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Running against a timeclock
Old 11-16-2018, 10:43 AM   #1
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Running against a timeclock

Long time lurker .... first time writer ever here or elsewhere. Have to decide whether to early retire with 60 weeks pay and benefits in the next 36 hours. Job is very stressful and little satisfaction for past few years. Know I've worked hard and am very fortunate and blessed to have saved early and regularly. Think I am set but insanely nervous nonetheless. Married 58 year old and been with megacorp for 25+ years. Have about $3.5M in deferred comp (a third of which gets paid at termination), $2.6M in 401k/IRA, and $750K in brokerage account. Expenses (yes, I know too high) run about $270K annually (includes $350k remaining mortgage and health costs but not taxes). Another $700 K coming over next two years from restricted stock. Have a freshman in high school who will go to college but $220K in a 529. Deferred pension of $29K a year starting in 2025. Will wait for Social Security until full age or 70. Firecalc and Fidelity planner lead me to believe okay but still worried about downturn in market, health costs, kid in high school and his college down the road. How does one ever feel comfortable jumping out? What am I missing?
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Old 11-16-2018, 11:03 AM   #2
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wow, You are getting over a years with pay, plus you have over 7 million saved? Great job saving over the years. Plus your pension and SS in the future.
Firecalc and fidelity say you are ok. You could really drum down on your budget if you are concerned. From my perspective, you look more than good to go.
Welcome! This is a great place to be. Many knowledgeable people here.
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Old 11-16-2018, 11:07 AM   #3
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What am I missing?
The joy of taking control of the rest of your life. Don't miss out.
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Old 11-16-2018, 11:08 AM   #4
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If it were me, I would retire and make it work. I focus on your comments about little satisfaction and stress. Life is too short. Plus 60 weeks of pay and bennies allows for a lot of good thinking time where you do not need to touch assets (I assume).

A few things I would wonder about your cash flow. Is your deferred comp secure? if this is a non-qualified deferred comp plan then you are a general creditor of your company. Not a big problem if they are solvent, but they are doing layoffs, so I would wonder. You are going to owe some very large taxes on that too, so have to take that into account in your analysis.

I also would not be banking the restricted stock given you have market risk and can't sell. Having said that, you could probably sell short against your restrictions lapsing, if everything is certain. That would depend on the investment case for the stock.

And the pension, is this the same company?

Any debts?

it sounds like your biggest challenge is jumping and pulling that ripcord. You will not be able to make this mental adjustment in 36 hours. So this would be in some ways a leap of faith.

But you have a year + to build a second (less stressful) career if you wish to. Seems pretty attractive.

Is there a spouse or SO in the picture? And what are his or her views?

Congrats on your first post. it is good to have options, whatever you decide.
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Old 11-16-2018, 11:08 AM   #5
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Welcome to the Early Retirement Forum, and congratulations on being this close to retirement.

Have you seen this thread? It may help you in deciding whether or not you are financially prepared to retire.

Some Important Questions to Answer Before Asking - Can I Retire?
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Old 11-16-2018, 11:13 AM   #6
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If you give me half your stash, I'll retire for you.

Just kidding! If you've been lurking, you know many of us had same angst. Trust me, it passes. It's probably time to live the life that you've saved for. My counsel is to pull the plug while you are both young enough (and I assume healthy) to enjoy retirement.

Retirement should be ideally be three phases:
1. Go-go
2. Go-slow
3. No-go

Don't skip the first, or God forbid, 1 and 2. It happens.
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Old 11-16-2018, 11:14 AM   #7
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How does one ever feel comfortable jumping out? What am I missing?
Everyone has some reservations or nerves when they actually commit to retiring, though some more than others. It's a decision only you can make.

I'm sure you know that FIRECALC includes history that includes two World Wars, several other wars, the Great Depression, the "Great Recession," geopolitical events around the world (to the extent they've affected US factors) and every recession/market correction since 1871. It's not a guarantee that the next 30 years or so couldn't be worse, so if you're convinced the future will be worse than the past, you have to add a safety factor that allows you to sleep at night - with an even more conservative withdrawal rate (less spending) than FIRECALC suggests. But it's one of the best references any of us have.

Good luck, it's a big step we all face one day.
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Old 11-16-2018, 11:17 AM   #8
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What happens to the other 2/3 of deferred comp?

You spend 270k a year after taxes but you only owe 350k on your home?

7 million is awesome but a 3% WR is 210k before taxes a year. You have a great savings but the spending is quite high.

Can you live on less if needed?
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Old 11-16-2018, 11:25 AM   #9
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I would do it. You have 60 weeks to ponder once you pull the pin. Lock in those bennies and decide whether you can manage on a reduced spend.
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Old 11-16-2018, 11:49 AM   #10
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That's $270K without taxes. With 90% of net worth in tax deferred vehicles, so that $7M looks more like 5-5.5M after tax. Or expenses are more like $325-350K if you prefer doing it that way. Now we're talking about a 5% WR. Pension and SS will help some, but we're still looking at 4% once those kick in.

It certainly could work if you don't hit some bad returns early, but you've got to ask, are you willing to make some cuts later if you have to?
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Old 11-16-2018, 12:05 PM   #11
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I'll join the chorus saying "go for it". As pointed out above, you have a year of pay with no w*rk to sort out the details. You can find the ways to save $$ if you feel like that's needed (or at least have a plan to do it), try out hobbies, volunteering, etc., and just spend time with your family. Keep us posted!
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Old 11-16-2018, 12:12 PM   #12
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If you cut expenses a little, you're over the top, even for most posters here. Therefore, not looking at your financial situation alone, here are a few quotes to ponder that I've gleaned from the site over the past couple of years:
"You can always spend less money, but you can't make more time."
"Time > money"
"You'll never be younger than you are today...and possibly not as healthy, either."
"I'd rather be 80 and broke thinking I should have worked longer, than 60, with a boat load of money, dying, thinking why didn't I just enjoy the moment."
"If you're FI, and on the fence with a job you really don't like, think about the things you want to do."

My advice is, pull the plug and FIRE! I have a really hard time believing you'll regret it given your situation.
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Old 11-16-2018, 12:22 PM   #13
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Welcome aboard to this wonderful forum.
It sounds like you are in good shape.
Have you kept any expense breakdown on the 270k? This analysis can help greatly if you need or want to cut down.
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Old 11-16-2018, 01:11 PM   #14
Confused about dryer sheets
 
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You all are the best. Thanks. I can schedule/reschedule the 2/3 remainder of the deferred comp down the road so have some limited control as to timing. RunningBum hit the areas of my greatest concerns. I can/will cut expenses when we can move from HCOL state down the road once child's education done. Probably will sell home and use the equity to buy downsized home without a mortgage... and reasonable property taxes. Still on edge but you are reassuring me that I'm thinking about the right things..
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Old 11-16-2018, 01:20 PM   #15
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I would do it. In normal times you won't have to cut back at all. If things go bad, sounds like you agree you can cut if you have to.
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Old 11-16-2018, 01:49 PM   #16
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Take the money and RUN.

I did. Six and a half years ago. Regrets? Not one.

You are at a point where you have the resources, the age, and the health to create a second life for yourself.

Go for it!
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Old 11-16-2018, 04:54 PM   #17
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Lots of great advise here. Do it. My picture is nearly like yours. Left work in June. Never been happier. Do some volunteer work in the near term. It'll show you just how lucky you are!
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Old 11-17-2018, 05:51 AM   #18
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I'm just waiting for an offer like that. Given your circumstances, I'd take that deal without hesitation.
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Old 11-17-2018, 06:13 AM   #19
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Firecalc and Fidelity planner lead me to believe okay but still worried about downturn in market, health costs, kid in high school and his college down the road. How does one ever feel comfortable jumping out? What am I missing?
IMHO, you will NEVER feel fully comfortable... you just have to decide at a particular point that you are going to go ahead and are willing to deal with those items with your resources.

There will always be market downturns, and market bouncebacks. If you are waiting for market downturns to never occur, you will never retire. Perhaps you need to look at a AA that lets you sleep at night through the downturns.

Health costs are also an unknown, but comfort yourself with much of that unknown will only be for 7 years until Medicare. You did not mention if any of your severance benefits include healthcare, but with you resources you can cover them.

kids future college is a controllable expense. No one puts a gun to your head and says send the kid to an expensive college and fully pay for it. Now is the time to start encouraging your kid to look for scholarship/aid opportunities, consider 2 years community then 2 years full college/university, etc.

In sum, you cannot predict those things... but you can plan for them, and it seems you have enough resources to cover the most likely scenarios.


Good luck!
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Old 11-17-2018, 08:20 AM   #20
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In sum, you cannot predict those things... but you can plan for them, and it seems you have enough resources to cover the most likely scenarios.
That's what it always comes down to, well said.

The decision re: when to retire is unique for every individual, just comes down to the worst scenario that each individual wants to plan for. While there's great advice here that can be very helpful with the decision, I wouldn't listen to anyone else, here or elsewhere who also draw go/no go conclusions -their experience and expectations may be very different than any given OP. Some are good with 70% probability where others need 200% probability of success to pull the trigger and sleep at night for the next 30 years give or take.

And this is an early retirement forum, with an obvious bias. A FINR (Never Retire) forum would give very different advice.
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