Fear of FIRE

[coping]

Hello All. I just found this forum a few days ago and have been enjoying all of your wisdom. Perhaps you could help me out, or at least give me some thoughts or insights.

My situation:
I am married with one child, 19, who just finished his freshman year in college.
I am very, very tired of working. I am 49 years old and have been working since I was 13. I work for MegaCorp and have for 21 years. I am doing well there (just got a promotion, very senior management level, etc.). But, every day I think about how much of my life has been filled with work. Every day I think of all the things I want to spend my time on, but can't. It's really draining and seems to be zapping all the joy from life. By the time I get home in the evening (7:00ish) I'm exhausted and really don't feel like doing anything. Even the weekends feel like "recuperation time" instead of time to do something fun.

Financially:
We have about $4.2M in investments (mostly indexed, some bond funds, and about $600K in 401K).
We own our house (worth about $1.2M)
We have no debt at all.
I make really good money (around $600K a year).
We track our expenses. It's safe to say that we spend too much. However, for the past 6 months we've watched really closely so that we can know what it might be like living off of our investments. All the sites (FIRECalc, etc.) suggest that we can have a very good income from our investments. Of course, it will be quite a bit less that we make today.

The problem:
I know what I'm about to type sounds ridiculous given what I wrote above. But, while I've been thinking about ER for about a year, I seem to have an irrational fear about pulling the trigger. My wife is very supportive (she's been away from work since our son was about 3 years old). And yet, I worry about all kinds of things:
* we'll run out of money
* I'll ruin our (really awesome) marriage
* I'll be bored
* I'll lose contact with people and feel alone
* The market will tank, along with the economy, and I won't be able to find work if needed
* etc., etc., etc.

My wife and I both grew up in much, much leaner circumstances (myself especially, living in poverty when I was young, needing people to bring us food, etc.). So, we know how to live on less, with less, and all that, though it's been a while.

I feel guilty even asking for advice when I clearly have so much to be grateful for. And from reading a lot of similar sites, I do realize (at least I think) I'm in a pretty good spot. And yet, the fear is there.

I have (mostly) decided that I will leave my job at the end of this year. There is a big part of me that is really, really excited about the prospect. And still, the fear is there. Many days, it just seems like the most stupid thing I could do.

Have any of you gone through something similar? Do you have any advice about the process? I really appreciate anything you have to offer.

Thanks

 

[tightasadrum]

Just buy lots of rental property. You won't be bored plus you'll have the benefit of additional income. As a bonus you'll meet lots of new people each time someone moves out.

 

[frayne]

Just my perspective, your fears will still be there if you retire at 50, 55, 60 or 65. If you have a good plan (spending under control), a solid marriage, good friends you should be ok. As for being bored, that is something only you can address. Doesn't make much sense to worry about the things you can't control. If the markets tank, you'll have plenty of company in the soup line.

 

[W2R]

Here is how I dealt with my own fears.

Before I retired, I combatted my (similar) fears by massively over-preparing and over-planning for retirement. I attacked my plans from every possible angle, looking for flaws. By the time I retired, I was sure that my plan is as bulletproof as is humanly possible.

Now that I am retired, I am no longer fearful or worried. I feel sure that I did all that is humanly possible to prepare wisely, and now it is out of my hands.

 

[Meadbh]

Here is how I dealt with my own fears.

Before I retired, I combatted my (similar) fears by massively over-preparing and over-planning for retirement. I attacked my plans from every possible angle, looking for flaws. By the time I retired, I was sure that my plan is as bulletproof as is humanly possible.

Now that I am retired, I am no longer fearful or worried. I feel sure that I did all that is humanly possible to prepare wisely, and now it is out of my hands.

+1
Plan, plan, plan.

In particular, get a good handle on your expenses. It's amazing what you can cut out without any impact on your quality of life, e.g. professional memberships, drycleaning, cable TV, overpriced convenience foods, etc, etc. But first you must document expenses in detail and have that discussion.

Also, get involved in the activities you enjoy. Join social groups and clubs to give your activities a structure and a schedule.

We all worry to some extent, but your numbers suggest that you are in great shape if you control expenses.

 

[Which Roger]

And yet, I worry about all kinds of things:
* we'll run out of money
* I'll ruin our (really awesome) marriage
* I'll be bored
* I'll lose contact with people and feel alone
* The market will tank, along with the economy, and I won't be able to find work if needed
* etc., etc., etc.

I can think of three reasons to be afraid of something. I'll use the first item in your list "we'll run out of money" as an example. If a person is worried about this, it can be for several reasons:
1. They know they don't have enough money. In this case, they should be afraid. But based on what you've told us, that's not the case.
2. They don't know whether or not they have enough money. To quote Phil Collins: "You kill what you fear, and you fear what you don't understand". (I've been waiting for a long time to use that quote! Bonus points for anyone who can name the song that contains that line). The solution if this applies is to learn everything you can to remove fear of the unknown from the equation, then proceed accordingly.
3. The fear is irrational. If this is the case, a lot of soul searching is required to understand the basis for the irrational fear.

Of course there's always some uncertainty mixed in. There's never any 100% guarantee of anything.

Two of the fears you list (being bored and isolated) can be addressed by developing relationships and interests outside of work. It sounds like you already have a lot of this covered since you mention having too many things on your "want to do" list as one of the reasons you're thinking of pulling the plug.

The decision to FIRE shouldn't be taken lightly, and it's about much more than just having enough money. So take some time to sort through everything, and when you do make a decision, you can be confident that it's the correct one.

 

[bikeknit]

A few months before i gave my resignation i listed all the what ifs and my plan b related to them. The stock market tanks by 50%. That leaves us with x. We could adjust our spending here and here and still be ok. How do i avoid frittering my time? I can volunteer at y organization which fits my interestsand will introduce me to people who share those interests. Etc.

 

[GT1 Doug]

* we'll run out of money: We kept extremely detailed records of every dollar we spent for approximately 10 years prior to retiring. We were able to construct very accurate budgets that we have easily attained (note we cheated somewhat in that we have a relatively large discretionary budget item that is never completely used). With some reasonable guesses (we are conservative) we have a long term budget that with our funding we should "easily" meet. Additionally I have found that there are many things that we do that are low or no cost. As a result, after our first year, we are significantly under budget.

* I'll ruin our (really awesome) marriage: We were aware of the definition of retirement: Twice as much husband, half as much money. First, I get to see my incredible wife much more which is a good thing. However, in the interest of matrimonial bliss, we keep our "offices" in separate rooms now. I also enjoy spending time in the garage and in the yard. The result is sufficient time apart. When it comes time to vacations ( or more accurately described as travel now)l, I like much more physical activities (diving, rafting, fishing...), my better half liked a bit more culture. Now we get to do both with out the problem of limited vacation days. I have more time for honey-dos which again works out to a happy wife= a happy life.


* I'll be bored: While I had no specific plan when I left, I have found my time is almost always filled with something to do. I get to fish, dive, and hunt as much as I like. We travel a lot, generally by car, within the state and nearby states. Other opportunities have come up like helping a friend build a house. I get to fly quite a bit in other people's airplanes because I am generally always available. I get to do some interesting volunteer work on my schedule. Other opportunities have come up like trapping nuisance gators or ferrying a yacht over to the Bahamas. The list goes on and on. I found that I have to keep a detailed social calendar. Bottom line, not bored.

* I'll lose contact with people and feel alone: I worked with a large number of great people and I do miss them. I do find that I get to spend much more time with my close friends (turns out, after 32 years at megacorp, virtually all of my friends are from work) since my schedule can is much more flexible and I can accommodate their time off. As a result, I spend more time my close friends from work.

* The market will tank, along with the economy, and I won't be able to find work if needed: Part of our plan is the ability to cut back during bad times. Our base expenses are reasonably low, so we should be able to weather any reasonable calamity. With low expenses, even a job with Walmart or Home Depot would help. I have been fortunate as there is a fair amount of contract work available. I do a little just to keep up with the industry, however, the little I do won't be enough soon.

I was apprehensive about leaving for many of the same reasons you stated, but after leaving, there is no way I would ever go back. Life is so much better on this side!

 

[Ready]

Since the OP did not tell us specifically what his annual expenses are, it's hard to give financial advice here. But clearly the assets you have saved are quite substantial.

I went through a similar struggle about six weeks ago when I left my job, which also paid about the same amount per year, and worried about being bored, running out of money, etc. However, the job was also sucking the life out of me, and I couldn't take it any more. After six weeks, I'm very comfortable with my decision, and would do it again if the situation repeated itself.

I did find that I was able to secure a part time position, working entirely from home at my own pace, that makes enough money for me to still cover all my expenses, but without any of the stress of working at the prior company. You may find an opportunity like this as well, if you look for it. I wasn't planning on it, it just sort of happened, but I'm glad it did. It provides a nice segway from full time work to being totally retired.

Congratulations on your achievements so far! Whatever you decide, I think you're in great shape!

 

[martyp]

Be prepared that no matter how much planning you do you will discover things about yourself and your situation that you could never have anticipated. It could be good or it could be bad. You just have to go with the flow. Plan to be flexible about what ever comes along whether it is a financial change, relationship change, or a personal self awareness change. Retirement is a new phase in life. Of course there will be new things to discover. If you have been a self starter in your w*rk life then you should be OK in your ER life.

 

[daylatedollarshort]

600K is a great income, so I think it is normal to be apprehensive about giving that up.

As others have suggested, try making a new budget living off your investment income and test it out while you are still working. You'll have the added benefit of banking the money you are saving during the test period.

We like watching House Hunters and House Hunters International for inspiration. Without a job to commute to, your options are pretty open on where you can move or at least visit for long vacations.

You have enough savings to be able to live on a tropical island or some vacation destination city in Europe and never have to work again.

 

[pb4uski]

Can you live on $150k a year? (3.5% WR on $4.2m) Are you willing to?

While I know to many that is a ridiculous question, if you're making ~$600k and spending a lot of it then it is relevant. Many people at that level wouldn't be willing to live on $150k a year and give up whatever they spend the extra on.

Also, once you retire you're no longer a player. If you're willing to give it up then fine, but many people find it hard to do.

 

[lhamo]

How attached are you to your 1.2m house? It would bump up the nest egg considerably if you downsized/moved somewhere cheaper. It would probably also reduce a big chunk of your other expenses (property taxes, utilities, maintenance).

Since you've just started a new position and still have doubts, I'd say pick yourself a target FIRE number somewhere in the 5-6 million range and aim to get your basic expenses down to under 150,000. That would be a 3%SWR of 5 million, 2.5% of 6 million. If you are willing to downsize considerably -- say selling your 1.2m house and moving to something in the 400k range, you really are already FIRED and can quit (or put the house on the market and quit when it sells) anytime. If you are not willing to sell, I'd keep working a little longer. But realize that your BS bucket is almost full and it is OK TO DROP IT AND WALK AWAY! Sorry to shout, but seriously -- with 4.2m in your stash it would take a pretty big disaster to wipe you out. If you want to try this new job for a bit and see how it goes, fine. If not, fine too.

You have freedom at your doorstep. It is your choice when to start the journey.

 

[48Fire]

I suggest some counseling from someone, or a swift kick in the butt from DW - it worked for me . You have way more than enough money to be happy. But if you enter it with all of these fears, seems like you will always have them hanging over you. Good luck!

BTW, I am a recovering worrier as well. Just pulled the trigger 4 days ago, and each day I feel better.

 

[jollystomper]

To the OP - in my view there is nothing wrong to have fear. The key is what that fear motivates one to do. There is a lot of good advice in this thread, and at this website. In fact, your posting here is a good sign - rather than let the fear overwhelm you, you are seeking the advice of others who have walked that path.

You mention you grew up in tough circumstances. I did as well. You probably had lots of fears growing up. Some of my included not being sure I would live to 18 due to the violence in my neighborhood, or flunking out of the good college I got into, or not getting a job when I graduated, of performing poorly on the job, etc. However, to achieve what you have done, you likely used your fears to motivate yourself. That says something positive, because for a lot of people that is not the case.

If you listen to the media and folks in general, there is a lot of "fear" being injected regarding retirement. Is it implied that you will never have enough money, you need to keep working, retirement is not what is it cracked up to be, luck is the only reason people have been able to successfully retire, etc. In addition, there is the prevalent attitude of "all these bad things are going on, and there is nothing you can do about it, so why even try?"

However, factors such as you having a good family that is supportive of you retiring, achieving a good career, managing to save and invest very well, all speaks to the fact that you have faced fears and have successfully managed to address them. That bodes well for your retirement. As others have stated, the future hold no guarantees (beyond taxes and death); however, the odds are certainly very much in your favor, and with a plan and willingness to adjust if needed you likely will not to be impacted by the fears you state.

So I encourage you to look at the advice in this thread, indeed this entire forum, and take it to heart. A little over a year ago I had similar fears and found this website (along with similar ones like the bogleheads forum) and the information has gone a long way to addressing my fears. Perhaps not 100%, but now I feel a lot stronger in being able to control these fears, rather than letting the fear control me. My "confidence/fear ratio" has gone from 25/75 to 90/10 , and continues to improve.

I wish you the best!

 

[Accumulating Wealth]

Look at this way, you are worth over 6 million dollars. If the market crashed and your entire portfolio declined 80%(highly unlikely) you would still be a millionaire.

 

[obgyn65]

To answer the OP's question. Like you I am afraid of FIREing and this is why I have been stuck in the OMY syndrome. Unlike you, I have no family commitment, but lots of pressure at work. You have more than I do, but more costs also. I guess I will know when the time is right. All the best.

 

[daylatedollarshort]

Coping, if you have not read it yet, you might find the book Your Money or Your Life helpful. The whole focus is on saving enough money and lowering your expenses to reach the cross over point where you can live off your investment income and not have to work any longer. It doesn't have the best investment advice, but the concept of not trading in your life for more money when you have enough might be helpful.

The Millionaire Next Door might also be helpful. The focus there is people who are in careers they love so it doesn't seem like work. With your skill set, can you do consulting work as needed? DH worked with someone who retired early from a job like yours, moved to a low cost of living place in Florida, then worked as a paid management consultant, commuting to projects during the week when he had a contract. He was making more per hour than the managers responsible for the project, but without all the stress.

 

[DanteAlighieri]

How about this plan?

Hi Coping

Sounds like you are burned out - why not try a leave of absence or "downshifting" to less time or responsibility? That gives you a trial run at ER and might ease the transition for you and your wife. And your megacorp might be surprisingly willing to accommodate you (or not - but happily you are completely in control here, not the corporation.)

DA

 

[coping]

Wow - I am blown away by all the great advice and encouragement. Thank you all so much.

It really is a daunting change, but one that seems so "right." DanteAlighieri suggests that I might be burned out. I think I am. You have a good point about downshifting. My wife has been telling me that if I can't get my head around retiring, then I should think of this as a mid-life sabbatical for a year. That way, in my mind, I'm just stepping back for a bit to see how it all goes. I could always go back to work if I wanted or needed to.

Many of you call out expenses and living on less. My wife and I are both SO ready for that! We both feel that we live in some sort of "bubble" surrounded by people that always want more, more, more. It's easy to get caught up in all that when everyone at work is that way, which is my situation. We both have talked a lot about how getting away from all this would be so refreshing. We've run several budgets. It seems quite doable to live on $150K -- and yes, I realize that for many, many people it's silly to think otherwise. But, with such a large income it's still scary.

The suggestion that I stick with the new role for a while is hard for me to think about. Even though the fear has kept me from acting, I really to feel that I'm at the end of the line right now. W*rk has become something that I dread. It feels wrong -- after all, it's not like I'm working in a coal mine or something, but I go each day just thinking about the end of the day.

I really appreciate all the advice. It's very helpful just to hear from other folks. It makes it all seem a little better and easier. I'll keep you all posted on my journey. Maybe in a few months, you'll see an "I did it!" post from me.

 

[daylatedollarshort]

Many of you call out expenses and living on less. My wife and I are both SO ready for that! We both feel that we live in some sort of "bubble" surrounded by people that always want more, more, more. It's easy to get caught up in all that when everyone at work is that way, which is my situation. We both have talked a lot about how getting away from all this would be so refreshing. We've run several budgets. It seems quite doable to live on $150K -- and yes, I realize that for many, many people it's silly to think otherwise. But, with such a large income it's still scary.

There is a good blog post on the subject of expensive homes and having to keep up with the Joneses on Thomas Stanley's blog.

"If you live in a pricey home and neighborhood, you will act and buy like your neighbors . . .act and be like those around (you). . . . the more affluent the neighborhood, the more its residents spend . . . . From cars to haircuts, and from wine to watches, those who live in 'prestige estates' spend more."


With your assets, you might be happier living in an area where you are the Joneses and don't feel the need to keep pace with your neighbors and co-workers.

 

[Unpaintedhuffhines]

Coping, I'm in a pretty similar situation - high income, but burned out. I don't have 4.2M, but my expenses are a lot lower. I'm 52, and the thought of retiring is completely pulling the ripcord is daunting. So, my plan is to take a one year career break, with two primary objectives: 1. Get in the best shape of my life, and 2. Figure out what I want to do with the rest of my life. I'll approach my company about a sabbatical, but like most big companies, they don't have one. I know when (or if) I go back to work, it's highly unlikely that I'll pull in $400K-$500K/year, but I won't need to. Plus, if I leave my company in good shape, I'll be welcomed back if I want and if they have an executive role for me.

Good luck with your decisions.

 

[urn2bfree]

It seems quite doable to live on $150K -- and yes, I realize that for many, many people it's silly to think otherwise. But, with such a large income it's still scary.

don't forget to budget from that $150,000 a flexible amount for taxes which should be lower, and for health care, which is unfortunately very hard to predict.

 

[MichaelB]

When I quit my job I wasn't thinking retirement, just badly needed time off. More than a year later two things had happened. I was really enjoying my new lifestyle and I began to think in terms of retirement and not sabbatical. It took even more time to gain the confidence that we had enough money and our savings would support us despite my investing shortcomings. That was 13 years ago.

If you are close to having "enough money to retire", you definitely have enough to take a year or two off. Be warned, though, not working and enjoying life one day at a time is habit forming and you find yourselves with a terminal case of FIRE.

 

[BigNick]

I would take a look at your expenses and work out how much of that is being spent compensating for the fact that you don't have time.

For example, a lot of people in high-pressure, high-status jobs don't get to spend much time on vacation, but when they do, it's high-end stuff all the way. It's very easy to burn through a ton of money like that. Having more frugal vacations is a necessity of retirement, but also makes for far more meaningful experiences. (Many of our best family vacations were home exchanges. Imagine a 3-week trip to Europe with hotel bill=$0, car hire=$0, and when you tire of restaurants, you have a full kitchen to cook something nice, or just have some salt and pepper to put on a sandwich. And you learn way more about a country from one trip to the supermarket than you do from sitting by yet another cookie-cutter pool in some tropical resort.)

You might also find that a sort of inverse-keeping-up-with-the-Joneses sets in, even without moving. Sure, they've got all this cool stuff and a new Benz every year. But do they really get satisfaction from all that, driving to the office every day at age 52 (hmmm, Doc says it's almost certainly nothing but he still recommends a colonoscopy), 55 (Did you hear about Jerry in Finance? Dropped dead of a heart attack in a meeting. He was barely 10 pounds overweight, too), 58 (this knee is really not getting any better by itself, and they want me to tour five regional offices next month)? Imagine their faces when they drive home, exhausted, and you're sitting on the front porch with your second cocktail of the evening...