Can I retire at age 40?

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Bacchus01
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Re: Can I retire at age 40?

Post by Bacchus01 » Mon Apr 16, 2018 3:16 pm

cfs wrote:
Mon Apr 16, 2018 11:30 am
Yes you can.

No you should not.

You have another twenty productive years ahead of you.

Now just get out there and show everyone that "yes you can" retire AT SIXTY.

Good luck, y gracias por leer ~cfs~
Terrible advice. He owes you nothing. Work does not equal self worth

Snuffycuts99
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Re: Can I retire at age 40?

Post by Snuffycuts99 » Mon Apr 16, 2018 3:36 pm

I would say no. Definitely not at 120k annual spending. If you can get down to 80k, sure give it a go. That's just over 3%, which should be sustainable over the rest of your lifetime. But I doubt that's all that reasonable with 4 kiddos and college approaching. If it were me, I'd save aggressively and target age 45 as the hope, but age 50 as the sure thing. GL

BuckyBadger
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Re: Can I retire at age 40?

Post by BuckyBadger » Mon Apr 16, 2018 3:36 pm

The problem isn't the retiring part, it's the 120k from 2.5mil for 50 years that's the problem.

Although the REAL problem is that the OP thinks he can actively manage and "work" the stock market to maintain these withdrawals. This is not something this board is generally going to support.

If you're willing to drastically cut your budget - like in half - head over to the Mr money moustache boards and they will support you one hundred percent.

abner kravitz
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Re: Can I retire at age 40?

Post by abner kravitz » Mon Apr 16, 2018 3:37 pm

A little too much risk for my taste with 4 children, but congratulations on achieving what you have already.

Olemiss540
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Re: Can I retire at age 40?

Post by Olemiss540 » Mon Apr 16, 2018 4:21 pm

greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Dottie57
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Re: Can I retire at age 40?

Post by Dottie57 » Mon Apr 16, 2018 4:26 pm

Johnretirement wrote:
Mon Apr 16, 2018 8:46 am
This is great stuff.
Currently we have been living off $120,000 and paying $25,000 for a family plan insurance that includes health. Dental. Vision

I did check a little bit on Open market and was coming up with similar pricing albeit higher deductibles. That $120,000 included insurance so really living off 95000 plus insurance.

I kind of enjoy the stock market and have had failures and success. Fortunately a lot more success than failures.

My thought is by actively managing my account I could generate 6% interest but this feedback is good. I might be way overestimating returns.

That is also good advice to factor in thoughts of the teen years.
I was thinking about weddings and college but not teens more expensive than 9 year olds when it comes to activities etc.
Does the 120k include tax and healthcare ( total cost)?

BuckyBadger
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Re: Can I retire at age 40?

Post by BuckyBadger » Mon Apr 16, 2018 4:26 pm

Olemiss540 wrote:
Mon Apr 16, 2018 4:21 pm
greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
That post is saying he'd need double to retire at 40 and withdraw 120k per year.

A modicum of reading comprehension tells me that.

Are you suggesting that he CAN safely withdraw 120k per year for 50+ years from a 2.5mil nest egg?

Dottie57
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Re: Can I retire at age 40?

Post by Dottie57 » Mon Apr 16, 2018 4:45 pm

Olemiss540 wrote:
Mon Apr 16, 2018 4:21 pm
greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
OP clearly stated his spending in first post. People responded with that in mind.

marcopolo
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Re: Can I retire at age 40?

Post by marcopolo » Mon Apr 16, 2018 4:48 pm

BuckyBadger wrote:
Mon Apr 16, 2018 4:26 pm
Olemiss540 wrote:
Mon Apr 16, 2018 4:21 pm
greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
That post is saying he'd need double to retire at 40 and withdraw 120k per year.

A modicum of reading comprehension tells me that.

Are you suggesting that he CAN safely withdraw 120k per year for 50+ years from a 2.5mil nest egg?
While I completely agree that it is VERY risky to try to extract $120k (inflation adjusted?) from a $2.5M portfolio, I don't see how the quoted post is making that point. If that were the case, what does having 4 kids have to do with sustainable withdrawal amounts?
Once in a while you get shown the light, in the strangest of places if you look at it right.

Olemiss540
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Re: Can I retire at age 40?

Post by Olemiss540 » Mon Apr 16, 2018 4:59 pm

marcopolo wrote:
Mon Apr 16, 2018 4:48 pm
BuckyBadger wrote:
Mon Apr 16, 2018 4:26 pm
Olemiss540 wrote:
Mon Apr 16, 2018 4:21 pm
greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
That post is saying he'd need double to retire at 40 and withdraw 120k per year.

A modicum of reading comprehension tells me that.

Are you suggesting that he CAN safely withdraw 120k per year for 50+ years from a 2.5mil nest egg?
While I completely agree that it is VERY risky to try to extract $120k (inflation adjusted?) from a $2.5M portfolio, I don't see how the quoted post is making that point. If that were the case, what does having 4 kids have to do with sustainable withdrawal amounts?
Thank you. How many posts had college costs and the number of kids as reasoning?

My reading comprehension might be exhausted but this forum definitely tends to lean conservative.

If a 3.5% withdrawal rate puts you in the top 25% of income earners in the US, it's hard to imagine why the constant negativity from a bulk majority of these responses. The fact that I have been quoted 4 times should give you a good idea of the types of responses you will get around here when it comes to FIRE.

I love this forum, don't get me wrong. Just wish I had 2.8 million dollars!
I hold index funds because I do not overestimate my ability to pick stocks OR stock pickers.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Mon Apr 16, 2018 5:01 pm

Know I’m not answering all the questions posed to me yet.

But the $120,000 includes paying for health insurance and taxes.

But the general consensus is close but not yet.
And I realize that. Which is why I’m planning.
Planning for what I need to do I order to get there.

My goal is to spend more time with my kids while they are young. And exercise. And be involved.

My hope is that I can continue to do same job but less hours (even less pay)

But have a life. Travel more but keep extra expenditures in reason. Live within a budget of course.

But my calculations do involve getting better returns then it seems the consensus thinks can be done consistently over time

I am meaning stocks and mutual funds and swing trading (and day trading in certain circumstances). So definitely risk is high there.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Mon Apr 16, 2018 5:09 pm

I came up with the 6% based off half of this

https://www.daveramsey.com/blog/the-12-reality

And finding other data that seemed to reflect 8/10 average per year on average over time.

Definitely realize that there are terrible times in the market. We are probably heading into one sometime in the next decade. I do get that. But even in bad markets there are good stocks and you can short the market as well in bear markets. High risk. Yes. But if it was my full time job maybe. Or I’m delusional haha. But it’s on my mind. So I wanted to bring it up to get some solid advice. Figured this was a good place to have that conversation.

marcopolo
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Re: Can I retire at age 40?

Post by marcopolo » Mon Apr 16, 2018 5:14 pm

Olemiss540 wrote:
Mon Apr 16, 2018 4:59 pm
marcopolo wrote:
Mon Apr 16, 2018 4:48 pm
BuckyBadger wrote:
Mon Apr 16, 2018 4:26 pm
Olemiss540 wrote:
Mon Apr 16, 2018 4:21 pm
greg24 wrote:
Mon Apr 16, 2018 2:04 pm


Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Literally? Really? I made it 5 posts in before this:

"I don’t think you can. Def not w 4 kids. Off top of my head, u prob need double that ie like 5
Mln"

Thanks,
That post is saying he'd need double to retire at 40 and withdraw 120k per year.

A modicum of reading comprehension tells me that.

Are you suggesting that he CAN safely withdraw 120k per year for 50+ years from a 2.5mil nest egg?
While I completely agree that it is VERY risky to try to extract $120k (inflation adjusted?) from a $2.5M portfolio, I don't see how the quoted post is making that point. If that were the case, what does having 4 kids have to do with sustainable withdrawal amounts?
Thank you. How many posts had college costs and the number of kids as reasoning?

My reading comprehension might be exhausted but this forum definitely tends to lean conservative.

If a 3.5% withdrawal rate puts you in the top 25% of income earners in the US, it's hard to imagine why the constant negativity from a bulk majority of these responses. The fact that I have been quoted 4 times should give you a good idea of the types of responses you will get around here when it comes to FIRE.

I love this forum, don't get me wrong. Just wish I had 2.8 million dollars!

There really are two separate issues here:

1) Can you safely take $120k from a $2.5M portfolio starting at age 40. I think there is pretty good consensus in the group that it would be a VERY risky plan to do that

2) Is $120K sufficient to cover necessary expenses for a family of six, with 4 young kids, college, health insurance, etc. I doubt you will get much consensus on that question on this forum.

The OP did ask if there were things he was missing. So, i think it is fine addressing both, or either, of those questions. Some people seem to have conflated those two issues.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Snuffycuts99
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Re: Can I retire at age 40?

Post by Snuffycuts99 » Mon Apr 16, 2018 5:16 pm

I'm way more conservative than you, but I certainly would not be 'day trading' when I already have a 2.8 million dollar nut and am trying to reach FIRE. But I'm not gonna tell you what to do, because you've been doing well to get where you are. But, I might ask, and considering your age, have your gains due to day trading been primarily in the past 9 years? It's not as hard to day trade during a roaring bull market. It's when things go south that day trading can really go south. GL

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TimeRunner
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Re: Can I retire at age 40?

Post by TimeRunner » Mon Apr 16, 2018 5:18 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:01 pm
But my calculations do involve getting better returns then it seems the consensus thinks can be done consistently over time.

I am meaning stocks and mutual funds and swing trading (and day trading in certain circumstances). So definitely risk is high there.
Done right and well, this sounds like work, not retirement. :wink:
One cannot enlighten the unconscious. | Endurance athletes are the Bogleheads of sports. | "I like people - I just don't want to be around 'em." - Russell Gordy

Bacchus01
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Re: Can I retire at age 40?

Post by Bacchus01 » Mon Apr 16, 2018 5:40 pm

Wait, day trading?

I really hope your spouse works.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Mon Apr 16, 2018 5:43 pm

Yes the wealth is a combination of well paying job (that has its downside of too much time invested) and then having money to take risks in stock market that paid off considerably. But realistic enough to know they won’t always. And some big misses make it that much harder to do.

Currently my job is heavy hours in the evening. So family conflicts are the issue. Kids are schooling during the day.
If I worked the market... I’d be working during the day (and exercising and other hobbies) and then evenings with the family

But it could be me just dreaming and less realistic than I was thinking.

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Pajamas
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Re: Can I retire at age 40?

Post by Pajamas » Mon Apr 16, 2018 5:44 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:01 pm
But my calculations do involve getting better returns then it seems the consensus thinks can be done consistently over time

I am meaning stocks and mutual funds and swing trading (and day trading in certain circumstances). So definitely risk is high there.
There is a lot of risk in short-term trading and you certainly won't get approval from Bogleheads to rely on it for income. Don't confuse trading with investing. You have been fortunate in the past, but unfortunately it has emboldened you. You would be wise to acknowledge your past good fortune and not expect it to continue indefinitely. Be smart about what you should do with the $2.5 million.

Please come back in three years and give an update.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Mon Apr 16, 2018 5:45 pm

Where would you all recommend me to learn more about investing outside the stock market side of things. It seems that is considered a negative thing based on the replies im getting

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Pajamas
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Re: Can I retire at age 40?

Post by Pajamas » Mon Apr 16, 2018 5:48 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:45 pm
Where would you all recommend me to learn more about investing outside the stock market side of things. It seems that is considered a negative thing based on the replies im getting
Don't confuse investing with trading.

Start here:

https://www.bogleheads.org/wiki/Getting_started

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Clever_Username
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Re: Can I retire at age 40?

Post by Clever_Username » Mon Apr 16, 2018 5:56 pm

greg24 wrote:
Mon Apr 16, 2018 2:04 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg.
Literally nobody has said that.

People have stated that the portfolio wouldn't support a $120k annual withdrawal figure.

The OP can certainly support a family of 5 if they reduce their withdrawal rate.
Right, and that's the bigger deal. Fill my accounts up to $2.8M right now and I could sustain my desired lifestyle going forward from today (single, no kids, and I will turn 35 later this year). But I'd need to pull out maybe 1.5% from that 2.8M.
Johnretirement wrote:
Mon Apr 16, 2018 5:45 pm
Where would you all recommend me to learn more about investing outside the stock market side of things. It seems that is considered a negative thing based on the replies im getting
Bonds are investing outside the stock market. Is that what you mean? Bonds aren't negative, they're great.
"What was true then is true now. Have a plan. Stick to it." -- XXXX, _Layer Cake_

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Mon Apr 16, 2018 5:57 pm

Pajamas wrote:
Mon Apr 16, 2018 5:48 pm
Johnretirement wrote:
Mon Apr 16, 2018 5:45 pm
Where would you all recommend me to learn more about investing outside the stock market side of things. It seems that is considered a negative thing based on the replies im getting
Don't confuse investing with trading.

Start here:

https://www.bogleheads.org/wiki/Getting_started
I look forward to reading this. Thank you.

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HomerJ
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Re: Can I retire at age 40?

Post by HomerJ » Mon Apr 16, 2018 5:59 pm

Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
2.8 Mil? Yup. I sure as heck would give it a run. Try and live off of 80k a year and spend some time with the family.

Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg. I guess we all need someone paying into social security to keep it afloat.
Almost none of us here said that. We all said exactly what you said... "80k a year, you can do... 120k a year is somewhat risky".

Weird that you read our responses so differently.

Dottie57
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Re: Can I retire at age 40?

Post by Dottie57 » Mon Apr 16, 2018 6:43 pm

HomerJ wrote:
Mon Apr 16, 2018 5:59 pm
Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
2.8 Mil? Yup. I sure as heck would give it a run. Try and live off of 80k a year and spend some time with the family.

Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg. I guess we all need someone paying into social security to keep it afloat.
Almost none of us here said that. We all said exactly what you said... "80k a year, you can do... 120k a year is somewhat risky".

Weird that you read our responses so differently.
+1

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HomerJ
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Re: Can I retire at age 40?

Post by HomerJ » Mon Apr 16, 2018 8:01 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:43 pm
Yes the wealth is a combination of well paying job (that has its downside of too much time invested) and then having money to take risks in stock market that paid off considerably. But realistic enough to know they won’t always. And some big misses make it that much harder to do.

Currently my job is heavy hours in the evening. So family conflicts are the issue. Kids are schooling during the day.
If I worked the market... I’d be working during the day (and exercising and other hobbies) and then evenings with the family

But it could be me just dreaming and less realistic than I was thinking.
Just get a different job. You're right on the edge of set.

You don't need a high-paying job anymore. Do something that gives you a decent work-life balance.

My wife HATED her job. We didn't have enough to retire yet, but we were at the point where we didn't need to save much anymore. The day we paid off the house, she quit her job. Best decision ever. She took a year off, and then found a new part-time job by accident. It pays 1/2 of what she used to make, but 1/4 of the hours (she used to travel and work evenings too). It was a great trade.

You are in a position where you can't quite quit forever, but you are definitely in a position where you can quit your CURRENT job. Find something else that you like. You need to make something, but you don't have a choose a job for money anymore.

Re-invent yourself. You're free.

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HomerJ
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Re: Can I retire at age 40?

Post by HomerJ » Mon Apr 16, 2018 8:04 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:09 pm
I came up with the 6% based off half of this

https://www.daveramsey.com/blog/the-12-reality

And finding other data that seemed to reflect 8/10 average per year on average over time.

Definitely realize that there are terrible times in the market. We are probably heading into one sometime in the next decade. I do get that. But even in bad markets there are good stocks and you can short the market as well in bear markets. High risk. Yes. But if it was my full time job maybe. Or I’m delusional haha. But it’s on my mind. So I wanted to bring it up to get some solid advice. Figured this was a good place to have that conversation.
Oh, and do NOT day-trade to make money. You are absolutely indeed delusional to think you can short the market and day-trade your way to a secure retirement.

Read some of the books in the wiki. I highly recommend "The Four Pillars of Investing".

folkher0
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Re: Can I retire at age 40?

Post by folkher0 » Mon Apr 16, 2018 9:00 pm

HomerJ wrote:
Mon Apr 16, 2018 8:01 pm
Johnretirement wrote:
Mon Apr 16, 2018 5:43 pm
Yes the wealth is a combination of well paying job (that has its downside of too much time invested) and then having money to take risks in stock market that paid off considerably. But realistic enough to know they won’t always. And some big misses make it that much harder to do.

Currently my job is heavy hours in the evening. So family conflicts are the issue. Kids are schooling during the day.
If I worked the market... I’d be working during the day (and exercising and other hobbies) and then evenings with the family

But it could be me just dreaming and less realistic than I was thinking.
Just get a different job. You're right on the edge of set.

You don't need a high-paying job anymore. Do something that gives you a decent work-life balance.

My wife HATED her job. We didn't have enough to retire yet, but we were at the point where we didn't need to save much anymore. The day we paid off the house, she quit her job. Best decision ever. She took a year off, and then found a new part-time job by accident. It pays 1/2 of what she used to make, but 1/4 of the hours (she used to travel and work evenings too). It was a great trade.

You are in a position where you can't quite quit forever, but you are definitely in a position where you can quit your CURRENT job. Find something else that you like. You need to make something, but you don't have a choose a job for money anymore.

Re-invent yourself. You're free.
This.

Seems to me you need $120,000 a year to live he lifestyle you want and support your kids. Your spouse has a job. Does he/she like it? Could it provide your family with health insurance? Seems like you only need to fill in $120,000 - spouses salary - health coverage. Could you do that doing something you enjoy? Maybe in a way that leaves you plenty of time to take very long, very kick ass summer vacations with the kids. Call it semi-retirement.

With kids that age you probably won't be taking a round the world cruise or a year back packing the Himalayas anyway. Lots of packing lunches an soccer practice. An easy part time gig could fit in nicely.

Do that for five years then run the numbers again.

Btw I have no business giving you advice--you're in a much better position then me.

md&pharmacist
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Re: Can I retire at age 40?

Post by md&pharmacist » Mon Apr 16, 2018 9:00 pm

OP, You may be under-estimating risk.

What if you early retire and the next significant correction of 40-50% occurs soon thereafter? Are you prepared for this potential scenario. The $2.8 mil can drop to $1.4 million. Let's say it doubles again over the next 5 years. You will not be back to $2.8 million because you will be withdrawing $120,000/year x 5 years = $600,000. Now you are at just around $2.2 million after 5 years - That's over 21% of the portfolio lost over just 5 years.

I have far more than $2.8 million at current age 45 with two teenage children and am still nervous about finances. Four young children means potentially 4 first cars(think car repair/maintenance costs, teenager drivers insurance costs, gas costs x 4), 4 x expensive sports activities, 6x monthly cell phone bill, 4 x private school and/or college tuition, 4 x graduate school?, 4 x wedding expenses...etc. It adds up quickly and continues to increase as children get older. You can do it if you spend modestly on $120,000/year (approx. $90,000/yr after taxes) but it will likely be tighter than you think.

The Bogleheads that know me know my investment style is unorthodox, but even I cannot recommend day trading stocks. Serious danger here, especially in the current lofty market. Besides if you day trade you will not be spending time with the kids and on vacations. You will be glued to the TV/computer during normal and extended trading hours and business news before and after that.

It's best you continue to work but work less if you wish to have more free time. I also worked excessive hours initially but now am hiring employed providers to continue to cut back on my own work hours. Definitely preserve your health regardless.

You need to continue to research and seek advice and most of all before making any major decisions, make sure your spouse is on the same page with budget spending plans and retirement activities/goals. Another risk is if one of you hates the decision down the road - how difficult or easy is it to reverse course or find a new career?

Congratulations on the good decisions you made to date and I am sure you will continue to make well informed decisions to continue your success in both money and life.

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willthrill81
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Re: Can I retire at age 40?

Post by willthrill81 » Mon Apr 16, 2018 9:25 pm

Johnretirement wrote:
Mon Apr 16, 2018 5:09 pm
I came up with the 6% based off half of this

https://www.daveramsey.com/blog/the-12-reality

And finding other data that seemed to reflect 8/10 average per year on average over time.

Definitely realize that there are terrible times in the market. We are probably heading into one sometime in the next decade. I do get that. But even in bad markets there are good stocks and you can short the market as well in bear markets. High risk. Yes. But if it was my full time job maybe. Or I’m delusional haha. But it’s on my mind. So I wanted to bring it up to get some solid advice. Figured this was a good place to have that conversation.
Dave Ramsey's investment and retirement income advice is horrific. Ignore it wholesale. It's been debunked six ways to Sunday many times over. Seriously.

Day trading is terrible. I've known several who tried it and either lost most of their capital or were back at a 'real job' within a year.

At your age, I'd suggest a withdrawal rate around 3% or slightly higher, which means that you would need close to $4 million. So you're close, perhaps only a few years away.

For a real world look at Justin who retired at 33, go to www.rootofgood.com. He has tons of excellent information, including how he manages his portfolio in a Boglehead fashion.

Regarding the $120k of spending, Justin also has an excellent blog post on spending $40k annually (he has three young kids at home by the way) to get a $100k lifestyle. I think that would be right up your alley. You might find that it's very possible for you to have your desired lifestyle on $80k annually, which is very doable with your current portfolio.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Agggm
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Re: Can I retire at age 40?

Post by Agggm » Mon Apr 16, 2018 10:33 pm

Bacchus01 wrote:
Mon Apr 16, 2018 7:24 am
No.

Find a different job, even if it pays less. Balance.
Exactly.
Not yet.

TPT
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Re: Can I retire at age 40?

Post by TPT » Mon Apr 16, 2018 11:56 pm

Didn't the OP suggest (in a later post) that his wife will continue to work as a public school teacher? I ask because very few of the replies seem to account for the non-negligible effect this would have on the yearly withdrawals from taxable/retirement accounts. The potential consequences of tapping into the retirement funds before hitting retirement age if OP burns through taxable (currently 500k), as mentioned in the first post, seem messy/costly.

OP, if you haven't already stated your wife's salary (if she would indeed keep working), what is it? If there is any possibility of downsizing your home once the kiddos move out (or in event of drawing your retirement down sooner than expected), what's it worth, or how much might you gain by downsizing?

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Tue Apr 17, 2018 12:22 am

TPT wrote:
Mon Apr 16, 2018 11:56 pm
Didn't the OP suggest (in a later post) that his wife will continue to work as a public school teacher? I ask because very few of the replies seem to account for the non-negligible effect this would have on the yearly withdrawals from taxable/retirement accounts. The potential consequences of tapping into the retirement funds before hitting retirement age if OP burns through taxable (currently 500k), as mentioned in the first post, seem messy/costly.

OP, if you haven't already stated your wife's salary (if she would indeed keep working), what is it? If there is any possibility of downsizing your home once the kiddos move out (or in event of drawing your retirement down sooner than expected), what's it worth, or how much might you gain by downsizing?
Unfortunately that was someone else’s example in the post so not part of my outlook.

We definitely could downsize the house if needed. It was valued at $367,000 and could be used as asset later if needed. But not part of current plan to do that.

TPT
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Re: Can I retire at age 40?

Post by TPT » Tue Apr 17, 2018 12:35 am

Johnretirement wrote:
Tue Apr 17, 2018 12:22 am
TPT wrote:
Mon Apr 16, 2018 11:56 pm
Didn't the OP suggest (in a later post) that his wife will continue to work as a public school teacher? I ask because very few of the replies seem to account for the non-negligible effect this would have on the yearly withdrawals from taxable/retirement accounts. The potential consequences of tapping into the retirement funds before hitting retirement age if OP burns through taxable (currently 500k), as mentioned in the first post, seem messy/costly.

OP, if you haven't already stated your wife's salary (if she would indeed keep working), what is it? If there is any possibility of downsizing your home once the kiddos move out (or in event of drawing your retirement down sooner than expected), what's it worth, or how much might you gain by downsizing?
Unfortunately that was someone else’s example in the post so not part of my outlook.

We definitely could downsize the house if needed. It was valued at $367,000 and could be used as asset later if needed. But not part of current plan to do that.
Well...shucks. I should have assumed that it was MY reading comprehension that was off.

If I were you (I find myself in a similar situation but with fewer kids), I'd probably find a cushier gig one way or another to free up evenings but wait to pull the trigger until ~$3.5-4m investable or so.

Tamalak
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Re: Can I retire at age 40?

Post by Tamalak » Tue Apr 17, 2018 2:51 pm

Will OP need 120k a year indefinitely? Wouldn't his needs go down sharply after his kids are grown (say in 10 years)?

5% WR for 10 years followed by say, 3% (72k) after that sounds doable.

The big wildcard is college, if OP is planning to pay for THAT.. might get messy and require even more than 5% for a few years. Also OP needs to give up day trading, that will only increase his risk to a dangerous level. Index funds or bust!

Dottie57
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Re: Can I retire at age 40?

Post by Dottie57 » Tue Apr 17, 2018 2:59 pm

TPT wrote:
Tue Apr 17, 2018 12:35 am
Johnretirement wrote:
Tue Apr 17, 2018 12:22 am
TPT wrote:
Mon Apr 16, 2018 11:56 pm
Didn't the OP suggest (in a later post) that his wife will continue to work as a public school teacher? I ask because very few of the replies seem to account for the non-negligible effect this would have on the yearly withdrawals from taxable/retirement accounts. The potential consequences of tapping into the retirement funds before hitting retirement age if OP burns through taxable (currently 500k), as mentioned in the first post, seem messy/costly.

OP, if you haven't already stated your wife's salary (if she would indeed keep working), what is it? If there is any possibility of downsizing your home once the kiddos move out (or in event of drawing your retirement down sooner than expected), what's it worth, or how much might you gain by downsizing?
Unfortunately that was someone else’s example in the post so not part of my outlook.

We definitely could downsize the house if needed. It was valued at $367,000 and could be used as asset later if needed. But not part of current plan to do that.
Well...shucks. I should have assumed that it was MY reading comprehension that was off.

If I were you (I find myself in a similar situation but with fewer kids), I'd probably find a cushier gig one way or another to free up evenings but wait to pull the trigger until ~$3.5-4m investable or so.
I did the same thing - thought OP had a wife with outside job. I reread and figured I was wrong.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Tue Apr 17, 2018 9:22 pm

Tamalak wrote:
Tue Apr 17, 2018 2:51 pm
Will OP need 120k a year indefinitely? Wouldn't his needs go down sharply after his kids are grown (say in 10 years)?

5% WR for 10 years followed by say, 3% (72k) after that sounds doable.

The big wildcard is college, if OP is planning to pay for THAT.. might get messy and require even more than 5% for a few years. Also OP needs to give up day trading, that will only increase his risk to a dangerous level. Index funds or bust!
No I don’t think we are big spenders. I’m looking forward to reading the 33 year old living Inexpensively blog.
My concern is the kids. So absolutely my expenses will drop significantly when kids are out of the nest.

Since the consensus is avoid day trading. I think I’ll try it on a small scale. Just to see how it goes. But more for fun. I am competitive and like to find the way to win. So my pride tells me I need to try it but I’ll limit it to $30,000 and see if I can grow it or lose it. So I don’t become another number and example many have stated on his thread

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Pajamas
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Re: Can I retire at age 40?

Post by Pajamas » Tue Apr 17, 2018 9:56 pm

Johnretirement wrote:
Tue Apr 17, 2018 9:22 pm
Since the consensus is avoid day trading. I think I’ll try it on a small scale. Just to see how it goes. But more for fun. I am competitive and like to find the way to win. So my pride tells me I need to try it but I’ll limit it to $30,000 and see if I can grow it or lose it. So I don’t become another number and example many have stated on his thread
Be careful, especially if you tend to be prone to addiction to activities or substances. Daytrading is probably more addictive than simple forms of gambling such as slots or poker and has the potential to be much more destructive financially, both in degree and in speed. Be very alert to any negative changes in your behavior and in your familial relationships.

Johnretirement
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Re: Can I retire at age 40?

Post by Johnretirement » Tue Apr 17, 2018 11:59 pm

Pajamas wrote:
Tue Apr 17, 2018 9:56 pm
Johnretirement wrote:
Tue Apr 17, 2018 9:22 pm
Since the consensus is avoid day trading. I think I’ll try it on a small scale. Just to see how it goes. But more for fun. I am competitive and like to find the way to win. So my pride tells me I need to try it but I’ll limit it to $30,000 and see if I can grow it or lose it. So I don’t become another number and example many have stated on his thread
Be careful, especially if you tend to be prone to addiction to activities or substances. Daytrading is probably more addictive than simple forms of gambling such as slots or poker and has the potential to be much more destructive financially, both in degree and in speed. Be very alert to any negative changes in your behavior and in your familial relationships.
Thank you for the post and warning. I can see how it could get like that. It is definitely gambling and viewed as such. Just a bit more socially accepted but no different imo

stlutz
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Re: Can I retire at age 40?

Post by stlutz » Wed Apr 18, 2018 12:05 am

Nothing substantive to add. I would just suggest that your motto should be, "I can do anything, but I can't do nothing."

Tamalak
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Re: Can I retire at age 40?

Post by Tamalak » Wed Apr 18, 2018 7:57 am

Johnretirement wrote:
Tue Apr 17, 2018 9:22 pm
Tamalak wrote:
Tue Apr 17, 2018 2:51 pm
Will OP need 120k a year indefinitely? Wouldn't his needs go down sharply after his kids are grown (say in 10 years)?

5% WR for 10 years followed by say, 3% (72k) after that sounds doable.

The big wildcard is college, if OP is planning to pay for THAT.. might get messy and require even more than 5% for a few years. Also OP needs to give up day trading, that will only increase his risk to a dangerous level. Index funds or bust!
No I don’t think we are big spenders. I’m looking forward to reading the 33 year old living Inexpensively blog.
My concern is the kids. So absolutely my expenses will drop significantly when kids are out of the nest.
What I would do in your shoes is retire, but use the *current* price of my portfolio for the withdrawal rate. So if the market drops 20%, so does your budget. If you can be flexible and perhaps pare down your budget in harsh times, that will increase your success rate by a lot. In fact, by definition you CAN'T run out of money if you do this.

And as said, start with a WR of 5%, then when kids leave, 3%.

You might need to skimp a bit if you get unlucky, but people with 4 kids live successfully on far, far less than 120k

OnTrack2020
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Re: Can I retire at age 40?

Post by OnTrack2020 » Wed Apr 18, 2018 9:08 am

So you are living off $95k plus $25k insurance with a paid off home and vehicles. We also have 4 kids and a paid off home, and I'm thinking you can do it if you cut back on the $95k expenses. Definitely keep your health insurance. You could see where you can cut some of the $95k and start saving for college expenses. It doesn't have to be a lot and every bit will help. I've noticed on this board that people do believe that you will need 100s of thousands of dollars for college. Yes, you will---IF they all go to a private college without any scholarships. But that doesn't happen for the vast majority of kids, and the vast majority of parents don't foot the entire bill for their childrens' college. Starting around age 15/16, kids will be able to work part-time to earn spending money or put toward college, plus kids will also be working in college.

Realistically, (and my husband works) we probably live off around $60k-$65k after taxes, insurance, 401k, HSA, dental, vision, our bills, regular savings, etc. and that's with two kids in college (private and community college). We did live on a little less than that, but we've needed to take some of our yearly dividends to help with college. Plus we have a small car payment. We rarely eat out and take an occasional vacation. And don't forget that you will also get the child tax credit of $2,000 per child until they reach age 17.

And no day trading. There will be plenty to do at home with 4 kids. :)

LiterallyIronic
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Re: Can I retire at age 40?

Post by LiterallyIronic » Wed Apr 18, 2018 9:09 am

Tamalak wrote:
Wed Apr 18, 2018 7:57 am
What I would do in your shoes is retire, but use the *current* price of my portfolio for the withdrawal rate. So if the market drops 20%, so does your budget. If you can be flexible and perhaps pare down your budget in harsh times, that will increase your success rate by a lot. In fact, by definition you CAN'T run out of money if you do this.

And as said, start with a WR of 5%, then when kids leave, 3%.

You might need to skimp a bit if you get unlucky, but people with 4 kids live successfully on far, far less than 120k
Indeed. My sister and her husband have five kids and they live on his income of $44k. Of course, they're also on WIC and Medicaid.

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Re: Can I retire at age 40?

Post by willthrill81 » Wed Apr 18, 2018 9:21 am

LiterallyIronic wrote:
Wed Apr 18, 2018 9:09 am
Tamalak wrote:
Wed Apr 18, 2018 7:57 am
What I would do in your shoes is retire, but use the *current* price of my portfolio for the withdrawal rate. So if the market drops 20%, so does your budget. If you can be flexible and perhaps pare down your budget in harsh times, that will increase your success rate by a lot. In fact, by definition you CAN'T run out of money if you do this.

And as said, start with a WR of 5%, then when kids leave, 3%.

You might need to skimp a bit if you get unlucky, but people with 4 kids live successfully on far, far less than 120k
Indeed. My sister and her husband have five kids and they live on his income of $44k. Of course, they're also on WIC and Medicaid.
Justin at www.rootofgood.com has three kids and has lived very well spending about $30k annually. Their home is paid off, but it's still a pretty amazing feat. Many here who've heard that automatically think that it must be close to child abuse to spend so little, but they travel the world and lead comfortable lives.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

veindoc
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Re: Can I retire at age 40?

Post by veindoc » Wed Apr 18, 2018 9:34 am

OP,

Just find another job. That's what I did. We have about 2 million excluding home equity but we still have a mortgage. College is fairly well taken care of, thanks to earlier savings and grandparents.
.
I did not like my work-life balance but didn't feel like we had enough to retire without too much insecurity. What do we do with the house? How will we pay for son#1's medical bills? But the insecurity was not enough for me to just suck it up and deal with work.

A few things:
Do not quit before you have a new job lined up. I did so and it's a little uncomfortable when people ask, so what are you doing now? In the end it will likely work out, I am awaiting an offer any day now but I probably should have waited to have the job in hand before taking the plunge. These two months off though have been awesome I have to say. In the end with new job, we will still be able to save a significant part of our income although not as much and with much less stress.
In your 14 months, I would shore up the savings a bit. Start looking at ways you can cut back and either increase savings or decrease debt.
I didn't know I was going to quit. I had an inkling but did so a bit impulsively. We placed ourselves on the waiting list for a Tesla 3 and in the meantime leased a Tesla s. Well the lease is up in September and the Tesla 3 likely won't be available until 2019. So now I don't know what we are going to do. Its a big expense with no income coming in which we can handle but still...
Last edited by veindoc on Fri Apr 20, 2018 9:26 pm, edited 1 time in total.

cherijoh
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Re: Can I retire at age 40?

Post by cherijoh » Wed Apr 18, 2018 9:36 am

HomerJ wrote:
Mon Apr 16, 2018 9:51 am
Johnretirement wrote:
Mon Apr 16, 2018 9:23 am
work the stock market for my future finances. (Aka new job)
We've been in a mostly bull market environment for the past 9 years. So sure, you've had a lot of winners.

Are you ready for a bear market?

The reason we say 3% or 4% is because a good chunk of your money should be in bonds or CDs to weather bear markets. If you want to make 6% a year, then you're going to have most of your money in stocks.

Are you ready for the next 50% crash where you lose $1 million dollars, and you're still pulling $120,000 a year?
+1
OP sounds like he is falsely attributing luck to skill. And is possibly confusing nominal and real returns.

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Re: Can I retire at age 40?

Post by cherijoh » Wed Apr 18, 2018 9:44 am

renue74 wrote:
Mon Apr 16, 2018 12:27 pm
Mid-life crisis. I'm there too.

Find another position or scale back.

Thank goodness your wife works for the school system? She should have a group health policy? My wife is a teacher and we do.
It isn't the OP whose wife is a school teacher. OP hasn't said anything about his wife currently working and mentioned purchasing insurance on the open market.
Raabe34 wrote:
Mon Apr 16, 2018 9:50 am
Pajamas wrote:
Mon Apr 16, 2018 9:48 am
Raabe34 wrote:
Mon Apr 16, 2018 9:45 am
I'm in a similar vein that you are but I can't get over the idea of the kids seeing me sit at home while they went to school at those young impressionable ages. The phrase money comes from work get used a bunch here. My oldest(10) has funded a Roth with paper route money and is getting the idea that money can generate more money but I want the work ethic to be seen by all of them until they get old enough to understand that.
Maybe your wife could work to set a good example for them.
She teaches at a public school.

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Re: Can I retire at age 40?

Post by cherijoh » Wed Apr 18, 2018 9:50 am

Olemiss540 wrote:
Mon Apr 16, 2018 1:02 pm
2.8 Mil? Yup. I sure as heck would give it a run. Try and live off of 80k a year and spend some time with the family.

Love the folks who claim it's impossible to support a family of 5 on a $2.8 Mil best egg. I guess we all need someone paying into social security to keep it afloat.
There is a big difference between $80K inclusive of taxes and $120K without accounting for taxes. OP may have accounted for taxes but it doesn't sound like it:
Johnretirement wrote:
Mon Apr 16, 2018 8:46 am
This is great stuff.
Currently we have been living off $120,000 and paying $25,000 for a family plan insurance that includes health. Dental. Vision

I did check a little bit on Open market and was coming up with similar pricing albeit higher deductibles. That $120,000 included insurance so really living off 95000 plus insurance.
Last edited by cherijoh on Wed Apr 18, 2018 9:52 am, edited 1 time in total.

supersecretname
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Re: Can I retire at age 40?

Post by supersecretname » Wed Apr 18, 2018 9:52 am

Yes, if you get a handle on your expenses.

10k/month with a paid off house is....a lot. If you wanted to retire now (which is doable), work on cutting that 10k in half.

cherijoh
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Re: Can I retire at age 40?

Post by cherijoh » Wed Apr 18, 2018 9:56 am

DanMahowny wrote:
Mon Apr 16, 2018 12:27 pm
OP- Do it brother!

I retired at age 42. Fortunately I didn't ask for advice- I'm sure I would've been told to keep working.

My net worth has nearly tripled since I retired 9 years ago.

Work sucks- don't wait until you're old to enjoy your money.
So you retired near the beginning of a really long bull market. OP is looking to retire AFTER a really long bull market and before the next correction. Your experience really is not applicable to the OP.

cherijoh
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Re: Can I retire at age 40?

Post by cherijoh » Wed Apr 18, 2018 10:01 am

Johnretirement wrote:
Mon Apr 16, 2018 5:09 pm
I came up with the 6% based off half of this

https://www.daveramsey.com/blog/the-12-reality

And finding other data that seemed to reflect 8/10 average per year on average over time.

Definitely realize that there are terrible times in the market. We are probably heading into one sometime in the next decade. I do get that. But even in bad markets there are good stocks and you can short the market as well in bear markets. High risk. Yes. But if it was my full time job maybe. Or I’m delusional haha. But it’s on my mind. So I wanted to bring it up to get some solid advice. Figured this was a good place to have that conversation.
Dave Ramsey is great for getting out of debt. But no one here thinks his investment advice is sound. Just do a search for Dave Ramsey threads.

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