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Old 06-04-2012, 07:54 AM   #21
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Originally Posted by MooreBonds View Post
Would your 'free time w/ the kids' really be all that different if you worked 30 hrs/week vs 40 hours?
Though it sounds redundant, it would be different to the extent that I could take advantage of those 10 hours. 10 hours could mean 2-3 additional afternoons per week that I could spend with the kids. So yeah, a pretty big difference if you ask me.

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Sure, there are chores that need to be done around the house that you could do in that 10 hrs you wouldn't be working...but there are many households that have dual-income parents who still find time to spend some time w/ the kids and each other.
I guess it all depends on how much time people want to spend with their kids. Maybe most people are OK with seeing their kids briefly in the mornings before school, and then for a few hours in the evening before bed. For me, those scant hours fly by and often more like work (trying to get the kids fed and out the door in time, preparing dinner, bed-time routine) than quality family time. There's more time available on weekends, but a substantial portion of that goes to household chores, yardwork, errands, etc.

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Also, while it is great to spend a good amount of time w/ your kids, they do need a little 'alone time' to be with their friends -during which you could get other things accomplished.
Good point. My kids aren't quite to the age where it's OK to send them out to play unsupervised, but I can imagine in a few years that will be the case. Then again, in a few years they'll also be in school most of the day.

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Is it possible to simply leave your job at the office when you leave at 5pm each day, and only commit to working 40/hrs a week (with the exception of a few hours of OT once in a rare while), and still have a decent enough time to be with the family and get everything done around the house and around town?
That pretty much describes my life now. I only started questioning the lost opportunity cost when I took a closer look at my finances, started fiddling with FIRECalc, and realized that maybe I'm doing the 9-5 thing more out of habit than necessity.
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Old 06-04-2012, 08:00 AM   #22
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But not saving heavily would have hurt more, some things you can control, some you can't. But since you have been consistently putting money in you have bought a lot when prices were cheap, so 2009 and onward should have help make for that.
TJ
Indeed, you're right. I think my annualized ROR over the last 14 years is in the 4-5% range. Not as dire as it could have been given the crashes in 2002/2003 and 2008, but a far cry from the long-term averages we like to imagine are written in stone. I have often told myself that those crashes were just opportunities to buy low while I'm still in the rapid accumulation phase.
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Old 06-04-2012, 08:46 AM   #23
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A main reason I'm interested in gaining some more free time now is that my kids are only this young once -- in just a few short years they'll be in school most of the day. It's hard to put a price on the extra time that I could be spending with them now. It's time that will soon be gone forever, and I'd hate to live with the regret over choosing to work more rather than spend more time with my kids. Cue "And the cat's in the cradle and the silver spoon..." [/QUOTE]

Twelve years ago, when I was trying to decide whether to take an early retirement offer from my employer, it suddenly dawned on me that I had an opportunity most parents only dream of, to have the time to spend with my boys, supporting their activities, without the worries and pressures of a career job. Though I wasn't sure if the financials were solid (this was before I ever heard of Firecalc, just know of the Trinity study and 4% "rule"), I accepted the offer (after several late nights analyzing income & expenses) even though my sons were 18 months and 3 years old. I've never regretted the decision, though it helped that we have always been LBYM.
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Old 06-05-2012, 07:24 AM   #24
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Twelve years ago, when I was trying to decide whether to take an early retirement offer from my employer, it suddenly dawned on me that I had an opportunity most parents only dream of, to have the time to spend with my boys, supporting their activities, without the worries and pressures of a career job. Though I wasn't sure if the financials were solid (this was before I ever heard of Firecalc, just know of the Trinity study and 4% "rule"), I accepted the offer (after several late nights analyzing income & expenses) even though my sons were 18 months and 3 years old. I've never regretted the decision, though it helped that we have always been LBYM.
That's fantastic! You were given a wonderful opportunity and I'm glad it has worked out for you and your family. That's kind of my dream scenario...unfortunately my employer never has and probably will never offer early retirement.
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Old 06-06-2012, 09:53 PM   #25
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Have you run the numbers on if you do option 1 (max out savings) what is the earliest you could FIRE with a 100% success rate? 5 years? 10?
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Old 06-06-2012, 10:50 PM   #26
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Have you run the numbers on if you do option 1 (max out savings) what is the earliest you could FIRE with a 100% success rate? 5 years? 10?
FIRECalc says 13 more years of max savings for a 100% success rate of $50k/year withdrawal over a period of 47 years.
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Old 06-07-2012, 07:13 AM   #27
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FIRECalc says 13 more years of max savings for a 100% success rate of $50k/year withdrawal over a period of 47 years.
In that case, which sounds better: 20 years of 3/4th time work or 13 years of full time?
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Old 06-07-2012, 07:28 AM   #28
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Mostly comes down to your own particular personality comfort level - if you're a pure ant and want things more 'certain', or lean more towards the happy-go-lucky grasshopper attitude of being able to pull something out of thin air to make things (hopefully) work out if something goes wrong.
OK, OK, now I am Happy-go-Lucky.
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Old 06-07-2012, 01:47 PM   #29
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In that case, which sounds better: 20 years of 3/4th time work or 13 years of full time?
Hmmm...can I have a look behind door #3?
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Old 06-07-2012, 02:31 PM   #30
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I've struggled with this. Up until recently I figured that ER for me meant not having to work, and perhaps only working part time (grudgingly) to keep from drawing down my nest-egg principal too early. But after a bit more contemplation, I think I'd actually prefer to work at least part time indefinitely. My reasons for this:

- I like my job/employer.

- My employer offers some great benefits, including eligibility to remain in its health care plan (for life) after a certain # of years of service + age, and tuition assistance for my kids' college expenses.

- I'm still not sure what I'd do with 100% leisure time if I stopped working; a balance of, say, 50% spent on a well-paying job I enjoy, and 50% pursuing other interests sounds reasonable to me at the moment. I realize this could change if I develop some new hobbies/passions outside of work.

- I'm concerned that if I back out at the first moment it seems financially feasible, I'll constantly be stressed out about my financial security and whether my portfolio will hold up. Maybe I'm wrong.

A main reason I'm interested in gaining some more free time now is that my kids are only this young once -- in just a few short years they'll be in school most of the day. It's hard to put a price on the extra time that I could be spending with them now. It's time that will soon be gone forever, and I'd hate to live with the regret over choosing to work more rather than spend more time with my kids. Cue "And the cat's in the cradle and the silver spoon..."
Bird, my only advise based on my retirement, is if you plunge ahead, make sure you got that mind of yours under control. A lot of free time can cause the imagination to run wild if you think you will worry about incurring potential portfolio problems. If you think you may stress out a bit over a downturn, you could take a 10% drop in the market and extrapolate that into being homeless and without food in about 30 minutes!
I retired at 45 and at first was just going to live out my merry ways on my pension, but you wouldn't believe all the crazy thoughts of financial ruin could lurk inside my mind once I had the free time to think about it. So I decided to play the middle and work about 15 hours a week, and will get to sock away every penny of this plus some of my monthly income. This puts my doomsday mind at rest, and I do enjoy the work. It does not interfere with the things I like to do.
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Old 06-07-2012, 06:57 PM   #31
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Bird, my only advise based on my retirement, is if you plunge ahead, make sure you got that mind of yours under control. A lot of free time can cause the imagination to run wild if you think you will worry about incurring potential portfolio problems. If you think you may stress out a bit over a downturn, you could take a 10% drop in the market and extrapolate that into being homeless and without food in about 30 minutes!
I retired at 45 and at first was just going to live out my merry ways on my pension, but you wouldn't believe all the crazy thoughts of financial ruin could lurk inside my mind once I had the free time to think about it. So I decided to play the middle and work about 15 hours a week, and will get to sock away every penny of this plus some of my monthly income. This puts my doomsday mind at rest, and I do enjoy the work. It does not interfere with the things I like to do.
Thanks! I can add that to my list of reasons why I don't mind working (part-time) in my ER.
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Revisiting ater 5 years
Old 05-10-2017, 12:30 PM   #32
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Revisiting ater 5 years

I thought I'd take another look at these options after spending the last 5 years continuing to max out retirement savings. The table shows FIRECalc annual withdrawal amounts at 100% vs 95% success for a couple different savings rates.

 --FIRECalc 100%----FIRECalc 95%--
--Max until 55--$98k$108k
--PT until 55$78k$86k
--Hybrid$83k$93k

Max until 55: keep maxing out 401k/IRA until age 55 (~14 years), then stop working and withdraw until age 90.

PT until 55: starting immediately, work part-time at 50-80% (as expenses allow) until age 55, only contribute minimally to 401k to receive company match, no IRA contributions, then stop working and withdraw until age 90.

Hybrid: continue maxing 401k/IRA for 3-4 years until mortgage is gone, then switch to 50-80% until age 55, minimal 401k and no IRA, then stop working and withdraw until age 90.

I included the 'Hybrid' option because I can't afford to go part time while the mortgage is still around (ok, in theory it's possible -- I'd have to recast). Our conservative estimate for annual 55+ spending is $55k, NOT including tax or healthcare. The Hybrid option shows $83k at 100% success, so I'm cautiously optimistic that ESR in 4 years is still feasible.
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Old 05-10-2017, 12:58 PM   #33
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I retired about a year ago at age 46 with two teenagers and a young adult living at home. The reduction in my stress level combined with just general availability - I drive them everywhere - has resulted in my kids and I having real conversations that I strongly doubt we would have had otherwise. I highly recommend FIRE or reduced hours for that reason alone. You'll end up with slightly less money but a good relationship with your kids is priceless.
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Old 05-10-2017, 01:28 PM   #34
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Thanks for chiming in, SecondCor521.

Full FIRE isn't on the table for me anytime soon, but I think I can reap similar benefits -- less stress, more schedule flexibility, and more quality time with my kids -- with a part-time schedule. Sometimes I regret that I won't be able to do so until I'm ~45, but then again I'm talking about options that the vast majority of people could never hope to have, so it's hard to get too worked up about it.
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Earlier mortgage payoff vs earlier part time work
Old 05-22-2017, 12:36 PM   #35
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Earlier mortgage payoff vs earlier part time work

Because ESR appeals to me -- and because FIRECalc shows we've saved enough to withdraw more than enough $$ in retirement -- I've been thinking about what it would take to start working part time a bit sooner.

We currently spend every penny we earn. But this includes maxing out 401k's, funding IRA's, and paying ~$14,000/year extra on our mortgage -- and those are areas we could easily dial back on spending in order to afford working a bit less. I was curious what others might do in my situation. Some scenarios:

A) Stop paying extra on mortgage. I could then afford to work ~80% time (e.g, Fridays off), and our mortgage would be paid off in 6 years instead of 3 years. I could probably transition to 50-60% time in 6 years right up through FIRE in 8-14 years.

B) Stop paying extra on mortgage + refinance or recast mortgage + stop my Roth IRA contributions. I could afford to work 60% time -- two days off per week -- and we'd then have a fairly small (<$100k) mortgage balance that would be paid off in 2030 (recast) or later (refinance).

C) Other.

What would you do?
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Old 05-24-2017, 09:40 AM   #36
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We have a couple deductions that phase out at our income level, and cutting back to an 80% work schedule lets us fully qualify for these. This results in a ~40% marginal tax rate if we include FICA. There are some fun ways of looking at an 80% schedule in this light:
  • It's taking every Friday off, but still getting paid for 2 out of every 5 of those Fridays
  • It's getting 20 additional Fridays off -- four free weeks of vacation -- per year
  • It's buying 10+ additional weeks of vacation per year at a 40% discount.
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Old 05-24-2017, 11:26 PM   #37
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I think it's such a personal, individual choice.

Are you the kind of fireball who wants to pay off that house and keep working 100% and saving every penny for a super fabulous retirement?

Or are you the more laid back type who is perfectly happy working part time for years longer, and taking life as it comes?

I can see the appeal of both. Personally I tend to be kind of the fireball type so if I had been in your situation, I probably would have chosen to pay off the house and keep working 100% so that I could retire ASAP. But really, it is up to you.
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Old 05-28-2017, 09:55 AM   #38
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Are you the kind of fireball who wants to pay off that house and keep working 100% and saving every penny for a super fabulous retirement?

Or are you the more laid back type who is perfectly happy working part time for years longer, and taking life as it comes?
I suppose the crux of the issue is that I've been the former for most of my life -- intense focus on retirement savings starting with my first job after college, plan to pay off 20 year mortgage in 10 yrs, etc. But now with the end in sight, it's tempting to take the foot off the gas and coast into an ESR rather than to keep sacrificing time/lifestyle until we're past the finish line.

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I can see the appeal of both. Personally I tend to be kind of the fireball type so if I had been in your situation, I probably would have chosen to pay off the house and keep working 100% so that I could retire ASAP. But really, it is up to you.
I'd probably soldier on with the fast mortgage payoff if I thought it would enable FIRE in the next 5 years. But we'll still be paying for private school tuition for another ~10 years, and funding that + health insurance with a SWR from our nestegg really isn't feasible. It's hard to reconcile that with my instinct to gun it to the finish line.
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