Deciding whether to retire - it's difficult!

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
User avatar
Topic Author
CardinalRule
Posts: 504
Joined: Sun Jan 15, 2017 11:01 am
Location: United States

Deciding whether to retire - it's difficult!

Post by CardinalRule »

:confused I have always assumed that I would work until age 65, but in recent months, I have begun to question that assumption. Financially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this. If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?

Pros (for retirement)
We have significant savings accumulated (net worth of $5 million) at this stage of our lives
DW could put me on her health coverage at work
No kids - any remaining savings when we are gone would just go to charity
My job often consumes 50+ hours a week, which is one reason why I don't have more hobbies :(

Cons
I feel like I haven't thought enough about what I would do to occupy myself, after retirement
I still like what I'm doing for the most part at work, although less than I did five years ago
No kids - DW and I are on our own, and the boglehead in me wants to keep adding to our financial safety net, with my income :moneybag
My parents, in their mid-80s, are still alive and I think of myself as their safety net, although they are currently self-sufficient

Our current situation:
  • My age: 60. DW’s age: 55, with current plans to work until 62. Both in good health; no kids.
  • Both of us work for megacorps with no pension. According to ssa.gov, my projected Social Security benefit would be around $3,200 at full retirement age and $2,200 at early retirement. We have only begun to think about the interaction of my SS benefits and DW’s, and obviously there is a lot to consider there. But based on our savings (below), I would not be inclined to begin drawing Social Security early.
  • We live and work in a relatively HCOL area. Our 3,000 sf home was built in 2010 and worth $1 million, and we paid off our mortgage early in 2019. We have no other debt. Our thought is that we would downsize after both of us retire and instead have two smaller residences in lower cost-of-living areas, one warm and one cool.
  • I earn roughly $160 thousand per year, plus RSUs that have typically take me well over $200 thousand in recent years; DW earns $100 thousand. We both work in the finance and accounting space, and consulting or part-time opportunities would likely be available to me.
  • We have no long-term care insurance and that worries me just a bit.
  • In addition to our home, we have accumulated roughly $4 million in savings. Currently my retirement accounts, mostly in 2025 target date funds, are worth $950 thousand. DW’s balances, mainly in 2030 target date funds, are worth about the same. Of the combined $1.3 million in retirement accounts, only about $300 thousand is in Roth accounts.
  • Our other savings include taxable brokerage accounts (roughly $1 million, with an AA of 60/30, excluding 10% in cash); high yield savings ($450 thousand) and iBonds ($160 thousand). I also have $500 thousand in RSUs that vested 4-8 years ago and which I didn’t sell (more recently I have always sold on the vest date).
  • Looking at Quicken over the past couple of years, our annual expenses seem to run around $75 thousand a year, including some travel.
User avatar
8foot7
Posts: 2392
Joined: Mon Jan 05, 2015 7:29 pm

Re: Deciding whether to retire - it's difficult!

Post by 8foot7 »

How does your wife feel about your retiring?
Barsoom
Posts: 346
Joined: Thu Dec 06, 2018 9:40 am

Re: Deciding whether to retire - it's difficult!

Post by Barsoom »

You sound like me. I retired last summer. I was 60, and DW was 58

I lived in a HCOL, but moved to Texas a few years before retiring from MegaCorp. No RSUs, but combined 401(k) and pension lump-sum of $4M. I have a 3,000 sq. ft. home here, worth about $300K.

For me, it was time to go, as the workforce was young and eager and I had worked for nearly 40 years, and it was time to spend the next 25-30 living off of the fruits of the first 40. Let the next generation have a go at it alone.

You can enter your portfolio statistics into this Boglehead retiree portfolio model spreadsheet and see how it cash flows out for the next 40 years.

viewtopic.php?f=2&t=97352

Good luck!

-B
User avatar
KingRiggs
Posts: 655
Joined: Wed Dec 12, 2018 12:19 pm
Location: Indiana

Re: Deciding whether to retire - it's difficult!

Post by KingRiggs »

Would there be a way to decrease the amount of work you do? Or maybe transition to a less stressful position at the MegaCorp? This might fill your days with activity but keep you fresher.

Financially, it looks to my untrained eye like you could pull the ripcord any time and be just fine.

Well done.
Advice = noun | Advise = verb | | Roth, not ROTH
JBTX
Posts: 7120
Joined: Wed Jul 26, 2017 12:46 pm

Re: Deciding whether to retire - it's difficult!

Post by JBTX »

You certainly can afford to retire if you want. Options you could explore:

- are there other roles within the company that would have meaningful work but less demanding.
- consider an extended leave of absence to get a feel for what you would/might do in retirement
- if you retire, part time or contract work may be available, if that's what you want to do.

While I can understand working even when you don't need to, I'd make sure at that stage I was enjoying it and felt that my contributions were valued and appreciated.
User avatar
mrspock
Posts: 1331
Joined: Tue Feb 13, 2018 2:49 am
Location: Vulcan

Re: Deciding whether to retire - it's difficult!

Post by mrspock »

“I retired too early.” — said nobody ever in their 60s. Pull the trigger my friend, there are no do overs in this life.

I’m punching out in my 40s and I’m not worried :) .
Compound
Posts: 838
Joined: Mon May 26, 2014 1:32 pm

Re: Deciding whether to retire - it's difficult!

Post by Compound »

Unless your annual expected expenses are very high, you easily have enough assets to retire. What do your anticipated expenses in retirement look like?
MathWizard
Posts: 4394
Joined: Tue Jul 26, 2011 1:35 pm

Re: Deciding whether to retire - it's difficult!

Post by MathWizard »

I am in a similar situation with only about 1/2 the net worth, and I may pull the plug just before turning 63. I don't live in a HCOL area though.

Politics at work are much different and my enthusiasm for work is greatly finished.
slyfox1357
Posts: 64
Joined: Tue Dec 26, 2017 6:13 pm

Re: Deciding whether to retire - it's difficult!

Post by slyfox1357 »

Other than the addressing the details regarding optimizing your approach (your retirement shift alongside your wife's working and then her retirement shift), of course you can retire now. Mentally speaking, spend some quality time to find your calling on the other side and then you'll know it's the right time pull the ripcord.
Swansea
Posts: 989
Joined: Sat Feb 13, 2016 5:16 am

Re: Deciding whether to retire - it's difficult!

Post by Swansea »

Consider retiring and working on a part time basis, if you can, as a consultant etc. I did that after retiring full time and it helped in the transition. Then I actively volunteered for ten years.
I liked my full time job, but with staff cuts, I kept picking up a number of other functions, so work load increased.
Limoncello402
Posts: 148
Joined: Wed May 03, 2017 3:58 pm

Re: Deciding whether to retire - it's difficult!

Post by Limoncello402 »

MathWizard wrote: Sat Jul 18, 2020 6:30 pm I am in a similar situation with only about 1/2 the net worth, and I may pull the plug just before turning 63. I don't live in a HCOL area though.

Politics at work are much different and my enthusiasm for work is greatly finished.
I had to double check your post to make sure it was written by me. (I know it wasn't as I am not a mathwizard :happy ). Exact same situation. I'm targeting retiring this coming year, most likely January 2021, but have not announced it. I'm single, and the decision is tough on many fronts.
student
Posts: 5211
Joined: Fri Apr 03, 2015 6:58 am

Re: Deciding whether to retire - it's difficult!

Post by student »

Do you hate your job or is it just the 50+ hours that is the issue? I would not retire until the pandemic is over and there is more clarity on the economy.
makingmistakes
Posts: 98
Joined: Sun Jan 19, 2020 7:59 am

Re: Deciding whether to retire - it's difficult!

Post by makingmistakes »

student wrote: Sun Jul 19, 2020 6:29 am Do you hate your job or is it just the 50+ hours that is the issue? I would not retire until the pandemic is over and there is more clarity on the economy.
Is every Boglehead this wealthy such that things are still uncertain economically even with 5 million dollars at age 60 with a wife still making $100k?

I can understand one needs to consider all angles, but financially for this situation? I guess I need to find a forum for the middle class.
User avatar
JoeRetire
Posts: 6001
Joined: Tue Jan 16, 2018 2:44 pm

Re: Deciding whether to retire - it's difficult!

Post by JoeRetire »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pmFinancially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this.
Financially, you could retire today if you like. But if you aren't sure, then keep working and thinking. When the right time comes, you'll know for sure. The decision won't be a struggle.
If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?
I also had planned to work until 65 or so. But when I was 60, I decided I was tired of all the reorgs at work, didn't want to spend a lot of time travelling to the home office out of state, and would either need to look for a new job, or call it quits. For me, choosing the latter was easy, both financially and psychologically.

I did go back about 6 months later and consult for my former employer 2 days per week for a year. But that was actually very enjoyable - no travel, no office politics, no administrivia, just the fun parts of the job.

I've really enjoyed retirement.
Last edited by JoeRetire on Sun Jul 19, 2020 6:56 am, edited 1 time in total.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
User avatar
JoeRetire
Posts: 6001
Joined: Tue Jan 16, 2018 2:44 pm

Re: Deciding whether to retire - it's difficult!

Post by JoeRetire »

makingmistakes wrote: Sun Jul 19, 2020 6:43 amIs every Boglehead this wealthy such that things are still uncertain economically even with 5 million dollars at age 60 with a wife still making $100k?
No, not every Boglehead.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
tealeaves
Posts: 218
Joined: Sun Apr 29, 2018 1:21 pm

Re: Deciding whether to retire - it's difficult!

Post by tealeaves »

An older employee about ten years ago said a took a week's vacation and decided he dreaded going back to work and then knew it was "time." Gave me a lot of the food for thought. I just did that and then came to the same conclusion. So it's time for me and because like you I am financially ready I decided to retire this month. I don't have much to retire "to" but I don't buy the argument that you need to. The main thing is when you know you don't want to be in a certain environment any longer and can afford to leave it, you should strongly consider doing so. The pandemic serves as another reminder that one may not have many good years left, which for me has reinforced my feelings. Good luck.
prd1982
Posts: 347
Joined: Sun Jan 08, 2017 4:43 pm

Re: Deciding whether to retire - it's difficult!

Post by prd1982 »

I would not retire yet, for reasons having nothing to do with finances:

* With COVID-19 around, a lot of activities are curtailed or much less fun then they used to be.

* You enjoy your job. I suspect a lot of the OT you spend is because you enjoy your work and want to be part of the action.

* You haven't figured out what you will spend your time doing once you are retired.

I would suggest staying on your job until the world has COVID-19 under control (whatever that means). Try to reduce your time working by not volunteering for work (I'm betting you do). Be sure to take your vacation, and not sign on to work. Figure out what you want to do once retired.

Once that is all handled, then revisit retirement.
student
Posts: 5211
Joined: Fri Apr 03, 2015 6:58 am

Re: Deciding whether to retire - it's difficult!

Post by student »

makingmistakes wrote: Sun Jul 19, 2020 6:43 am
student wrote: Sun Jul 19, 2020 6:29 am Do you hate your job or is it just the 50+ hours that is the issue? I would not retire until the pandemic is over and there is more clarity on the economy.
Is every Boglehead this wealthy such that things are still uncertain economically even with 5 million dollars at age 60 with a wife still making $100k?

I can understand one needs to consider all angles, but financially for this situation? I guess I need to find a forum for the middle class.
I certainly don't have 5 million like the OP, far from it. The pandemic could negatively impact the economy, what's wrong with working another year or two? That's why I asked OP whether he hates his job.
fortunefavored
Posts: 209
Joined: Tue Jun 02, 2015 8:18 pm

Re: Deciding whether to retire - it's difficult!

Post by fortunefavored »

makingmistakes wrote: Sun Jul 19, 2020 6:43 am
student wrote: Sun Jul 19, 2020 6:29 am Do you hate your job or is it just the 50+ hours that is the issue? I would not retire until the pandemic is over and there is more clarity on the economy.
Is every Boglehead this wealthy such that things are still uncertain economically even with 5 million dollars at age 60 with a wife still making $100k?

I can understand one needs to consider all angles, but financially for this situation? I guess I need to find a forum for the middle class.
Similar numbers to OP but late 40s - I am pulling the plug as soon as they offer layoffs. I think another factor not mentioned so far is health and longevity. Do you come from long lived families? Personally I don't - even in my late 40s I feel the clock ticking.
Tjb
Posts: 41
Joined: Mon Jul 20, 2015 4:17 pm

Re: Deciding whether to retire - it's difficult!

Post by Tjb »

I can relate to your post and as a few others mentioned, could have written almost the same thing. I just turned 61 and DW is also 5 years younger, but does not work. We also have a similar nest egg. My only incentive to stay working is at 62 with 40 yrs of service, we both can remain on employers healthcare for the same cost until I turn 65. I turn 62 next May, and there is one last incentive to stay until the end of next year (2021) for an ESOP boost (I suppose it could be a drop, but I do not need to decide right now).

The fact that you can remain on your wife's healthcare is helpful. Although, like us, you can certainly afford to buy healthcare, but if there is a way to manage the transition, it's worth taking advantage of it. How long does your wife plan to work ? If she worked at least until you turned 65, then you could go on medicare, and only have to purchase healthcare on an exchange (or whatever is out there by then ) for her until she hits 65.

I also understand the desire to step away. I have come to the conclusion I am burned out. I still contribute and stay engaged, but have no patience for the politics.

So, if I were you (and it sounds like I'm very similar) I would zero in on a date, or two, or even 3 ( I have 3 now, end of 2021 being the latest) and spend some time putting a plan together. That's what I have done. Once I had a few dates, I did the same and asked for advice here (you can search my last few posts) , wrote an IPS (Investment policy statement) and have adjusted it 4-5 times and will likely keep refining it until the day I finally retire, and contemplated what I need to do, and want to do. As for the * What to retire to '" consideration, I have a lot of leisure things I enjoy, We have 3 children, they are not fully self sufficient but heading that way, I will spend some time helping with guidance (one lives in Europe, so we would be visiting, so travel is involved ), staying physically active and spending time doing things I pushed off due to work. I have a "beginners mind " approach to things and plan to learn new skills and try new things. I haven't ruled out maybe starting a small business, or more likely a hobby that makes some spending money ( Spending guilt is something that seems to be built in to our generation)

That's about the best advice I can give you, pick a few dates, nothing cast in stone, consider how they would work, format a plan, and when ready, pull the trigger. Early 60's is a good time in my opinion, you likely will not have any regrets you left too early, and none you stayed too long.

Good Luck
User avatar
Watty
Posts: 20918
Joined: Wed Oct 10, 2007 3:55 pm

Re: Deciding whether to retire - it's difficult!

Post by Watty »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?
I retired just before I turned 59 with a small fraction of what you have but I live in a medium to low cost of living area.

One of the things that helped me decide to do this is that there was one year when I was in my 50s when I went to three funerals of people that were more or less my age.

They were people like coworkers and neighbors so I was not real close with any of them but it does get you thinking.

It was after I retired but we went to my wife's 50th class reunion and they had a memorial wall with the list of people that had already died and there were way too many of them, I would guess it was something like 20% of the graduating class. Some of the people attending were also already widowed. There was also another long list of people they could not find and I would assume that a lot of them had also died. There were also a fair number of people that had obvious health problems. For a 60 year old couple the odds that both of them will be alive and in good health in ten years are not that great. If you have any contact with your high school class you might look into how how your old classmates are doing.

I have also seen relatives naturally slow down by about their mid 70s even if they were in relatively good health. While I hope to have a longer happy life than that I am realistic about having a very limited number of good active retirement years when I can do things like extensive travel(in normal times at least).
CardinalRule wrote: Sat Jul 18, 2020 5:45 pm Pros (for retirement)
On the list of pros also consider that by retiring that you could also control your exposure to COVID-19 more.

We can't talk politics here but after the election it should be clearer if you actually need your wife's health insurance or if you can depend on having some sort of ACA policy until you can get on Medicare. If so you can both retire.
CardinalRule wrote: Sat Jul 18, 2020 5:45 pm According to ssa.gov, my projected Social Security benefit would be around $3,200 at full retirement age and $2,200 at early retirement. We have only begun to think about the interaction of my SS benefits and DW’s, and obviously there is a lot to consider there. But based on our savings (below), I would not be inclined to begin drawing Social Security early.
See this web site for a suggested claiming strategy.

https://opensocialsecurity.com/
CardinalRule wrote: Sat Jul 18, 2020 5:45 pm Looking at Quicken over the past couple of years, our annual expenses seem to run around $75 thousand a year, including some travel.
With a paid off house that sounds reasonable but you would also have occasional large expenses like when you need a replacement car or you have a large home repair.

You did not mention your wife's Social Security but if your combined Social Security is $5,000 a month($60K a year) then you would only have a $15K a year gap to fund once you are both getting Social Security. You would need to fund your retirement until then and figure out how it would work if one of you survives the other and you only have one Social Security check but $15K a year is a very low bar. With a 4% safe withdraw rate a $400k portfolio could provide more than that. With a 2% dividend you could cover that with a $750K portfolio.
CardinalRule wrote: Sat Jul 18, 2020 5:45 pm We have no long-term care insurance and that worries me just a bit.
If only one of you is surviving when LTC is needed then many of your other expenses will stop when you go into LTC. In that case you only need to fund the gap between your normal retirement budget and the LTC costs. If you are living in a lower cost of living area then that might not be much higher than your normal retirement budget. You can get an idea of what LTC costs in different areas here.

https://www.genworth.com/aging-and-you/ ... -care.html

If only one of you is surviving when LTC is needed you can also sell your house and the home equity will be available to pay the gap between your normal budget and your LTC costs.

When looking at the LTC costs and statistics also keep in mind that "long term care" is a very misleading term since it can mean; Assisted living, full nursing home, or a memory care unit. Assisted living is the most common and is much less expensive, if you go into that your expenses might even go down. For example you might hear of someone that had to live in LTC for five years but the actual situation was that they were in the less expensive assisted living for four years and then required the more expensive nursing care for one year.

For a couple while it is not impossible the odds that they would BOTH need a higher cost nursing care for a long time is really low.
Last edited by Watty on Sun Jul 19, 2020 8:36 am, edited 1 time in total.
bltn
Posts: 914
Joined: Mon Feb 20, 2017 9:32 pm

Re: Deciding whether to retire - it's difficult!

Post by bltn »

JoeRetire wrote: Sun Jul 19, 2020 6:54 am
CardinalRule wrote: Sat Jul 18, 2020 5:45 pmFinancially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this.
Financially, you could retire today if you like. But if you aren't sure, then keep working and thinking. When the right time comes, you'll know for sure. The decision won't be a struggle.
If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?
I also had planned to work until 65 or so. But when I was 60, I decided I was tired of all the reorgs at work, didn't want to spend a lot of time travelling to the home office out of state, and would either need to look for a new job, or call it quits. For me, choosing the latter was easy, both financially and psychologically.

I did go back about 6 months later and consult for my former employer 2 days per week for a year. But that was actually very enjoyable - no travel, no office politics, no administrivia, just the fun parts of the job.

I've really enjoyed retirement.
I agree that you will know when your ready to retire.
Also you will hear that you should retire toward something as well as away from something. In other words, have a plan for retirement. That s not really necessary for a happy retirement. You ll find ways to occupy your time. While a few people retire and the return to work, the overwhelming majority are happy to quit. That has been my experience.
Artisan
Posts: 327
Joined: Sat Oct 01, 2016 8:30 am

Re: Deciding whether to retire - it's difficult!

Post by Artisan »

I don't post often anymore but your post caught my eye so I thought I'd respond.

We were (are) in a similar situation to you and your wife, although with some differences. I'm listing them here so you can get some perspective from my versus your perspective.

Here are our similarities:

My husband retired in his late 50's after spending 30+ years in government service. I'm about 5 years younger and work in health care.

Pretty similar net worth, distribution of assets and spending.

We live in a HCOL area but plan to relocate when I retire. Our primary residence will be in the south (probably Florida) and we plan to rent a place for the summer in the cooler parts of New England.

My husband worked about the same amount of time per week as you.

His parents lived to their 90's and mine to their later 80's. We thought we might have to help them eventually financially but that didn't happen.

We don't plan on collecting SS until 70.

Although he liked the people he worked with and supervised, he loved the organization less and less. His salary was pretty similar to yours and he was also torn between walking away from a well paying job and enjoying the freedom of retirement. He also was concerned with a bigger buffer though I felt we had more than enough to retire comfortably.

Our portfolio is roughly 60% stocks/ 40% fixed income assets.

Some differences.

We have two adult children and although they are successful and self supporting, we'd like to leave a significant legacy.

My husband has a significant pension.

I have a long term care policy.

My thoughts:

I feel very strongly that he made the correct decision in retiring when he did. Although he had some minor hobbies he really had nothing that occupied much of his time. Since retirement he is noticeably more relaxed and has lost a lot of weight and is in great shape. Although he has put a lot back on in the last 4 months from lifestyle restrictions from staying at home. He spent more time exercising, joined a gym and spent 3 days a week there and once or twice a week would hike locally. He spends more time reading, more time with our dogs, and gets more sleep. While he misses some of the people he works with and occasionally gets together with them he does not miss his job or the stress that came with it. He tells me he has not been bored a single day since he retired 2 1/2 years ago and that he he feels he left at the right time. I think he looks 5 years younger.

At your asset level I think you can safely fund any long term care.

I didn't see any mention of heath care coverage once your wife retires. This can be a significant expense and I am not sure if that is included in your planned expenses although, again, at your asset level I am sure you can handle that expense.

When does your wife plan to retire and how does she feel about you retiring before her?

I think most here would be in agreement that financially you are well set to retire whenever you wish.

The issue is psychological.

Some people feel they lose a part of their identity when they retire. My husband felt it to some degree. He was the "go to guy" when there were problems or issues and many times when he'd go into work he'd tell me there were people lined up at his desk waiting for him.

It is a difficult decision but I would also add that life is relatively short and unpredictable. We never know what tomorrow may bring.

Good luck in your decision.
Dandy
Posts: 6385
Joined: Sun Apr 25, 2010 7:42 pm

Re: Deciding whether to retire - it's difficult!

Post by Dandy »

I think if you retire you will be fine --especially if you have opportunities to do some consulting. That can ease you into retirement and give you time to adjust to full time retirement. Money wise you seem to be fine. You also might spend more time with parents and/or doing some charity work -- maybe related to where you want to leave your money.

Most people I know fretted about retiring but all of them made the adjustment and shortly after agreed they would not want to return to work -- what they missed wasn't the work -- it was more their co worker interactions. It can be like losing a family.

I guess the factor that is very different now is the pandemic. Work can be dangerous but staying home can make developing other social ties/activities also an issue. For me on this issue I'm glad I'm retired vs going to work.

Good luck and stay healthy
MathWizard
Posts: 4394
Joined: Tue Jul 26, 2011 1:35 pm

Re: Deciding whether to retire - it's difficult!

Post by MathWizard »

Limoncello402 wrote: Sun Jul 19, 2020 5:32 am
MathWizard wrote: Sat Jul 18, 2020 6:30 pm I am in a similar situation with only about 1/2 the net worth, and I may pull the plug just before turning 63. I don't live in a HCOL area though.

Politics at work are much different and my enthusiasm for work is greatly finished.
I had to double check your post to make sure it was written by me. (I know it wasn't as I am not a mathwizard :happy ). Exact same situation. I'm targeting retiring this coming year, most likely January 2021, but have not announced it. I'm single, and the decision is tough on many fronts.
There are rumors of some sort of incentive to leave, so I'm going to stick around a bit in case that comes through. I've figured that I'll be forgoing about $250K to 300K after-tax if I count benefits like health care and employer match, but that could be said of any retirement.

I really like the people that I manage and the customers, it's those at my level and above. My previous boss was very supportive, but a leadership shake-up has changed all that.

I think that autocorrect must have changed diminished to finished, but perhaps that was a Freudian slip. :?:
User avatar
LiveSimple
Posts: 1796
Joined: Thu Jan 03, 2013 7:55 am

Re: Deciding whether to retire - it's difficult!

Post by LiveSimple »

if you with $5M and no liabilities, cannot retire, then who can ?
User avatar
nedsaid
Posts: 13953
Joined: Fri Nov 23, 2012 12:33 pm

Re: Deciding whether to retire - it's difficult!

Post by nedsaid »

LiveSimple wrote: Sun Jul 19, 2020 11:17 am if you with $5M and no liabilities, cannot retire, then who can ?
That is what I was thinking.
A fool and his money are good for business.
TravelGeek
Posts: 3837
Joined: Sat Oct 25, 2014 3:23 pm

Re: Deciding whether to retire - it's difficult!

Post by TravelGeek »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm :confused I have always assumed that I would work until age 65, but in recent months, I have begun to question that assumption. Financially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this. If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?
We were in many ways in a similar situation a couple of years ago (though a bit younger). I could have kept coasting along at work, making money that in all likelihood would go to nieces and nephews or charity in three or so decades. It really wouldn’t have made a difference as far as our lifestyle is concerned. But we aren’t really enjoying our work any more and valued our free time and flexibility more than extra $$$. You only live once... and I was doing the remote worked life with endless Zoom meetings (often at inconvenient times to accommodate global time zones) years before it became “popular”. Glad my Zoom meetings now usually involve wine and cocktails ;)

I think we made the right decision. Over the course of the last year my parents had a couple of medical issues (emergencies) and my ER lifestyle enabled me to fly short notice and not worry about work projects or deadline impact.

I haven’t done the math, but it looks like your net worth and future SS payments will easily accommodate ER with your estimated expenses.
User avatar
cashboy
Posts: 582
Joined: Tue Sep 11, 2018 5:03 pm
Location: USA

Re: Deciding whether to retire - it's difficult!

Post by cashboy »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm Financially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision.
if you are 'struggling with the decision' then keep doing what you are doing (working, but without struggling over this decision) - while knowing you can retire at any time. what a great feeling that will be.


best of luck to you when you do retire!

:sharebeer
Three-Fund Portfolio: FSPSX - FXAIX - FXNAX (with slight tilt of CDs - CASH - Canned Beans - Rice - Bottled Water)
hoops777
Posts: 3330
Joined: Sun Apr 10, 2011 12:23 pm

Re: Deciding whether to retire - it's difficult!

Post by hoops777 »

You have no children. If you are worried about anything financially you are simply being a bit ridiculous or trying to find a reason to keep working.
I do not say this to be a #}%#{, but take a step back and think about the 99.9 pct of humanity who would love to have your difficult problem and figure it out.
K.I.S.S........so easy to say so difficult to do.
delamer
Posts: 10590
Joined: Tue Feb 08, 2011 6:13 pm

Re: Deciding whether to retire - it's difficult!

Post by delamer »

Retiring during this pandemic is just different than retiring during a time when society is open and hobbies, travel, and other activities are available.

Normally, I’d say that the earlier you retire the easier it is to get involved in various interests that will take up your abundant free time. Not so much right now...

But having a spouse who plans to work for another 7 years will greatly affect your retirement too.

Have you considered a more “global” plan that calls for you to work a couple more years and for you and your wife to retire at the same time? That would allow you to save more — maybe enough extra to pay for long-term care insurance and pre-Medicare health insurance premiums. Not that your financial situation really requires it, but because it would alleviate any psychological stress you have over those issues.

I retired about 4 1/2 years before my husband, and it wasn’t ideal. Seven years is a long time.
travelspot
Posts: 72
Joined: Sun Dec 16, 2018 11:40 pm

Re: Deciding whether to retire - it's difficult!

Post by travelspot »

Watty wrote: Sun Jul 19, 2020 8:13 am For a 60 year old couple the odds that both of them will be alive and in good health in ten years are not that great. If you have any contact with your high school class you might look into how how your old classmates are doing.

I have also seen relatives naturally slow down by about their mid 70s even if they were in relatively good health. While I hope to have a longer happy life than that I am realistic about having a very limited number of good active retirement years when I can do things like extensive travel(in normal times at least).
This is the way I look at it. Not how many years we might have left, but how many healthy, active years and whether there are non-career things we want to accomplish in that timeframe.

Once you have enough, the decision whether to retire is a very personal one dependent on where you find joy and what you want to do with the rest of your time.

OP, you clearly can afford to retire and appear to recognize that with the exception of mentioning slight concern with LTCi. I agree with Watty’s comments in this regard, especially in your situation where you are not concerned with leaving an inheritance (no kids).

It boils down to whether you enjoy your work or would rather be doing something else with the time remaining in healthy, active years left.
If you don't do stuff, then you don't do stuff.
jimmy2040
Posts: 33
Joined: Sat May 09, 2020 1:52 pm

Re: Deciding whether to retire - it's difficult!

Post by jimmy2040 »

Do you or your spouse have past coworkers who passed away near or soon after 60?

If I were you, I would wait until next year after the coronavirus dies down a little.

In the mean time, slowly spend less time on work and see whether you can put in less effort and still make the same amount of money.

Try to simulate working as a contractor later on if you choose to.
RedTailedHawk
Posts: 10
Joined: Mon Oct 21, 2019 12:04 pm

Re: Deciding whether to retire - it's difficult!

Post by RedTailedHawk »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm what got you over the hump, psychologically speaking?
Short answer: I didn't want to work anymore. At 55 I was closer to the end than the beginning. We had enough to retire.

I was not looking forward to going to work each day. Been retired for almost 2 years and I can't imagine going to work now, even if it's part time. I was an engineer so anything I do no matter how small would involve some commitment to schedule, some responsibility for a quality product. It's something that is no longer appealing to me. Retirement has been liberating, a lot less stress, doing things because I want to not because I have to.

If you wake up everyday and you can't wait to go to work, don't stop working. Otherwise, de-prioritize work right now. Take every Friday off and do what you want to do, or take that time to figure out what you want to do if you don't have to work for money anymore. Not only that you can afford to retire, you can afford to explore what retirement could be before making the move. Do the latter at least.
User avatar
Sandi_k
Posts: 1515
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Deciding whether to retire - it's difficult!

Post by Sandi_k »

If you're concerned about if it's "time" yet, or what you'll do in retirement, offer to go to 60%/3 days per week.

You can offer it as a voluntary reduction during COVID times.

Get the bonus and payout for this year, and use the next 6 months to plot out your income sources, your expenses, and figure out a plan for health care costs. Note that COBRA could help with that. In CA, for example, they have extended federal COBRA regulations, so that residents get 36 months of COBRA total.

That means I can retire the day after my DH turns 62 (I'll be 60 and 2 months old), and he'll be covered with either COBRA or Medicare from here on out...and I would only have to pay for myself on the marketplace for ages 63 and 64.

Plot it out - it will be very reassuring, I promise. You have enough to easily spend $100k per year while you delay SocSecurity to age 70. and then INCREASE your spending between SS and RMDs.
flyingaway
Posts: 3032
Joined: Fri Jan 17, 2014 10:19 am

Re: Deciding whether to retire - it's difficult!

Post by flyingaway »

I would suggest that the OP find some interesting things to do in retirement that will double their spending. They have more than enough money. As they age, it will be much more difficult to spend the money they have.
User avatar
JoeRetire
Posts: 6001
Joined: Tue Jan 16, 2018 2:44 pm

Re: Deciding whether to retire - it's difficult!

Post by JoeRetire »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm
We have no long-term care insurance and that worries me just a bit.
Easy cure for that worry - purchase some.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
jjface
Posts: 3088
Joined: Thu Mar 19, 2015 6:18 pm

Re: Deciding whether to retire - it's difficult!

Post by jjface »

You have plenty of money saved so no worries about that. I am always amazed at how nervous some are when they have 75k expenses and $4m and that is before SS which will probably cover half of your expenses or more. So you have the means to quit work.

You just need to work on the desire to quit. I am also amazed at how many seem to struggle with knowing what to do. I am not retired but can't imagine myself ever having enough time in the day. Hobbies, pets, exercise, volunteer, travel, help people etc etc. Do all the things you've always wanted to do. If you love your job see if they will let you go part time. Maybe time it so both your wife and you retire at the same time.
User avatar
geerhardusvos
Posts: 1289
Joined: Wed Oct 23, 2019 10:20 pm
Location: heavenlies

Re: Deciding whether to retire - it's difficult!

Post by geerhardusvos »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm :confused I have always assumed that I would work until age 65, but in recent months, I have begun to question that assumption. Financially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this. If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?

Pros (for retirement)
We have significant savings accumulated (net worth of $5 million) at this stage of our lives
DW could put me on her health coverage at work
No kids - any remaining savings when we are gone would just go to charity
My job often consumes 50+ hours a week, which is one reason why I don't have more hobbies :(

Cons
I feel like I haven't thought enough about what I would do to occupy myself, after retirement
I still like what I'm doing for the most part at work, although less than I did five years ago
No kids - DW and I are on our own, and the boglehead in me wants to keep adding to our financial safety net, with my income :moneybag
My parents, in their mid-80s, are still alive and I think of myself as their safety net, although they are currently self-sufficient

Our current situation:
  • My age: 60. DW’s age: 55, with current plans to work until 62. Both in good health; no kids.
  • Both of us work for megacorps with no pension. According to ssa.gov, my projected Social Security benefit would be around $3,200 at full retirement age and $2,200 at early retirement. We have only begun to think about the interaction of my SS benefits and DW’s, and obviously there is a lot to consider there. But based on our savings (below), I would not be inclined to begin drawing Social Security early.
  • We live and work in a relatively HCOL area. Our 3,000 sf home was built in 2010 and worth $1 million, and we paid off our mortgage early in 2019. We have no other debt. Our thought is that we would downsize after both of us retire and instead have two smaller residences in lower cost-of-living areas, one warm and one cool.
  • I earn roughly $160 thousand per year, plus RSUs that have typically take me well over $200 thousand in recent years; DW earns $100 thousand. We both work in the finance and accounting space, and consulting or part-time opportunities would likely be available to me.
  • We have no long-term care insurance and that worries me just a bit.
  • In addition to our home, we have accumulated roughly $4 million in savings. Currently my retirement accounts, mostly in 2025 target date funds, are worth $950 thousand. DW’s balances, mainly in 2030 target date funds, are worth about the same. Of the combined $1.3 million in retirement accounts, only about $300 thousand is in Roth accounts.
  • Our other savings include taxable brokerage accounts (roughly $1 million, with an AA of 60/30, excluding 10% in cash); high yield savings ($450 thousand) and iBonds ($160 thousand). I also have $500 thousand in RSUs that vested 4-8 years ago and which I didn’t sell (more recently I have always sold on the vest date).
  • Looking at Quicken over the past couple of years, our annual expenses seem to run around $75 thousand a year, including some travel.
Don’t overthink this, you could’ve retired five or more years ago. Just do what you want, because you are already set. Now focus on giving back and loving the people in your life. Enjoy!
VTSAX and chill
orangesherbet
Posts: 58
Joined: Sun Mar 10, 2019 6:43 pm

Re: Deciding whether to retire - it's difficult!

Post by orangesherbet »

Financially clearly you *can* retire - so it seems like the question is really if you enjoy this work or if you'd rather do something else?

Not totally the same situation as you, but I went to half-time as an independent contractor many years ago, and find it to be the best balance for me. When I have no work at all, it's nice for a few weeks or a month, but then I start getting itchy. And I do have hobbies already, as well as kids who need my time. I find I simply like to work, and use my brain in that capacity. However, I far prefer working part-time than full-time. For me it's the perfect balance. I also like the idea that someone had upthread - can you take a trial run of some sort and see how it goes? Take a long vacation or a sabbatical?
quantAndHold
Posts: 5152
Joined: Thu Sep 17, 2015 10:39 pm

Re: Deciding whether to retire - it's difficult!

Post by quantAndHold »

$5M in assets, $75k in annual spending, and a wife who's still making $100k? Any reasons you have for not retiring are not financial.

What do you *want* to do with your time and money?

COVID makes decisions like this more difficult. As a young retiree, I'm definitely having less fun than I was before COVID, to the point where I'm considering going back to work. But before COVID, the decision to not work was a no brainer. My wife and I were having the best time of our lives.

I'm not someone who thinks that you have to have a plan for what to do before you pull the trigger. Not working will give you the time and mental space to try things out and figure out what you want to do. The trouble with COVID is that it removes a lot of the best options.
Yes, I’m really that pedantic.
Wrench
Posts: 169
Joined: Sun Apr 28, 2019 10:21 am

Re: Deciding whether to retire - it's difficult!

Post by Wrench »

I would agree with OP, it's difficult! I've retired twice. What I realized was there are three reasons for working (at least for me): (1) income, (2) to feel that one is doing something of value, and (3) for social interactions with co-workers. At a certain point, #1 becomes the least important - I think that's where OP is, and I'm there too (though with a lot less than OP). The other two factors depend on each individual, but for me, they are pretty important.

Both times when I retired, my wife was still working. I did not have a plan of what I was going to do, or how I was going to spend my time. I mostly just puttered around the house and worked on the HoneyDo list. That was fine for a few months, but I got bored and lonely, and felt incredibly non-productive. So, I went back to work. Each time at a different place, with a different type of job. I found it refreshing, interesting and fun to do something different. Pay was less in each case, but also so were the demands, the stress, and the hours. The income is nice (who doesn't like a paycheck?) but the interactions with co-workers and feeling like I am making a valuable contribution to the organization is what makes it worthwhile to me. Now, I am planning to retire for good within the next year or two. But this time, I will have a plan on how I will spend my time, on how to feel like I am being useful, and for maintaining varied social relationships.
BH_RedRan
Posts: 99
Joined: Thu Apr 04, 2019 4:27 pm

Re: Deciding whether to retire - it's difficult!

Post by BH_RedRan »

For me, in a very similar situation as OP it took about 6 months from the "hey, I can I retire, why didn't I think of this before?" to "I'm retiring, I don't like working all that much". I pulled the trigger (almost) and convinced my wife to do the same (ages 58/60 Yrs). It took her a few months to get comfortable with it but the momentum for both of us built quickly. That may be what happens for you once the idea sounds less foreign to you. We both have situations where we can part-time consult and have benefits for a couple of years so that helped seal the deal for us.
kleiner
Posts: 27
Joined: Tue Jun 02, 2020 8:45 am

Re: Deciding whether to retire - it's difficult!

Post by kleiner »

I have some eerie similarities with the OP's situation. I am in my late 50s with savings of about $5M invested plus a fully paid off house and with no other debt. Also, exactly like the OP, my wife plans to keep working - in fact we have always been on her health insurance as my company's plan was not as generous.

I work in advanced software research in AI. At one point, I enjoyed my work so much that I planned to keep working as long as I could. However, I have increasingly become jaded and I plan to quit this year soon after some RSUs vest. I still plan to write software but just for my own pleasure.
Chuck107
Posts: 507
Joined: Tue Sep 04, 2012 11:47 pm

Re: Deciding whether to retire - it's difficult!

Post by Chuck107 »

.....
Last edited by Chuck107 on Mon Oct 05, 2020 7:32 am, edited 1 time in total.
Alas, I find moderation of this forum too restrictive for my tastes, farewell.
Needtoknow
Posts: 125
Joined: Sun Apr 01, 2012 11:19 am

Re: Deciding whether to retire - it's difficult!

Post by Needtoknow »

I believe it’s a no brainer even to you if can retire. You don’t need to ask us that. You know this already. The question you need to answer is if you want to retire. Finances are not the issue. It’s how you’d like to spend your time in retirement.
ClaycordJCA
Posts: 358
Joined: Sun Aug 09, 2015 11:19 pm
Location: SF Bay Area

Re: Deciding whether to retire - it's difficult!

Post by ClaycordJCA »

Sandi_k wrote: Sun Jul 19, 2020 1:59 pm In CA, for example, they have extended federal COBRA regulations, so that residents get 36 months of COBRA total.

That means I can retire the day after my DH turns 62 (I'll be 60 and 2 months old), and he'll be covered with either COBRA or Medicare from here on out...and I would only have to pay for myself on the marketplace for ages 63 and 64.
There are exceptions to the 18-month Cal-COBRA extension, so you should confirm they are not applicable in your situation. My employer’s plan is self-funded and out of state, so I am out of luck. But California now requires residents to have medical insurance; I expect Covered California will continue in some fashion even if the ACA is tossed out by the Supreme Court.
User avatar
Sandi_k
Posts: 1515
Joined: Sat May 16, 2015 11:55 am
Location: SF Bay Area

Re: Deciding whether to retire - it's difficult!

Post by Sandi_k »

ClaycordJCA wrote: Mon Jul 20, 2020 12:51 am
Sandi_k wrote: Sun Jul 19, 2020 1:59 pm In CA, for example, they have extended federal COBRA regulations, so that residents get 36 months of COBRA total.

That means I can retire the day after my DH turns 62 (I'll be 60 and 2 months old), and he'll be covered with either COBRA or Medicare from here on out...and I would only have to pay for myself on the marketplace for ages 63 and 64.
There are exceptions to the 18-month Cal-COBRA extension, so you should confirm they are not applicable in your situation. My employer’s plan is self-funded and out of state, so I am out of luck. But California now requires residents to have medical insurance; I expect Covered California will continue in some fashion even if the ACA is tossed out by the Supreme Court.
We've had this convo before. Yes, I have confirmed that exceptions do not apply, and we're covered.
Valuethinker
Posts: 41449
Joined: Fri May 11, 2007 11:07 am

Re: Deciding whether to retire - it's difficult!

Post by Valuethinker »

CardinalRule wrote: Sat Jul 18, 2020 5:45 pm :confused I have always assumed that I would work until age 65, but in recent months, I have begun to question that assumption. Financially, it seems that I could retire early, if one wants to refer to 60 or 61 as "early," but I have been truly struggling with the decision. I would love to hear any opinions on this. If you have retired yourself a little early, while still making good money, what got you over the hump, psychologically speaking?

Pros (for retirement)
We have significant savings accumulated (net worth of $5 million) at this stage of our lives
DW could put me on her health coverage at work
No kids - any remaining savings when we are gone would just go to charity
My job often consumes 50+ hours a week, which is one reason why I don't have more hobbies :(

Cons
I feel like I haven't thought enough about what I would do to occupy myself, after retirement
I still like what I'm doing for the most part at work, although less than I did five years ago
No kids - DW and I are on our own, and the boglehead in me wants to keep adding to our financial safety net, with my income :moneybag
My parents, in their mid-80s, are still alive and I think of myself as their safety net, although they are currently self-sufficient

Our current situation:
  • My age: 60. DW’s age: 55, with current plans to work until 62. Both in good health; no kids.
  • Both of us work for megacorps with no pension. According to ssa.gov, my projected Social Security benefit would be around $3,200 at full retirement age and $2,200 at early retirement. We have only begun to think about the interaction of my SS benefits and DW’s, and obviously there is a lot to consider there. But based on our savings (below), I would not be inclined to begin drawing Social Security early.
  • We live and work in a relatively HCOL area. Our 3,000 sf home was built in 2010 and worth $1 million, and we paid off our mortgage early in 2019. We have no other debt. Our thought is that we would downsize after both of us retire and instead have two smaller residences in lower cost-of-living areas, one warm and one cool.
  • I earn roughly $160 thousand per year, plus RSUs that have typically take me well over $200 thousand in recent years; DW earns $100 thousand. We both work in the finance and accounting space, and consulting or part-time opportunities would likely be available to me.
  • We have no long-term care insurance and that worries me just a bit.
  • In addition to our home, we have accumulated roughly $4 million in savings. Currently my retirement accounts, mostly in 2025 target date funds, are worth $950 thousand. DW’s balances, mainly in 2030 target date funds, are worth about the same. Of the combined $1.3 million in retirement accounts, only about $300 thousand is in Roth accounts.
  • Our other savings include taxable brokerage accounts (roughly $1 million, with an AA of 60/30, excluding 10% in cash); high yield savings ($450 thousand) and iBonds ($160 thousand). I also have $500 thousand in RSUs that vested 4-8 years ago and which I didn’t sell (more recently I have always sold on the vest date).
  • Looking at Quicken over the past couple of years, our annual expenses seem to run around $75 thousand a year, including some travel.
The unsold RSUs stick out like a sore thumb. I would not count on any of that money (just for caution).

I think the idea of proceeding with consulting or part-time opportunities is an excellent way to smooth transition.

Remember that delaying Social Security is increasing your inflation protection given that it is CPI indexed. However there are interactions with other benefits & with state taxes, I believe - I am not US based so please investigate don't take my words for it.

You probably have too much property but then most of us who live in HCOL areas do. You have to decide how much you value your current location, community etc. If you do "second home" make sure you have rented for a period before buying - it's very different living in a place from just visiting.

In the US you have to think carefully about health insurance pre 65 - individual options can be very expensive, I believe. Also you are right to think about care home insurance.

You have more than enough savings. If your company comes looking for volunteers to go you might well want to consider it. I've seen too many cases where people held on, and then were laid off - even if financially OK, the personal hurt stays with you. Try to remain in control of the situation as best you can in the context of multinational organisation.

Main challenge is finding things to do in retirement to give you a sense of purpose and engagement. Your job has likely been your life for the last 40 years?
MDfan
Posts: 403
Joined: Tue Oct 18, 2016 7:32 am

Re: Deciding whether to retire - it's difficult!

Post by MDfan »

makingmistakes wrote: Sun Jul 19, 2020 6:43 am
student wrote: Sun Jul 19, 2020 6:29 am Do you hate your job or is it just the 50+ hours that is the issue? I would not retire until the pandemic is over and there is more clarity on the economy.
Is every Boglehead this wealthy such that things are still uncertain economically even with 5 million dollars at age 60 with a wife still making $100k?

I can understand one needs to consider all angles, but financially for this situation? I guess I need to find a forum for the middle class.
I don't have that much saved (but do have a pension), our expenses are a good bit higher, but I'm definitely pulling the plug next year at 60, pandemic or not. It seems crazy for anyone to suggest that someone with that level of assets can't retire whenever he chooses to. If anything, the pandemic is the reason I'm not waiting past 60.
Post Reply