[Net worth in retirement: How do you know when "enough is enough"?]

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
hsd
Posts: 2
Joined: Sat Jun 09, 2018 6:05 pm

[Net worth in retirement: How do you know when "enough is enough"?]

Post by hsd » Sat Jun 09, 2018 6:35 pm

[Split into a new post from: Post your Financial Milestone Announcements Here --admin LadyGeek]

I appreciate sand trap talking about the emotional toll of not getting a monthly paycheck and using the nest egg. I am 59 and wife is 58 I have well controlled cancer but feel i can't stop working because of insurance, liking our stressful but good jobs, and helping our 3 children. My wife and I hit our "number" years ago but I don't think i can ever stop. My parents died penniless and I don't want that. Our net worth just went over 5mm but we always live under our means but retirement just never seems like an option. How do you say enough is enough when there is always a need either for philanthropy or ones children and grandchildren. Obviously i am hoping to hear from those who chuck the golden handcuffs and are happy about it or not

RadAudit
Posts: 3006
Joined: Mon May 26, 2008 10:20 am
Location: Second star on the right and straight on 'til morning

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by RadAudit » Sun Jun 10, 2018 2:39 pm

I don't know if you can say enough is enough. You think you have insurance issues, you like your job, and you've got kids, grandkids and charitable causes to take care of. You might be a while before you have enough.

If it was just insurance, I'd say you might want to check to see if you could get and pay for insurance. At least, that issue could be resolved.

My experience was different from yours, I didn't particularly like my job and I thought I had prepped my kids well enough to get by. (Both had masters degrees and jobs. They were college debt free. I may have guessed wrong on that ultimately but they aren't back home yet.)

And, I may believe differently than you about priorities. I figured DW had put off a number of things for a long, long time that she wanted to do, so I'm making that a priority. Remodel the house, travel, etc. We help the kids where we can but feel that trying to figure out how to get on with their lives and responsibilities is part of the things they need to figure out. Grandkids' college educations are 15 years out.

So, the handcuffs for me weren't a concern. And, eight years in to retirement, I'm getting happier about it all the time. The kids will get what's left in due course.

You've got to figure out what's important to you and your wife and can you afford it on $5 mil. The alternative is to die at your desk somewhere down the road which is not necessarily a bad thing.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The Calvary isn't coming, kids. You are on your own.

delamer
Posts: 5819
Joined: Tue Feb 08, 2011 6:13 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by delamer » Sun Jun 10, 2018 4:44 pm

It is totally rationale for someone who has been treated for cancer to prioritize having good health insurance. So until you are within COBRA distance of Medicare eligibility, I can understand why you continue to work.

I am retired. But apparently I am less externally oriented than you. Which is another way of saying I am more self-centered.

We have money set aside for our kids that we won’t use for ourselves except in the case of dire financial circumstances — like both of us needing assisted living or nursing home care for several years. Some of that money will be gifted for home purchases or grandchildren’s education when the time comes. We are already contributing to IRAs for our kids.

So time for us to do what we want. It is neither our responsibility or desire to take care of the rest of the world.

If you feel differently, then keep working. But if, on the other hand, you think that somehow your $5 million is not “enough” then set aside $1.25 million for your kids and another $1.25 million for charity.

Live on the remaining $2.5 million plus Social Security. If you can’t figure out a way to do that, then nothing anyone can say here is going to change your perspective.

User avatar
David Jay
Posts: 5468
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by David Jay » Sun Jun 10, 2018 5:16 pm

hsd wrote:
Sat Jun 09, 2018 6:35 pm
My parents died penniless and I don't want that.
Our formative experiences are powerful, but we can choose whether we let them control our futures.

Clearly, with 5 million in assets, you are not going to die penniless. You need to find a way to get past your history.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Dandy
Posts: 5289
Joined: Sun Apr 25, 2010 7:42 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by Dandy » Sun Jun 10, 2018 9:41 pm

life is short, health is a gift but doesn't always last long. These are great years - you have money, relatively good health, a job you like and it seems like close family. How do you want to spend the next part of your life? Living below your means is a lifestyle that helped you get a fortune. It doesn't have to be the same lifestyle once you have made it. It is not easy to change.

I decided long ago that my goal was to gradually increase our lifestyle from frugal (often cheap :oops: ) to one that is more comfortable with spending a bit more. An extra vacation, season tickets to the theater, eating out a bit more often and a bit better, increased charity gifts, etc.

I get the insurance thing-- we have been visited by a life threatening illness that luckily turned out ok. So, by all means make sure you have that. If you love work that is one thing but it is easy just to drift as time goes by. You have enough it seems you just don't know what to do differently. Maybe because life is good .

jpdion
Posts: 91
Joined: Thu Feb 13, 2014 12:52 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by jpdion » Mon Jun 11, 2018 8:08 am

There are three personal pieces to "enough." The first piece is understanding what would be enough to support your chosen lifestyle. The second enough is knowing when you've reached that first enough. The third is knowing when you've had enough of working, and happily evolving to life without working.

SQRT
Posts: 853
Joined: Sat Feb 05, 2011 9:44 am

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by SQRT » Mon Jun 11, 2018 8:24 am

Agree that “enough” is often very dependant on how much you enjoy or don’t enjoy working. Once the job becomes a hassle, I suspect that enough starts to decline? Also, ones chosen lifestyle in retirement can be quite fluid, in both directions. I think many prospective retirees can reduce or boost their spending once retired to reflect available funds too. Health an also play a big factor as pointed out by the OP.

So “enough” can be quite a wide range I think.

euroswiss
Posts: 195
Joined: Sun Oct 25, 2015 4:40 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by euroswiss » Mon Jun 11, 2018 9:17 am

The biggest piece of info missing from your post is: “what are yourannual expenses”. If you need to fund $50’000 a year from that 5 Million stash, then you are obviously well set. On the other hand, if you are in a high cost of living area and plan on burning through $250k a year then 5mil could be tight

flyingaway
Posts: 1873
Joined: Fri Jan 17, 2014 10:19 am

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by flyingaway » Mon Jun 11, 2018 9:38 am

Yes, it is difficult to walk away from a job with a good paycheck and benefits, especially you have no idea what you will be walking into.
My recommendation is to figure out your annual expenses and use the 4% rule as a rough guide to see if you have enough. Then figure out if you have something you really want to do in retirement that you cannot do with a job. If your job is not that demanding and you cannot find a more interesting thing to do, keeping working and making more money is NOT that bad.

Nate79
Posts: 3324
Joined: Thu Aug 11, 2016 6:24 pm
Location: Portland, OR

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by Nate79 » Mon Jun 11, 2018 10:16 am

Net worth doesn't pay the bills unless you liquidate the assets you use to calculate the net worth (specifically thinking about value of the home). In other words what is more important is to look at the assets that are going to provide an income stream to pay your living expenses. If you are planning to sell the home and downsize then the difference in the two could be considered if reinvested.

goblue100
Posts: 638
Joined: Sun Dec 01, 2013 10:31 am

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by goblue100 » Mon Jun 11, 2018 10:18 am

hsd wrote:
Sat Jun 09, 2018 6:35 pm
[Split into a new post from: Post your Financial Milestone Announcements Here --admin LadyGeek]

How do you say enough is enough when there is always a need either for philanthropy or ones children and grandchildren.
I'm not there yet, but at some point setting aside your own happiness for the far off needs of children and grandchildren is just silly. The best gift you can give them is to stand on their own two feet and take care of their own needs.
Some people are immune to good advice. - Saul Goodman

hsd
Posts: 2
Joined: Sat Jun 09, 2018 6:05 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by hsd » Mon Jun 11, 2018 10:19 am

thanks everyone for your thoughts and insight and our somewhat admittedly irrational fear of retirement and probably taking on too much burden of our childrens success. It is helpful. Its just that when you have had this kind of success that eludes 95% of the world and how much luck is involved in that success ( plus hard work.) I feel responsible in some weird way that this should be generational. We shall see.

Camarillo Brillo
Posts: 19
Joined: Thu Apr 19, 2018 1:45 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by Camarillo Brillo » Mon Jun 11, 2018 11:12 am

I struggled with this, too. Finally, I decided 'enough is enough' and put in my retirement notice. We're actively recruiting my replacement as I type.

I have a hereditary heart disease that killed my dad when he was 35. I had my first heart attack at 26, and have had 2 more since then. Despite that, here I am 33 years later still going strong. Looking at me, no one would ever guess I have issues. I'm trim, energetic, and am told I don't look anywhere near my age.

Anyway, through a combo of good luck and hard work I knock down just slightly less than 1 mill a year and have enough liquid assets to carry us through a very long retirement.

Walking away from that high salary was not easy but finally I realized cash isn't what I need - - - time is what I need. Then it became a easy decision.

Regarding insurance, replacing my employee-provided plan will cost $30,000/year. So, I understand the need to keep a job just to get insurance, but there is always to option to pay out-of-pocket for similar coverage.

Regarding passing assets on to our kids, I don't believe in that. Instead, we're paying for their college, and are helping them build up significant nest eggs they can use to buy a house. In addition, I got them each summer jobs in their major that will be a huge catapult once they look for post-educ jobs.

Good luck with your decision.

User avatar
Toons
Posts: 12931
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by Toons » Mon Jun 11, 2018 11:15 am

When I found that although we spend what we want to spend,
The Net worth keeps growing due to the compounding of invested monies.
:happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

NotWhoYouThink
Posts: 2029
Joined: Fri Dec 26, 2014 4:19 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by NotWhoYouThink » Mon Jun 11, 2018 11:25 am

You mention net worth, but not invested assets.

How much do you spend each year? If you don't know, either look back through your records or start keeping track. How much do you have invested? The 4% rule is a good rough measure of what you could spend from your investments. Do you have pensions? Are you eligible for SS? How much?

We figured out our pension and SS income, and our expenses, and our investible assets, and wrote it all down. Numbers are just numbers, you can talk about them. Once you know the numbers you can start dealing with the other stuff.

I don't feel a lot of guilt or duty or obligation about earning more money. We support ourselves, our kids are launched and self-supporting, the rest is just a personal preference on how you spend your time. I figured when I quit someone else would step in and do my job, it wasn't like the world wasn't getting all the engineering program management it needed. Someone else just gets paid for it now.

smectym
Posts: 182
Joined: Thu May 26, 2011 5:07 pm

Re: [Net worth in retirement: How do you know when "enough is enough"?]

Post by smectym » Mon Jun 11, 2018 4:20 pm

hsd wrote:
Mon Jun 11, 2018 10:19 am
thanks everyone for your thoughts and insight and our somewhat admittedly irrational fear of retirement and probably taking on too much burden of our childrens success. It is helpful. Its just that when you have had this kind of success that eludes 95% of the world and how much luck is involved in that success ( plus hard work.) I feel responsible in some weird way that this should be generational. We shall see.
hsd, I wouldn't discount the semi-instinctual ("I feel responsible *in some weird way*) you say you have to try to ensure that your success is transmitted to the next generation. Perhaps the rapid era of socioeconomic change we're plunged into, which appears destined only to accelerate in unpredictable ways, partly explains that. I'm not so sure that the old, tried-and-true, and always well-meant advice to "do your kids a favor and let them stand on their own two feet" is always the whole answer today. For many families, there is little choice. But if you have advantages that can give the kids a leg up (a big example: making sure they don't enter life after school with huge student loan debt) it's probably a good idea --and a much bigger deal today than a generation or two generations back.

Each family's financial situation is different, parent-child interpersonal dynamics are different--and each kid is different. But ceteris paribus, parents today may want to figure out how to balance "encouraging independence" with strategic contributions to kids' start in life in ways that maximize their chances for success.

Post Reply