowered it to 60. Then 55. 50 just seemed too early, so I stuck with working.

It's been tolerable, but less fun than in the past.

I am hoping they offer a package this year, but I doubt it. Business is booming, and the bigger problem is finding enough workers.

But guess what: now we have 70-80X of those earlier expenses saved! Business has been good ( my salary is highly bonus based) and 30 years of investing has the compounding machine rolling in high gear.

We've upped our spending, and that has been nice! So maybe we're at 40X our new spending level.

Bottom line, those "two more years" had a significant impact on the quality of our lives.

But I think I'm done now. I don't even need a stinken package!
BH87

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Re: Why NOT make more money?

Post by flyingaway » Tue Nov 14, 2017 10:07 pm

bhsince87 wrote:
Tue Nov 14, 2017 9:43 pm
A very interesting question and discussion! It's very timely for me.

Two years ago, our company offered an early retirement package. I was 50, my wife 48, and we had about 30X expenses saved.

My goal for years was to retire at 62. Then I lowered it to 60. Then 55. 50 just seemed too early, so I stuck with working.

It's been tolerable, but less fun than in the past.

I am hoping they offer a package this year, but I doubt it. Business is booming, and the bigger problem is finding enough workers.

But guess what: now we have 70-80X of those earlier expenses saved! Business has been good ( my salary is highly bonus based) and 30 years of investing has the compounding machine rolling in high gear.

We've upped our spending, and that has been nice! So maybe we're at 40X our new spending level.

Bottom line, those "two more years" had a significant impact on the quality of our lives.

But I think I'm done now. I don't even need a stinken package!
That is so true.

avalpert
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Re: Why NOT make more money?

Post by avalpert » Tue Nov 14, 2017 10:12 pm

flyingaway wrote:
Tue Nov 14, 2017 10:07 pm
bhsince87 wrote:
Tue Nov 14, 2017 9:43 pm
A very interesting question and discussion! It's very timely for me.

Two years ago, our company offered an early retirement package. I was 50, my wife 48, and we had about 30X expenses saved.

My goal for years was to retire at 62. Then I lowered it to 60. Then 55. 50 just seemed too early, so I stuck with working.

It's been tolerable, but less fun than in the past.

I am hoping they offer a package this year, but I doubt it. Business is booming, and the bigger problem is finding enough workers.

But guess what: now we have 70-80X of those earlier expenses saved! Business has been good ( my salary is highly bonus based) and 30 years of investing has the compounding machine rolling in high gear.

We've upped our spending, and that has been nice! So maybe we're at 40X our new spending level.

Bottom line, those "two more years" had a significant impact on the quality of our lives.

But I think I'm done now. I don't even need a stinken package!
That is so true.
Well of course it is true (I'm assuming) - it is what actually happened to him.

That doesn't mean it is what should be expected as the likely outcome for every person who chooses to wait two years at age 50.

bhsince87
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Re: Why NOT make more money?

Post by bhsince87 » Tue Nov 14, 2017 10:40 pm

avalpert wrote:
Tue Nov 14, 2017 10:12 pm
flyingaway wrote:
Tue Nov 14, 2017 10:07 pm
bhsince87 wrote:
Tue Nov 14, 2017 9:43 pm
A very interesting question and discussion! It's very timely for me.

Two years ago, our company offered an early retirement package. I was 50, my wife 48, and we had about 30X expenses saved.

My goal for years was to retire at 62. Then I lowered it to 60. Then 55. 50 just seemed too early, so I stuck with working.

It's been tolerable, but less fun than in the past.

I am hoping they offer a package this year, but I doubt it. Business is booming, and the bigger problem is finding enough workers.

But guess what: now we have 70-80X of those earlier expenses saved! Business has been good ( my salary is highly bonus based) and 30 years of investing has the compounding machine rolling in high gear.

We've upped our spending, and that has been nice! So maybe we're at 40X our new spending level.

Bottom line, those "two more years" had a significant impact on the quality of our lives.

But I think I'm done now. I don't even need a stinken package!
That is so true.
Well of course it is true (I'm assuming) - it is what actually happened to him.

That doesn't mean it is what should be expected as the likely outcome for every person who chooses to wait two years at age 50.
Agreed. I could have died.

But even then, I suspect only my wife and friends would be thinking about what a shame it was that I worked that extra time, and gave up two years of potential "freedom".

Me? What would I care? I'd be dead! :)
BH87

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Tue Nov 14, 2017 11:09 pm

bhsince87 wrote:
Tue Nov 14, 2017 10:40 pm
avalpert wrote:
Tue Nov 14, 2017 10:12 pm
flyingaway wrote:
Tue Nov 14, 2017 10:07 pm
bhsince87 wrote:
Tue Nov 14, 2017 9:43 pm
A very interesting question and discussion! It's very timely for me.

Two years ago, our company offered an early retirement package. I was 50, my wife 48, and we had about 30X expenses saved.

My goal for years was to retire at 62. Then I lowered it to 60. Then 55. 50 just seemed too early, so I stuck with working.

It's been tolerable, but less fun than in the past.

I am hoping they offer a package this year, but I doubt it. Business is booming, and the bigger problem is finding enough workers.

But guess what: now we have 70-80X of those earlier expenses saved! Business has been good ( my salary is highly bonus based) and 30 years of investing has the compounding machine rolling in high gear.

We've upped our spending, and that has been nice! So maybe we're at 40X our new spending level.

Bottom line, those "two more years" had a significant impact on the quality of our lives.

But I think I'm done now. I don't even need a stinken package!
That is so true.
Well of course it is true (I'm assuming) - it is what actually happened to him.

That doesn't mean it is what should be expected as the likely outcome for every person who chooses to wait two years at age 50.
Agreed. I could have died.

But even then, I suspect only my wife and friends would be thinking about what a shame it was that I worked that extra time, and gave up two years of potential "freedom".

Me? What would I care? I'd be dead! :)
I like this view.

bhsince87
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Re: Why NOT make more money?

Post by bhsince87 » Tue Nov 14, 2017 11:25 pm

And here's another factor I've thought about: I have some health issues. If they flare up while I'm working, YAY! (?) I will get disability payments.

If I retire early, I will get no disability. Even Social Security takes this view.

Disability payments would be nice, I'm sure. Especially as a safety net.

So be sure to think about that.
BH87

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Tue Nov 14, 2017 11:34 pm

bhsince87 wrote:
Tue Nov 14, 2017 11:25 pm
And here's another factor I've thought about: I have some health issues. If they flare up while I'm working, YAY! (?) I will get disability payments.

If I retire early, I will get no disability. Even Social Security takes this view.

Disability payments would be nice, I'm sure. Especially as a safety net.

So be sure to think about that.
Who are you? These (disability insurance, etc.) are exactly what I thought some months ago. Plus, I have term life insurance and health insurance with my employer.

Some people may say those are not important if you are FI. I think they make OMY much more profitable.

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White Coat Investor
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Re: Why NOT make more money?

Post by White Coat Investor » Wed Nov 15, 2017 1:32 am

PhysicianOnFIRE wrote:
Tue Nov 14, 2017 8:23 pm
market timer wrote:
Sat Nov 11, 2017 2:34 am
PhysicianOnFIRE wrote:
Sat Nov 11, 2017 12:33 am
Also, I'm now able to disappear for weeks at a time. My family is embarking on a three-week Spanish immersion adventure starting this Sunday. I wouldn't be able to do so if I were focused on making more money.
This is the main freedom I miss by having a job. In my ideal world, I'd have summers off to travel with the kids, at least for 6 weeks, and another 4 weeks throughout the year. Hardly any jobs offer this. Maybe after I save another million, I'll request an amendment to my contract for 10 weeks of vacation. Worth a shot.
I think you just described the schedule of a teacher. You don't need a million dollars to do that!

:beer
-PoF
I married a teacher, but we never seemed to get this lifestyle. Seriously though, I would LOVE to figure out a way to get the summers completely off but still have a job come Fall. That sounds like a dream.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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White Coat Investor
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Re: Why NOT make more money?

Post by White Coat Investor » Wed Nov 15, 2017 1:34 am

EnjoyIt wrote:
Mon Nov 13, 2017 5:37 pm
wrongfunds wrote:
Mon Nov 13, 2017 1:50 pm
There is no limit to how much one can spend. At some point we need to decide is the extra thousands of hours working worth it.
You have no idea how much I actually agree with you on this point!

By the way, I was talking about "lowly" business class there but your calculations used first class airfare. I hope coming down a notch to business class will make your argument even more persuasive.

Back to the original point of the topic. Taken individually, many of the "what if ..." are reasonable and rational e.g. spike in expenses, high cost of medical coverage, long term care, assisted living, kid's big marriages, bad sequence of returns, dollar devaluation, Japan style market crash etc etc But if you want to account for each and every one of them, there is no way to stop accumulating for all those "what if ...".

The question which needs to be honestly answered is:- "Are you ready to start decumulating and ready to see your asset dwindle every single year?" That needs to be answered unequivocally in affirmative.
My apologies. I meant business class in my calculations. As most flights I try and take seam to cost about $1000 coach and $3k-$4k business per leg. which is where I got the math from. Although I just checked some flights now and see some going for a $1k premium per leg

As for decumilation. If you run a 4% withdrawal rate in a retirement calculator on average most people will find their wealth double and not decrease. But yes, I can only imagine what phsycological impact it may be to transition from building wealth to living off of it.
Man if we fly business class every where we want to go we're going to need to save up a lot more money than our original plan called for. But I guess you either fly first class or your heirs do eh?
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Wed Nov 15, 2017 9:10 am

White Coat Investor wrote:
Wed Nov 15, 2017 1:34 am
Man if we fly business class every where we want to go we're going to need to save up a lot more money than our original plan called for. But I guess you either fly first class or your heirs do eh?
I have never bought a first class seat, but did get upgraded to several times in domestic flights. I don't think it is worth the money.

marcopolo
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Re: Why NOT make more money?

Post by marcopolo » Wed Nov 15, 2017 1:03 pm

flyingaway wrote:
Tue Nov 14, 2017 11:34 pm
bhsince87 wrote:
Tue Nov 14, 2017 11:25 pm
And here's another factor I've thought about: I have some health issues. If they flare up while I'm working, YAY! (?) I will get disability payments.

If I retire early, I will get no disability. Even Social Security takes this view.

Disability payments would be nice, I'm sure. Especially as a safety net.

So be sure to think about that.
Who are you? These (disability insurance, etc.) are exactly what I thought some months ago. Plus, I have term life insurance and health insurance with my employer.

Some people may say those are not important if you are FI. I think they make OMY much more profitable.

That will also likely be true next year, and the year after that, and...
The real trick is to figure out at what point it is safe to get of that treat mill. That does not mean you have to stop working if you enjoy what you do. But, it does help solidify an exit strategy if you want to do something different.
Once in a while you get shown the light, in the strangest of places if you look at it right.

flyingaway
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Re: Why NOT make more money?

Post by flyingaway » Wed Nov 15, 2017 1:17 pm

marcopolo wrote:
Wed Nov 15, 2017 1:03 pm
That will also likely be true next year, and the year after that, and...
The real trick is to figure out at what point it is safe to get of that treat mill. That does not mean you have to stop working if you enjoy what you do. But, it does help solidify an exit strategy if you want to do something different.
If there is anything that I want very much to do and I cannot do it with a job, I will certainly stop working and do that thing. However, without anything that demand my quiting job, who NOT make more money. I was joking with my friends the other day that, if he sees me work at 57, he will see me buy business class seats on international flights with my own money.

AZAttorney11
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Re: Why NOT make more money?

Post by AZAttorney11 » Wed Nov 15, 2017 5:25 pm

Slacker wrote:
Fri Nov 10, 2017 7:10 pm
AZAttorney11 wrote:
Fri Nov 10, 2017 5:43 pm
I don't understand the line of reasoning that you are giving up a year of your life if you continue working. Do all of you work in sweatshops that forbid time off on the weekends, prevent long vacations once or twice a year, and ignore holidays like Thanksgiving and Christmas? It's okay to travel overseas, eat good food, and enjoy life while you are working, even during the week. There's no need to make this a pure work vs. pure leisure argument.
Just stopped in again to add that I am surprised that you, as an attorney, have so much time available. I can't tell you the number of times I've taken calls or had my calls taken by attorneys at 6,7 or even 8PM during the week...on the weekends, I don't take their calls and let them leave a voicemail - no need in letting them know I'm at work on the weekend as that opens a whole new can of worms.

I will grant that I have never been called by older partners at law firms at late hours or on weekends and they definitely seem to have time on their hands as many attorneys with Patent practitioner registration numbers below 30,000 [aka been around a long time] and having a last name that matches one of the law firm's names love to talk on the phone with all manner of great stories or to ask me about whatever area I live in currently.
I've lost plenty of weekends and had long nights, but I also take three weeks of vacation throughout the year, and shut things down the last two weeks of the year, so essentially five weeks of vacation. Work will take as much from you as you'll allow, and at some point you have to say no, increase your effectiveness through delegation, prioritize better, etc.

AZAttorney11
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Re: Why NOT make more money?

Post by AZAttorney11 » Wed Nov 15, 2017 5:26 pm

Crow Hunter wrote:
Fri Nov 10, 2017 6:39 pm
AZAttorney11 wrote:
Fri Nov 10, 2017 5:43 pm
I don't understand the line of reasoning that you are giving up a year of your life if you continue working. Do all of you work in sweatshops that forbid time off on the weekends, prevent long vacations once or twice a year, and ignore holidays like Thanksgiving and Christmas? It's okay to travel overseas, eat good food, and enjoy life while you are working, even during the week. There's no need to make this a pure work vs. pure leisure argument.
With only 10 days a year of vacation earned at 6.67 hours/month with days needed for Dr. Appointments, family emergencies, household contractors, dental appointments, eye doctor appointments, etc and jobs that require presence at work of one spouse at specific times of year and weekend work. Unexcused absences from work without taking paid leave is a great way to get fired at the jobs I have had and being salaried, unpaid time off isn't really an option. So we have to work within our very limited 2 weeks of paid time off.

So yes, I and my wife at least, work in "sweatshops" that prevent long vacations.

As I am typing right now, I am getting ready to go and make myself a sandwich because my wife will not be home until 8:30 pm CST after having gone in to work at 2:30 am CST this morning. This is to direct a company paid for meal on all three shifts for the Veterans at the company she works for (on top of her normal work load) and I am on call all weekend and need to stay within a 45min drive of work.

This is not an isolated job requirement weekend for either of us. It is actually pretty typical. When we do actually get a weekend when something isn't going on, we usually try to rest and catch up on all the home stuff that has been neglected up to that point.

Being retired will allow us to finally make vacation plans and still get to take them even when some disaster strikes.

(Assuming we live long enough)
You both should find new jobs.

EnjoyIt
Posts: 1314
Joined: Sun Dec 29, 2013 8:06 pm

Re: Why NOT make more money?

Post by EnjoyIt » Fri Nov 17, 2017 9:07 am

White Coat Investor wrote:
Wed Nov 15, 2017 1:32 am
PhysicianOnFIRE wrote:
Tue Nov 14, 2017 8:23 pm
market timer wrote:
Sat Nov 11, 2017 2:34 am
PhysicianOnFIRE wrote:
Sat Nov 11, 2017 12:33 am
Also, I'm now able to disappear for weeks at a time. My family is embarking on a three-week Spanish immersion adventure starting this Sunday. I wouldn't be able to do so if I were focused on making more money.
This is the main freedom I miss by having a job. In my ideal world, I'd have summers off to travel with the kids, at least for 6 weeks, and another 4 weeks throughout the year. Hardly any jobs offer this. Maybe after I save another million, I'll request an amendment to my contract for 10 weeks of vacation. Worth a shot.
I think you just described the schedule of a teacher. You don't need a million dollars to do that!

:beer
-PoF
I married a teacher, but we never seemed to get this lifestyle. Seriously though, I would LOVE to figure out a way to get the summers completely off but still have a job come Fall. That sounds like a dream.
for you, locums
problem solved

I have an ED doc friend who is credentialed at multiple hospitals. He works when he wants and as much as he wants. Just recently he took 2 months off to travel.

EnjoyIt
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Joined: Sun Dec 29, 2013 8:06 pm

Re: Why NOT make more money?

Post by EnjoyIt » Fri Nov 17, 2017 9:19 am

flyingaway wrote:
Tue Nov 14, 2017 12:21 am
sambb wrote:
Mon Nov 13, 2017 9:03 pm
What about the following:
Need 100k/year, so desire to have 2.5M (4%) withdrawal.

Lets say right now in 2017, i hit 2.5M,so I could retire. Great.

Instead, lets say that i didn't check my balance. And we hit a bear market. And my 2.5M is now 2.0M
at 2.0 M in 2018 (after bear market) - my 4% won't give me 100k/year

So therefore, in one case I could retire in 2017, and in another, i couldn't.

So, to answer the OP - why not make more money? Agree. making more money gives MORE CUSHION for retirement.
Is this psychology? yes. Reality>? Who knows,
This is a well known problem for the 4% rule. I guess it could be explained by statistics.
samba, would valuations be much lower during that bear market? If that is the case historically a 6% withdrawal rate should be just fine. No?
But, psychologically I would have a hard time pulling the trigger if that was the case for the following reasons:
1) Because we are in a bear market and fear is higher then.
2) I would love to be able to buy more funds during the bear market so quitting would be less desirable
3) I would not be at 4% at that time which will add to the fear.

More money gives you that cushion which feels nice. At some point we need to decide if more cushion is worth spending hundreds or thousands of hours at work. For some it is worth it, for others it may not be. I think fear plays a big role in that decision. Some of it is rational while some is irrational. I think the below 3% crowd is irrational.

SQRT
Posts: 573
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Re: Why NOT make more money?

Post by SQRT » Fri Nov 17, 2017 10:04 am

I retired 11years ago with what I thought was quite a lot “more than enough”. The early part of my retirement was influenced by the recession of 2008-2009. For a while it looked like I wouldnt have enough. I would now estimate that our spending is around 25% higher than I had planned for prior to retirement and I am very glad I have the extra spending power.

ThereforeI would recommend building in a fairly big cushion before you retire. Maybe 25%? Obviously it will depend on how much you want to stop working, but if you are building your assets at a fast pace, I would say do so for a while. Obviously, you have to put the pin in it at some point.

EnjoyIt
Posts: 1314
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Re: Why NOT make more money?

Post by EnjoyIt » Fri Nov 17, 2017 10:28 am

SQRT wrote:
Fri Nov 17, 2017 10:04 am
I retired 11years ago with what I thought was quite a lot “more than enough”. The early part of my retirement was influenced by the recession of 2008-2009. For a while it looked like I wouldnt have enough. I would now estimate that our spending is around 25% higher than I had planned for prior to retirement and I am very glad I have the extra spending power.

ThereforeI would recommend building in a fairly big cushion before you retire. Maybe 25%? Obviously it will depend on how much you want to stop working, but if you are building your assets at a fast pace, I would say do so for a while. Obviously, you have to put the pin in it at some point.
May I ask what caused the 25% increase? Is it because you have more money now then you thought you would or is it because expenses outpaced your expectations?

flyingaway
Posts: 1532
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Re: Why NOT make more money?

Post by flyingaway » Fri Nov 17, 2017 10:42 am

SQRT wrote:
Fri Nov 17, 2017 10:04 am
I retired 11years ago with what I thought was quite a lot “more than enough”. The early part of my retirement was influenced by the recession of 2008-2009. For a while it looked like I wouldnt have enough. I would now estimate that our spending is around 25% higher than I had planned for prior to retirement and I am very glad I have the extra spending power.

ThereforeI would recommend building in a fairly big cushion before you retire. Maybe 25%? Obviously it will depend on how much you want to stop working, but if you are building your assets at a fast pace, I would say do so for a while. Obviously, you have to put the pin in it at some point.
Building a 25% cushion is not a problem in this market. I think the market just had about a 25% rise in the past year. It could just drop that much in a few weeks.

wrongfunds
Posts: 924
Joined: Tue Dec 21, 2010 3:55 pm

Re: Why NOT make more money?

Post by wrongfunds » Fri Nov 17, 2017 11:12 am

Is it "put the pin" or "pull the pin"? Not being native American speaker, these type of idioms always gets me.

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TheTimeLord
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Re: Why NOT make more money?

Post by TheTimeLord » Fri Nov 17, 2017 11:27 am

wrongfunds wrote:
Fri Nov 17, 2017 11:12 am
Is it "put the pin" or "pull the pin"? Not being native American speaker, these type of idioms always gets me.
https://www.usingenglish.com/reference/ ... e+pin.html

What does 'Pull the pin' mean?
If you pull the pin, you put an end to something, quit or resign.


Personally, I always assumed the phrase originated with the way a hand grenade is activated, but I don't actually know the genesis of the term.
Run, You Clever Boy! 8723

mak1277
Posts: 509
Joined: Fri Jan 09, 2015 4:26 pm

Re: Why NOT make more money?

Post by mak1277 » Fri Nov 17, 2017 11:31 am

TheTimeLord wrote:
Fri Nov 17, 2017 11:27 am
wrongfunds wrote:
Fri Nov 17, 2017 11:12 am
Is it "put the pin" or "pull the pin"? Not being native American speaker, these type of idioms always gets me.
https://www.usingenglish.com/reference/ ... e+pin.html

What does 'Pull the pin' mean?
If you pull the pin, you put an end to something, quit or resign.


Personally, I always assumed the phrase originated with the way a hand grenade is activated, but I don't actually know the genesis of the term.
I agree with your assumption, and I disagree with the definition in your link. That seems like the definition of "pull the plug".

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TheTimeLord
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Re: Why NOT make more money?

Post by TheTimeLord » Fri Nov 17, 2017 11:34 am

mak1277 wrote:
Fri Nov 17, 2017 11:31 am
TheTimeLord wrote:
Fri Nov 17, 2017 11:27 am
wrongfunds wrote:
Fri Nov 17, 2017 11:12 am
Is it "put the pin" or "pull the pin"? Not being native American speaker, these type of idioms always gets me.
https://www.usingenglish.com/reference/ ... e+pin.html

What does 'Pull the pin' mean?
If you pull the pin, you put an end to something, quit or resign.


Personally, I always assumed the phrase originated with the way a hand grenade is activated, but I don't actually know the genesis of the term.
I agree with your assumption, and I disagree with the definition in your link. That seems like the definition of "pull the plug".
Here is their definition for that, similar but different in the suggestion of a premature ending.

https://www.usingenglish.com/reference/ ... +plug.html

What does 'Pull the plug' mean?
If the plug is pulled on something like a project, it is terminated prematurely, often by stopping funding.
Run, You Clever Boy! 8723

DrGoogle2017
Posts: 678
Joined: Mon Aug 14, 2017 12:31 pm

Re: Why NOT make more money?

Post by DrGoogle2017 » Fri Nov 17, 2017 12:56 pm

I spend more when I retire because I have time. All discretionary. Like 3 live performances in the last few weeks, 2 performances were priceless, glad we were able to go because we’re retired now.

wrongfunds
Posts: 924
Joined: Tue Dec 21, 2010 3:55 pm

Re: Why NOT make more money?

Post by wrongfunds » Fri Nov 17, 2017 1:37 pm

And that is one of the big fear of many BH. They might have good handle on their current expenses while employed and while having limited time for spending money but how do they estimate retirement expenses if they have unlimited amount of time to spend it? I know it sounds funny but still it is a legitimate concern.

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