One-more-year - am I done or not?

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Topic Author
fortunefavored
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One-more-year - am I done or not?

Post by fortunefavored » Thu Apr 11, 2019 8:34 pm

I don't want to be in the OMY-forever crew.. but I also don't want to squander my fortuitous situation - despite how much I dislike all aspects of my job, industry and corporations in general.

At best I've been apathetic, but 10 years ago I started thinking it was untenable.. and the last 5 years have been like cutting teeth. My spouse is obviously sick of this too and is fully supportive of getting out as soon as reasonably possible.

Plan:
Immediately decline the most awful parts of my job. That may result in a pretty quick layoff, but will likely not shift my numbers signifcantly vs. the one-more-year scenario. If I make OMY, I'll push to negotiate a layoff, or worst case, quit.
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw
OMY would probably add another $150K to investments
Take some time off (1 to 2 years?) to find other things to occupy myself, possibly money making, possibly not
Both fully retire around the age of 60, depending on portfolio growth, health care situation, etc

Current details:
VHCOL, Married, Mid-40s DINK, no kids, no plans for kids
Me: $250K base + variable comp (average W2 $500K last 5 years)
Spouse: $75K - bronze-level health care plan available
Effective tax rates: Fed 27%, State 8.7%. Marginal rate must be close to 50% after NIIT etc. Post-exit tax rate probably 10% combined?

Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)
$850K - House 1, paid off - primary residence, will probably sell within 5 years and laterally move, most under capital gains exemption
$750K - House 2, paid off, family lives here. Can sell in 5-15 years, stepped up basis roughly equal to value

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
65K - "down year" budget cutting easy stuff - vacations, dining, entertainment, pause sinking fund
40K - slash to minimum budget, wife loses job and I can't find one, major medical issues, etc.

Go for it? Or do I need to keep being a "team player" and continue grinding? If it is OMY, what other moves or things should I be considering?

Thanks for your time!

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FiveK
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Re: One-more-year - am I done or not?

Post by FiveK » Thu Apr 11, 2019 8:46 pm

fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw

Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Based on the selected items above, and assuming that 4% is a Safe withdrawal rate, you are good to go. Enjoy!

Dottie57
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Re: One-more-year - am I done or not?

Post by Dottie57 » Thu Apr 11, 2019 9:05 pm

If I were you I would want to take a good amount of time off. Then look for a new job which has less stress. It doesn’t need to be high paying but something you enjoy.( I thought you said you were in md 40’s but cannot find it now.

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scubadiver
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Re: One-more-year - am I done or not?

Post by scubadiver » Thu Apr 11, 2019 9:15 pm

If you we're a bit more frugal, I would say both you and your wife could retire now, end of story. Anyway, since she'll still be working and you have a fairly substantial portfolio, I would say you should quit now. Don't wait. Give your notice tomorrow, take some time off and see how you feel in a year or two. If you're smart enough to get to we're you are now, you'll probably eventually find some industrious way to fill the hours in the day and maybe end up earning an income again. Perhaps even become cashflow positive. Until then, relax and enjoy some earned time off.

Good luck!

Scubadiver

MotoTrojan
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Re: One-more-year - am I done or not?

Post by MotoTrojan » Thu Apr 11, 2019 9:26 pm

If your wife is okay working for over a decade while you are retired (no kids, so that is truly what it is) you could probably get by. I would suggest you find a less demanding job that pays low six-figures or even match what your wife is making. More tax-advantaged space, more SS credit (I assume you don't have 30 years of employment), something to do, etc...

Before you truly pull the trigger make sure you estimate your expenses in dual-retirement, including healthcare.

Topic Author
fortunefavored
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Re: One-more-year - am I done or not?

Post by fortunefavored » Thu Apr 11, 2019 9:47 pm

Thanks for the replies thus far, Bogleheads has been a real inspiration.

We're both mid-40s, and obviously the lion's share of savings have been generated from my career (95%) - but I couldn't have had the focus and energy without her support, especially the last few years.

The idea of finding a less demanding job is certainly there, but when I do the math of OMY (save $150K) vs. working 10 more years (save $150K roughly) at a lower paying job it doesn't make much sense to me. So I am not counting on it, but will likely find something that will interest me, and that may lead to gainful employment. It is very difficult to see what in my current mental state - obviously my skills and experience are far far away from anything I want to be involved with. I definitely need some decompression time - but it is a one-way trip once I pull the plug.

Also I am past the second bend point on social security, having worked full time since I was 18. Running the calculators it would be $31K. Maxing out all my remaining slots would take it to $36K.

Invest4lt
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Re: One-more-year - am I done or not?

Post by Invest4lt » Thu Apr 11, 2019 9:57 pm

Seems there are two questions: 1. Financially, can you afford to retire; and, 2. Should you retire.

1. The numbers support a financial decision to retire.

2. Is it a good idea to retire? This is where the non financial aspect comes in. How will your retirement affect your spouse who is still getting up each morning to work? Will you enjoy your days alone while your spouse is at work? These types of questions are personal. I’m not sure the Bogleheads (or any internet strangers) can provide much guidance.

Best of luck!

Tal-
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Re: One-more-year - am I done or not?

Post by Tal- » Thu Apr 11, 2019 10:33 pm

It's strange for me to say this, but it almost feels like money is playing too much of a factor here...

To answer your question - yes, you can probably retire today, but I would like to see you do some type of variable income (95K to 65K) for the first several years.

The important part of that is that you can indeed quit your job today. Do that, but I wouldn't retire cold turkey. I would much rather see you making 50K a year for the next decade than making 0K. That may be me applying my values to you, but I worry about a high performer like you, retiring completely, when you're spouse is still working and frankly - when it sounds like you're more sick of your job than sick of working.

If I had a magic wand, I'd let you quit today, and give yourself 2 years off. At the end of that, plan to go back to work, doing whatever you want, making whatever you make, until your spouse can retire as well.
Debt is to personal finance as a knife is to cooking.

rjbraun
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Re: One-more-year - am I done or not?

Post by rjbraun » Thu Apr 11, 2019 10:39 pm

fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
65K - "down year" budget cutting easy stuff - vacations, dining, entertainment, pause sinking fund
40K - slash to minimum budget, wife loses job and I can't find one, major medical issues, etc.
I don't really follow your 40K budget. In this scenario, wife loses job. I guess you can use COBRA for health insurance for 18 to 36 months, but the premiums will probably cost you more than you would pay under her plan. Also, "major medical issues" sounds potentially costly to me, so I would think paying out of pocket for health insurance and then potentially incurring significant out of pocket medical expenses on top of that might start to bump up against 40K on its own. Then, you've got housing and other living costs (food, transportation, etc.). These could rise as well if you need to pay up for conveniences, given the time and stress involved with medical problems, etc. I don't know, maybe I'm just overly cautious. Also, I'm just providing feedback on the 40K budget item on its own, not in the context of your overall financial situation.

majiaknight
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Re: One-more-year - am I done or not?

Post by majiaknight » Thu Apr 11, 2019 11:07 pm

With a ~$4M portfolio (adding your 2nd paid off house) and a working spouse w/o mortgage, I don't think you will have any financial issues after quitting your job.

However, my concern is whether this is really the right way to improve your current situation. Is it the typical mid-life crisis at your age? Not sure how I would handle this in a decade at your age hopefully w/ a similar portfolio size. I just read the following post yesterday which maybe somewhat relevant to the topic.

https://www.mymoneyblog.com/the-lifesty ... rians.html

MTF
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Re: One-more-year - am I done or not?

Post by MTF » Thu Apr 11, 2019 11:41 pm

fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Immediately decline the most awful parts of my job. That may result in a pretty quick layoff, but will likely not shift my numbers signifcantly vs. the one-more-year scenario. If I make OMY, I'll push to negotiate a layoff, or worst case, quit.
Confess I just don't understand this attitude. If you don't like your job, suck it up or quit. Why should you expect to retain the job and keep getting paid if you only want to do those parts of the job that suit? And what makes you think that, if you do, and somehow make it through one more year without being fired, you'll be in a position to negotiate anything?

And whilst you may not feel like you owe your employer anything, do you value your integrity? Or your reputation. Who knows - you may need another job sometime in the future. If you do, do you want the reference to be - "Oh yeah, that's the guy that took us for a ride for his last year, then tried to negotiate a severance package - don't touch him"? And even if not, is that how you want to be remembered anyway?

EddyB
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Re: One-more-year - am I done or not?

Post by EddyB » Fri Apr 12, 2019 12:03 am

MTF wrote:
Thu Apr 11, 2019 11:41 pm
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Immediately decline the most awful parts of my job. That may result in a pretty quick layoff, but will likely not shift my numbers signifcantly vs. the one-more-year scenario. If I make OMY, I'll push to negotiate a layoff, or worst case, quit.
Confess I just don't understand this attitude. If you don't like your job, suck it up or quit. Why should you expect to retain the job and keep getting paid if you only want to do those parts of the job that suit? And what makes you think that, if you do, and somehow make it through one more year without being fired, you'll be in a position to negotiate anything?

And whilst you may not feel like you owe your employer anything, do you value your integrity? Or your reputation. Who knows - you may need another job sometime in the future. If you do, do you want the reference to be - "Oh yeah, that's the guy that took us for a ride for his last year, then tried to negotiate a severance package - don't touch him"? And even if not, is that how you want to be remembered anyway?
He’s not saying he’s going to hide it. I did something similar within three years, then had two raises summing to more than 50% of where I started, as my employer was able to see my value in the elements of my job that I liked.

Bacchus01
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Re: One-more-year - am I done or not?

Post by Bacchus01 » Fri Apr 12, 2019 5:28 am

Run I-ord. I bet you’ll be surprised with the results.

Do you have any pensions coming?

We are similar boat. Total household income is a little lower most years. Mid 40s. 3 kids. 1 on way to University in the fall. Pre tax: $1.3M. Post: $1.2M. 3 homes with equity but none paid off. Not as valuable as yours. Have about $2M pre-tax coming in a lump sum next 12 months and seriously considering bailing out. Would have about $4M total at that point plus equity and then pensions. I will receive about $60k/yr at 65 plus combine SS of $45k. I think we will be just fine 1 year from now. Wife is more concerned.

ad2007
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Re: One-more-year - am I done or not?

Post by ad2007 » Fri Apr 12, 2019 7:04 am

FiveK wrote:
Thu Apr 11, 2019 8:46 pm
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw

Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Based on the selected items above, and assuming that 4% is a Safe withdrawal rate, you are good to go. Enjoy!
OP is mid-40s. Thought the recommended swr was lower for younger folks.

Topic Author
fortunefavored
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Re: One-more-year - am I done or not?

Post by fortunefavored » Fri Apr 12, 2019 8:23 am

re: Variable budgeting - yes, sorry, I meant my "90K baseline" has various levers in it that can be reduced. Taxes & health costs would be on top of that in any scenario.

As far as the "keep working some where" comments - I could have several other full time jobs tomorrow in various areas I am far more interested in. I'd be surprised if I made it the full 2 years before ending up fully occupied, there is little danger I'll be sitting on the couch watching TV for 10 years.

The key is that I don't expect anything I occupy myself with to financially move the needle significantly other than helping avoid portfolio drawdown and there's no scenario I will return any where near my previous salary.

By the time we're 60, we want to be in the $4.5M invested range to comfortably both 100% retire and cover healthcare and taxes (obviously heavily dependent on where pre-medicare health care expenses end up) I expect our withdrawal rate will be much lower than 4% in order to continue to allow the portfolio to grow (i-orp and firecalc agree. We will have no pensions other than social security, so it will be all portfolio driven.)

re: Downshifting being a crime against humanity. Corporations will wring as much life out of you as possible, as much as possible. I don't begrudge their motivations, but the reverse is also true: if they no longer find value in the work I am doing, they can let me go. I have no moral or ethical conflict with this.

Thanks again Bogleheads, feeling pretty good about this plan. I expected a few "keep grinding, that's a lot of money" responses. :)

GT99
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Re: One-more-year - am I done or not?

Post by GT99 » Fri Apr 12, 2019 8:46 am

ad2007 wrote:
Fri Apr 12, 2019 7:04 am
FiveK wrote:
Thu Apr 11, 2019 8:46 pm
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw

Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Based on the selected items above, and assuming that 4% is a Safe withdrawal rate, you are good to go. Enjoy!
OP is mid-40s. Thought the recommended swr was lower for younger folks.
OP is below 3% based on those numbers. I have 2 young kids, and if I had those numbers and a job I didn't enjoy I would be out the door in a heartbeat. Financially, it's not even borderline - it's very easily doable.

desiderium
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Re: One-more-year - am I done or not?

Post by desiderium » Fri Apr 12, 2019 8:52 am

fortunefavored wrote:
Fri Apr 12, 2019 8:23 am

As far as the "keep working some where" comments - I could have several other full time jobs tomorrow in various areas I am far more interested in. I'd be surprised if I made it the full 2 years before ending up fully occupied, there is little danger I'll be sitting on the couch watching TV for 10 years.

The key is that I don't expect anything I occupy myself with to financially move the needle significantly other than helping avoid portfolio drawdown and there's no scenario I will return any where near my previous salary.
I think this is a good way to look at it. Spiritual jaundice is an all-too-common affliction in a high-demand corporate environment. Quit and spend some time pursuing non-remunerative activities that feed your soul. However, recognize that despite all the calculations it is really difficult to predict your security over the next 40+years. The value of your human capital is very high. You would do well to maintain it by returning to the workplace at some level--part time, gig, consulting, etc. As you point out, earning some or all of your spend will help ensure portfolio survival

Good luck!

EnjoyIt
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Re: One-more-year - am I done or not?

Post by EnjoyIt » Fri Apr 12, 2019 9:08 am

I would quit before the end of this business day.

Life is way too short to be miserable when your financial situation says you don’t need to work for money any more.

Just as a thought. I am about your age with a smaller nest egg, with similar spending and just semi-retired. Life is too short to be miserable 40-50 hours a week. Not to mention that miserable comes home and affects your spouse as well. No wonder she is on board with you quiting. Since we semi-retired our lives have only improved as has our health.

BobDaBlob
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Re: One-more-year - am I done or not?

Post by BobDaBlob » Fri Apr 12, 2019 9:34 am

I've got few words of wisdom, just my own 2 cents on this...

Found myself in a similar situation as the OP not long ago...mid-50's, working a stressful, mindless job I no longer enjoyed (not just where I worked but what I was doing...could find same job elsewhere in a heartbeat, though a longer commute might be required).
We've been pondering an exit for about 4 years now. Gave notice in Nov 2018 and last day was March 1. I haven't missed a day since :beer
About $3.2M invested, about $2.0M taxable. Approx allocation of 70/30. DINK's. Annual expenses average $80k. Fully comfortable with a 4% or lower SWR.
Wife is same age, collecting SSDI (approx $22k), and I'm covered under her prior employer retirement benefits until 65.
MY SS will also be approx $22k on the low end, if I start early at 62, higher if I defer to FRA of 67 or later.
We're looking into some insurance and LTC options, but for the most part, consider ourselves very lucky.
Home is not close to paid off, but above water (purchased in 2005...ouch!), and we're starting to look at relocating within about a year to a lower-cost state (maybe country) than where we live now.
Meantime, I've revived my yoga practice to help clear the cobwebs, spending more time riding my motorcycle, puttering around the yard with spring stuff and looking at deferred home maintenance work that may need doing in order to sell quickly and efficiently.
Next up is a Florida Gulf Coast vacation to see if this is a viable relocation option.

Best of luck to the OP and others faced with similar situations.
Bob
Too much of everything is just enough...

JGoneRiding
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Re: One-more-year - am I done or not?

Post by JGoneRiding » Fri Apr 12, 2019 9:36 am

My thought would be that if you don't go back to work with in 6 mos to a year that your spouse will either retire no later than 55 and or divorce you and you would only keep half.

If you like the numbers with those 2 possible scenarios go for it! But don't expect her to keep working till 65 if you arent. If for no other reason then work limits travel options.

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Time2Quit
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Re: One-more-year - am I done or not?

Post by Time2Quit » Fri Apr 12, 2019 12:06 pm

OP,

I am in a similar situation (age-wise, wife still working, house paid for, no debt etc..) and after about 4+ months of some side consulting, doing what I want to do (multiple trips, projects etc...). I can tell you that for me personally, it is hard since we still have to work around my wife's schedule. This leaves me in sort of a limbo state and I am noticing some resentment from her when I want to do something spontaneously which affects her schedule.

The part time consulting is not all it is cracked up to be since everything is project based with short horizons. Couple of weeks ago, I noticed I had 50 billable hours again for the week which is what I was trying to get away from. You have to be ready when they call. If I will work 50 hours on someone else's schedule I might as well work for myself.

I would advise, slug it out for a few more years as $500k jobs are not that common. I do not agree with the advise of do something you love for a lot less money. Why work 5 years for $100K/yr doing something you love when you can make $500K in one year? You are still losing 5 years of your life that belongs to someone else. If you you enough and want to be done, then be done.

I personally realized that depending on how the markets perform in the figure, I may have enough (nothing is guaranteed) but not ready to be done so I will keep working and start living to my W2 income means for the next 8 to 10 years and let the portfolio do its thing.

Good luck in whatever you decided and please keep us posted.
"It is not the man who has too little, but the man who craves more, that is poor." --Seneca

Bacchus01
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Re: One-more-year - am I done or not?

Post by Bacchus01 » Fri Apr 12, 2019 1:11 pm

fortunefavored wrote:
Fri Apr 12, 2019 8:23 am
re: Variable budgeting - yes, sorry, I meant my "90K baseline" has various levers in it that can be reduced. Taxes & health costs would be on top of that in any scenario.

As far as the "keep working some where" comments - I could have several other full time jobs tomorrow in various areas I am far more interested in. I'd be surprised if I made it the full 2 years before ending up fully occupied, there is little danger I'll be sitting on the couch watching TV for 10 years.

The key is that I don't expect anything I occupy myself with to financially move the needle significantly other than helping avoid portfolio drawdown and there's no scenario I will return any where near my previous salary.

By the time we're 60, we want to be in the $4.5M invested range to comfortably both 100% retire and cover healthcare and taxes (obviously heavily dependent on where pre-medicare health care expenses end up) I expect our withdrawal rate will be much lower than 4% in order to continue to allow the portfolio to grow (i-orp and firecalc agree. We will have no pensions other than social security, so it will be all portfolio driven.)

re: Downshifting being a crime against humanity. Corporations will wring as much life out of you as possible, as much as possible. I don't begrudge their motivations, but the reverse is also true: if they no longer find value in the work I am doing, they can let me go. I have no moral or ethical conflict with this.

Thanks again Bogleheads, feeling pretty good about this plan. I expected a few "keep grinding, that's a lot of money" responses. :)

With the investments you have now, if you keep working til 60 you will blow WAY past $4.5M

victw
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Re: One-more-year - am I done or not?

Post by victw » Fri Apr 12, 2019 1:24 pm

$90k spending on $575k income?

I'd look a little more closely at it. We pay ourselves first via 401ks and investing - but I'm still surprised how much are spending seems hard to nail down.

Vic

Bacchus01
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Re: One-more-year - am I done or not?

Post by Bacchus01 » Fri Apr 12, 2019 1:45 pm

victw wrote:
Fri Apr 12, 2019 1:24 pm
$90k spending on $575k income?

I'd look a little more closely at it. We pay ourselves first via 401ks and investing - but I'm still surprised how much are spending seems hard to nail down.

Vic
If you take out our mortgages, like the OP has done, we spend around that amount on similar income.

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FiveK
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Re: One-more-year - am I done or not?

Post by FiveK » Fri Apr 12, 2019 3:01 pm

ad2007 wrote:
Fri Apr 12, 2019 7:04 am
FiveK wrote:
Thu Apr 11, 2019 8:46 pm
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw
Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)
Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Based on the selected items above, and assuming that 4% is a Safe withdrawal rate, you are good to go. Enjoy!
OP is mid-40s. Thought the recommended swr was lower for younger folks.
Depends on how one chooses to define "safe," and all such definitions will be speculative in any case. With $3.2 million invested, a 4% WR is ~$120K/yr, 33% above OP's "high" budget. Seems safe enough.

If one includes some amount of future SS and sale of at least one of the homes, it seems even safer.

SatisfiedGhost
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Re: One-more-year - am I done or not?

Post by SatisfiedGhost » Fri Apr 12, 2019 4:52 pm

I'm not sure what you would do with the extra money from one more year. Your numbers are fire-proof. You could have half, and with your spouse working, no mortgages etc, you would be probably be more than fine. At least that's what I did. It is hard to walk away from a "good" situation, but think about your obituary, or you on your death bed, how would you feel about adding one more year of something you hated? What if that was only a few years away?

You've done amazing. My suggestion is give yourself one year where you don't take another job. Do personal development. Unwind and get clear. And enjoy how well you have done! Congrats.

J295
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Re: One-more-year - am I done or not?

Post by J295 » Fri Apr 12, 2019 5:22 pm

Transition away from the full time job.

Topic Author
fortunefavored
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Re: One-more-year - am I done or not?

Post by fortunefavored » Fri Apr 12, 2019 9:59 pm

Thanks for the additional perspectives - and I'm glad Time2Quit for upheld the Bogleheads conservative reputation. :) Part of the reason for OMY is exactly that logic - if I work one more year, that is similar to 10 years of savings at a lower paid job. OMY lets me rationalize taking my foot off the gas.

Expenses I literally track every dollar, so high confidence there. Taxes take a huge chunk right off the top, and then what's left we've been saving 60-80% depending on how variable compensation is. We only recently paid off the mortgage so I am removing that from our historical expense calculation.

I'll definitely update the forum - I can already feel my attitude shifting but it is slow going.

blahblahsunshine
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Re: One-more-year - am I done or not?

Post by blahblahsunshine » Fri Apr 12, 2019 11:38 pm

Our situation is much like yours. I think you are solid to punch out. We too are a little worried, (or at least I am), that walking away is turning down easy, though painful :moneybag s. Just tonight the SO gave me permission to punch out after my next vesting. Will be interesting to see if I am able to bring myself to do it.

basspond
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Re: One-more-year - am I done or not?

Post by basspond » Sat Apr 13, 2019 6:32 am

The most important advice I received from a retirement class was making sure you had plans for your time in retirement. I get the impression from others that being board, having no structure and not feeling relevant are worse then having a bad work situation, I am definitely not in that camp. Set goals, allocate your time, find something worthwhile to volunteer, and make sure you don’t dip into your principal the first 5 years.

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ChowYunPhat
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Re: One-more-year - am I done or not?

Post by ChowYunPhat » Sat Apr 13, 2019 7:19 am

FortuneFavored, believe you're in good shape based on $4.8M in investments and real estate equity. On the investments alone, you could get away with a SWR in the 3% range and very safe when combined with your wife's salary and HC. Based on the data you should start engineering your lay-off or a reduction to part-time.
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Spouse: $75K - bronze-level health care plan available

$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)
$850K - House 1, paid off - primary residence, will probably sell within 5 years and laterally move, most under capital gains exemption
$750K - House 2, paid off, family lives here. Can sell in 5-15 years, stepped up basis roughly equal to value

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Take some time to consider what you would do with the white space. As OPs have already commented, going from hard-charging professional to retired while your wife is still grinding requires consideration. Not the point of your post, but in the end money is a means to an end.
A wise man and his money are friends forever...

Bacchus01
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Re: One-more-year - am I done or not?

Post by Bacchus01 » Sat Apr 13, 2019 7:45 am

ChowYunPhat wrote:
Sat Apr 13, 2019 7:19 am
FortuneFavored, believe you're in good shape based on $4.8M in investments and real estate equity. On the investments alone, you could get away with a SWR in the 3% range and very safe when combined with your wife's salary and HC. Based on the data you should start engineering your lay-off or a reduction to part-time.
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Spouse: $75K - bronze-level health care plan available

$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)
$850K - House 1, paid off - primary residence, will probably sell within 5 years and laterally move, most under capital gains exemption
$750K - House 2, paid off, family lives here. Can sell in 5-15 years, stepped up basis roughly equal to value

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Take some time to consider what you would do with the white space. As OPs have already commented, going from hard-charging professional to retired while your wife is still grinding requires consideration. Not the point of your post, but in the end money is a means to an end.
Engineering the lay-off is an interesting topic I see from time to time. I’m not a fan of that. It’s very hard mentally to take a hig-drive individual and have them put it into another gear to drive a lay-off.

A better option is to negotiate a stay package and transition agreement. If you are honest about FIRE in a year, then tell them. Tell them you’d like to retire in a year but want to make sure transition happens well. They may throw you a stay package beyond that timeframe, but are unlikely to outright fire you. And if they do, they likely owe you a severance as a result.

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scubadiver
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Re: One-more-year - am I done or not?

Post by scubadiver » Sat Apr 13, 2019 7:56 am

Bacchus01 wrote:
Sat Apr 13, 2019 7:45 am
A better option is to negotiate a stay package and transition agreement. If you are honest about FIRE in a year, then tell them. Tell them you’d like to retire in a year but want to make sure transition happens well. They may throw you a stay package beyond that timeframe, but are unlikely to outright fire you. And if they do, they likely owe you a severance as a result.
I would just given them my notice and be gone in a month. That said, if you do decide to stick it out for a year, THIS^^^ is how you should proceed.

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Re: One-more-year - am I done or not?

Post by Patzer » Sat Apr 13, 2019 9:12 am

You have plenty to retire.

I don't think you should OMY, because clearly you don't enjoy it and don't need the money.

My question is: How much of a change in tempo do you want? Are you really ready to go from maximum effort to doing nothing?

What if you shifted from full time to a part-time consultant for your current employer, to slow the pace of your life down, and then retired in 6 months or a year if you still wanted less work.

Not sure if this would apply to your situation, but I have a friend who was a very high earner, valued by the company, but hated his job and was ready to retire.
When he let his employer know they offered him a consulting gig, where he works from home 5-10 hours a week, calling into meetings to give advice, but is not responsible for completing any projects, and he gets 40% of his old salary.
That was five years ago, and he still has the job, even though he does not need the money, because it is pretty easy, gives him a sense of purpose, and he can still travel whenever he wants and enjoy life, as long as he can dial-in for a meeting or two each day.

Bacchus01
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Re: One-more-year - am I done or not?

Post by Bacchus01 » Sat Apr 13, 2019 9:37 am

scubadiver wrote:
Sat Apr 13, 2019 7:56 am
Bacchus01 wrote:
Sat Apr 13, 2019 7:45 am
A better option is to negotiate a stay package and transition agreement. If you are honest about FIRE in a year, then tell them. Tell them you’d like to retire in a year but want to make sure transition happens well. They may throw you a stay package beyond that timeframe, but are unlikely to outright fire you. And if they do, they likely owe you a severance as a result.
I would just given them my notice and be gone in a month. That said, if you do decide to stick it out for a year, THIS^^^ is how you should proceed.
Or, to add to my post, if you want to be bold, tell them you are retiring very shortly to have a change, but you could be convinced to stay 1 or 2 more years to help if that would ease things. I suspect they may not offer mich, but they may throw the book at you and keep you for a year.

Personal experience, I was in a situation where the role was not progressing and there was some ambiguity on the future of not only me but the business. Last year in May I asked for an agreement that would keep me on through a transition. It took a while (about 8 months) they eventually came back with double what I asked for. I had an outside offer ready to go just in case. It worked out well enough. I’ll be around at least through the end of this year or next and see how it goes.

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Re: One-more-year - am I done or not?

Post by EddyB » Sat Apr 13, 2019 10:31 am

blahblahsunshine wrote:
Fri Apr 12, 2019 11:38 pm
Our situation is much like yours. I think you are solid to punch out. We too are a little worried, (or at least I am), that walking away is turning down easy, though painful :moneybag s. Just tonight the SO gave me permission to punch out after my next vesting. Will be interesting to see if I am able to bring myself to do it.
If it's painful, it's not easy.

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fortunefavored
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Re: One-more-year - am I done or not?

Post by fortunefavored » Sat Apr 13, 2019 10:35 am

"stay" package or "negotiate a layoff" are basically the same thing at my company/level. The main difference is the variable compensation plan impact, I would need to think hard about that before opening that dialog for either option.

Or as I half suspect, once I start turning down no-notice random international trips to middle-of-no-where factories in China either one may come to me without me saying anything. Similarly, there's no "part time" scenario in my world. It is heavily outcome driven.

As this thread helps me form my thoughts, I think it's less "OMY" than "One-More-Week" - and simply evaluate where I am mentally on an on-going basis.

Thanks again.. this thread has really helped a lot.. Bogleheads is quite unique as a place to discuss these beyond-first-world-problems. Super blessed and lucky to be in the situation I am.

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Re: One-more-year - am I done or not?

Post by SatisfiedGhost » Sat Apr 13, 2019 11:14 am

Also I would suggest you start reading FIRE blogs and books. Mr Money Mustache, Our Next Life, Mad Fientist, etc. (I have one too.) You could also find a local meet up from the Choose FI group. I think it's clear what you want to do, you just need to support. People in those communities can offer you the support and idea you need for this transition, even better than this group, which to your point is quite conservative.

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Re: One-more-year - am I done or not?

Post by sambb » Sat Apr 13, 2019 2:17 pm

You also could invest in yourself - courses in resiliency and leadership to maintain good work environment

GrowthSeeker
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Re: One-more-year - am I done or not?

Post by GrowthSeeker » Sun Apr 14, 2019 8:11 am

What if: you both stopped working, you live off the taxable account (including the proceeds from the sale of one house); and don't touch the tax advantaged accounts until age 70?

I made some broad-brush back of the envelope type estimates and assumptions where you have to pay for health insurance, you have some investment income in taxable taxed at 15%, and you spend 90k per year. I came up with an annual spending included insurance and taxes of $111K.
$111K / $2.95M is a withdrawal rate of 3.8% (I'm excluding the tax advantaged accounts from the denominator), which is pretty sustainable long term for 20-25 years when SS kicks in. If your wife continues working, that withdrawal rate goes to 1.1% Plus you still have human capital remaining.

And meanwhile the tax deferred $1.1M is happily growing for 25 years.

Thoughts on the psychology of it all:
- The psychological impact of a big change can have surprising results (Law of Unintended Consequences), just something to be mindful of.
- For someone who is burned out, cutting down on the stress by working less and sleeping more can dramatically improve the feeling of burnout. YMMV
- Any big change can stress a marriage.
Just because you're paranoid doesn't mean they're NOT out to get you.

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fortunefavored
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Re: One-more-year - am I done or not?

Post by fortunefavored » Sun Apr 14, 2019 8:54 am

If that 2nd house was sold, that would definitely change our math significantly - both on the investing side and the expense side. Our budget has line items for our house maintenance sinking fund AND cash family support. But who knows when that will change. Both could go up in the next 5 to 15 years.

Health insurance also has a large uncertainty - cost, but also quality. The ACA plans continue to get worse and worse - no outside area coverage, limited networks, etc. We're simply not willing to give up the security of an employer plan without a lot more money or more clarity. We may take turns - I take 2 years off.. then get a job with health care.. wife's turn to change industries/careers.

Another factor for DINKs is post-retirement end of life planning - likely a very expensive continuous care facility buy-in at some point, so we are not planning to play it lean and limp to social security.

No right answers I guess, other than "be flexible"!

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Re: One-more-year - am I done or not?

Post by EnjoyIt » Sun Apr 14, 2019 9:45 am

GrowthSeeker wrote:
Sun Apr 14, 2019 8:11 am
What if: you both stopped working, you live off the taxable account (including the proceeds from the sale of one house); and don't touch the tax advantaged accounts until age 70?

I made some broad-brush back of the envelope type estimates and assumptions where you have to pay for health insurance, you have some investment income in taxable taxed at 15%, and you spend 90k per year. I came up with an annual spending included insurance and taxes of $111K.
$111K / $2.95M is a withdrawal rate of 3.8% (I'm excluding the tax advantaged accounts from the denominator), which is pretty sustainable long term for 20-25 years when SS kicks in. If your wife continues working, that withdrawal rate goes to 1.1% Plus you still have human capital remaining.

And meanwhile the tax deferred $1.1M is happily growing for 25 years.

Thoughts on the psychology of it all:
- The psychological impact of a big change can have surprising results (Law of Unintended Consequences), just something to be mindful of.
- For someone who is burned out, cutting down on the stress by working less and sleeping more can dramatically improve the feeling of burnout. YMMV
- Any big change can stress a marriage.
Part in bold is a common mistake. OP will have most of their dividends and long term capital gains taxed at 0% with a small portion possibly taxed at 15% in early retirement.

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Re: One-more-year - am I done or not?

Post by midareff » Sun Apr 14, 2019 9:46 am

FiveK wrote:
Thu Apr 11, 2019 8:46 pm
fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm
Assume spouse's salary will cover taxes and health insurance, minimize portfolio draw

Assets:
$3.2M invested: 2.1M taxable, 300K Roth, 800K IRA/401K (average .09 ER, 70/30)

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)
Based on the selected items above, and assuming that 4% is a Safe withdrawal rate, you are good to go. Enjoy!
Assuming is always bad for your health. Mid 40's to mid 90's (a significant possibility) is a 50 year retirement. IMHO there are lots of gorillas in the room for that long a pleasure trip. Inflation, war, wealth tax(s) unforeseen now, and everything else you can't see or predict now to couple with your steadily declining human capital. While you might be fine on paper now, the possibility of 40, 50 or more years of retirement presents many unknowns. If you were in your mid 50's or 60's the answer would be lots simpler. At mid 40's at or near the end of a record economic expansion I'd be cautious for another year or two or three, especially if you can continue to draw and save half mil W2's. The difference between a 47 and 50 year retirement isn't that huge and another mil saved could make a huge difference one day. YMMV.

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Re: One-more-year - am I done or not?

Post by TxAg » Sun Apr 14, 2019 9:55 am

I'd be gone yesterday.

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FiveK
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Re: One-more-year - am I done or not?

Post by FiveK » Sun Apr 14, 2019 12:18 pm

midareff wrote:
Sun Apr 14, 2019 9:46 am
Assuming is always bad for your health.
Perhaps including the assumption that one must continue to work at a job one despises, just in case the future will be much worse than the worst of the past. ;)

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midareff
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Re: One-more-year - am I done or not?

Post by midareff » Sun Apr 14, 2019 2:33 pm

FiveK wrote:
Sun Apr 14, 2019 12:18 pm
midareff wrote:
Sun Apr 14, 2019 9:46 am
Assuming is always bad for your health.
Perhaps including the assumption that one must continue to work at a job one despises, just in case the future will be much worse than the worst of the past. ;)
You have a point... even with $500K W2's. Another point is the 4% Guideline was for a 30 year retirement, not a 50 year one, and the starting point had a far different Shiller and return on Treasuries.

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FiveK
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Re: One-more-year - am I done or not?

Post by FiveK » Sun Apr 14, 2019 2:58 pm

midareff wrote:
Sun Apr 14, 2019 2:33 pm
FiveK wrote:
Sun Apr 14, 2019 12:18 pm
midareff wrote:
Sun Apr 14, 2019 9:46 am
Assuming is always bad for your health.
Perhaps including the assumption that one must continue to work at a job one despises, just in case the future will be much worse than the worst of the past. ;)
You have a point... even with $500K W2's. Another point is the 4% Guideline was for a 30 year retirement, not a 50 year one, and the starting point had a far different Shiller and return on Treasuries.
Indeed, much speculation on this subject. E.g., one could go through
Shiller PE Ratio
Safe withdrawal rates
Year 2000 retirees using the '4% rule' - Where are they now?
and similar discussions. In the end, "you pays your money and you takes your chance" isn't a bad summary....

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Re: One-more-year - am I done or not?

Post by JTColton » Sun Apr 14, 2019 3:15 pm

Haven't seen it mentioned, have you considered asking for a leave of absence?

Take a break for 6-12 months. Relax, recharge, travel etc.

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midareff
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Re: One-more-year - am I done or not?

Post by midareff » Sun Apr 14, 2019 4:02 pm

FiveK wrote:
Sun Apr 14, 2019 2:58 pm
midareff wrote:
Sun Apr 14, 2019 2:33 pm
FiveK wrote:
Sun Apr 14, 2019 12:18 pm
midareff wrote:
Sun Apr 14, 2019 9:46 am
Assuming is always bad for your health.
Perhaps including the assumption that one must continue to work at a job one despises, just in case the future will be much worse than the worst of the past. ;)
You have a point... even with $500K W2's. Another point is the 4% Guideline was for a 30 year retirement, not a 50 year one, and the starting point had a far different Shiller and return on Treasuries.
Indeed, much speculation on this subject. E.g., one could go through
Shiller PE Ratio
Safe withdrawal rates
Year 2000 retirees using the '4% rule' - Where are they now?
and similar discussions. In the end, "you pays your money and you takes your chance" isn't a bad summary....
I agree with you.. that is the end result. OTOH, in the absence of a solid pension starting upon retirement, and SS, which he/they would not be eligible for in the next 20 + years, an abundance of caution would seem wise. You can regret working the extra year or two, or regret not having worked it. AT a $500K W2 for him and 75K for her that's leaving lots on the table. Late 40's no kids go 5 star the world for a decade on that. If my crystal ball was any good I would have bailed a year or two earlier. Go figure in 2012 I was retiring into the longest economic expansion and bull market on record. As the Hulkster might have said; "Whatcha goin' do when the S&P500 hits 3000 for you"?

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Re: One-more-year - am I done or not?

Post by tampaite » Mon Apr 15, 2019 7:53 am

fortunefavored wrote:
Thu Apr 11, 2019 8:34 pm

Current details:
no kids, no plans for kids

Assets:
$3.2M invested:
$850K - House 1, paid off
$750K - House 2, paid off

Budget:
90K - based on Quicken last 2 years, rolling 12 month periods (excluding income taxes and health insurance premiums)

Go for it?
Absolutely, you were ready last year!.

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