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Old 04-20-2016, 07:42 PM   #21
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I was in a similar place as you, albeit I did not have the liquid assets you did and was a bit older. But I was a mid Sr exec with a Fortune 100 company. Working the life you would expect...until at 51 they wheeled me out of the Executive conference room during a meeting at 830pm. I cracked severely and my body shut down. That day I decided that what mattered most wasn't the income or the position, it was my family and my health. I retired at 54. We live comfortably on about $100k a year. My pension and the wife's salary (she went to work when the kids hit high school) covers everything we need.

I say transition out as soon as is practical. I sense that you, like me, work to live, not the other way around. Take advantage of the opportunity you have in front of you. You will adapt. You will love the FIRE life.

The exec lifestyle takes it from people. I've seen too many of my mentors go hard until they were 60 or 65, and then never make it alive two years after retiring. Its not worth it.
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Old 04-20-2016, 08:14 PM   #22
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Maybe they died of boredom? Some do me thinks. The hard chargers, make stuff happen, win the battles, command and conquer types?

I dunno. You know the type A & B personalities? I'm sorta like a C-, not even on the charts so I drifted into this pretty easy.
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Old 04-20-2016, 08:18 PM   #23
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Originally Posted by RobbieB View Post
Maybe they died of boredom? Some do me thinks. The hard chargers, make stuff happen, win the battles, command and conquer types?

I dunno. You know the type A & B personalities? I'm sorta like a C-, not even on the charts so I drifted into this pretty easy.
There is some truth in what you say. Many of the guys I see retire, don't have any passion to follow. They sit at home idle and quickly wither away. for me it's golf, tournament bowling, and mild hikes with the Mrs. And since mama works.....dusting, vacuuming, laundry, and grocery shopping.
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Old 05-03-2016, 04:02 PM   #24
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I would work another 4-6 years.

I think you had done great job, but once you have what you have you know it is not really
all that big pile of money especially if you are relatively young.
Man, you've got a point....I've been thinking a lot about the prospect of working full time another 4-6 years. I could add materially to my portfolio by then, but my kids will be in their mid-late teens. Currently, after tax, my income adds ~9% to my NW annually. Deferred comp is helping that a lot.

For the group, here's how I'm slicing my portfolio as I forecast it for early '17 when equity vests:

non-invested (529s) - $200,000 Cash gen: $0
First Home: $635,000 Cash gen: $0
Cash: $350,000 Cash gen: $0
Company Stock: $50,000 Cash gen: (3%) $1500
Deferred Comp: $250,000 Cash gen: (3%) $7500
Retirement accounts $800,000 Cash gen: (2.0%) $16,000
Cash equities $850,000 Cash gen: (2.0%) $17,000
Personal Loan $100,000 Cash gen: (5.5%) $5,500
Real estate equity $760,000 Cash gen: (7.0%) $53,000

Total Net worth $3,995,000

Total Invested portfolio $3,160,000 Cash Generation ~$101,000

Withdrawal rate across the portfolio of about 3.3%, much more conservative on the stock portfolios. I modeled them that way partly in order to account for the fact that I can't withdraw from retirement accounts for another decade and a half, so there's material SOR risk in the taxable account. My dividend and distributions equal roughly that amount in my taxable account annually. I could see myself increasing these marginally as I got more comfortable over time, but don't want to plan on it.

I'd still be carrying about $655K in mortgages on investment real estate across 3 properties. I could pay off portions of that to increase cash gen, but won't do so if it means reducing cash reserves to less than 3 years' living expenses. The real estate at 7% is pretty heavily burdened by my pro-forma holdbacks for maintenance. Actual cash returns on real estate equity over the last few years have been closer to 9% or so.

Given my orientation around risk, I'd probably try to figure out how to put $30-50K on top of this by consulting, or doing something part time. I'd use that to cushion the portfolio, or spend more on vacation travel.
Prospect of traveling for an extended time and renting out the first home is really high, and unaccounted for in here.

The question is whether my quality of life is better working and not having to worry about money, or budgeting a little more aggressively than I have over the last few years and getting a bunch of time back.

Not sure if there's a question in there.....typing it out is therapeutic. .
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Old 05-04-2016, 09:21 AM   #25
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Just as an idea. Maybe inverting the problem will help some.

I have a similar situation to you and am currently taking a bit of time off work to "test run" retirement.

Beyond that, I kind of came up with two approaches to the problem. The problem being "how do you even think about leaving a high paying job you don't necessarily hate, but something inside you tells you to stop and spend more time with kids, family, etc."

It's a surprisingly hard problem and the default decision is to do nothing which means keep going to work and making money. LEAVING requires active decisions that are hard and consequential... so how to even it out?

1) Don't give up something you need for something you don't.
I apply that rule to financial decisions, but have recently found it also works for non-financial decisions. For example, I have 2 young kids. They learn new stuff every day. How much do I value being around that? If it's a lot, then it becomes a "think I need." If I then look at work as a source of income and also some life value, how does that stack up? Well... if money isn't a problem, then it quickly becomes a "thing I don't need." So then the question is... to what extent does going to work (thing I don't need) interfere with kids/family (something I need) and that helps guide my decision. In my case it might mean reducing the amount of time I spend working... and if I can't make that work at my job... well... not the end of the world because I don't need it, right?

2) imagine the situation was the opposite of what it was
By this I mean my current situation is I HAVE a job I am NOT retired. Thus to change the state requires direct action.
So imagine the situation was the opposite. You ARE retired and you are OFFERED your current job. Would you stop being retired and go back to work doing what you do for the amount of time you do it for the compensation you get? If the answer is an immediate "NO" then it makes the decision a bit easier. It's probably not quite as easy as that... but even if it's a "MAYBE" that means if the situation were reversed (you were retired and given that offer) you'd probably stay retired for the same reason you may continue to work now .
So in this situation it's the precedent that is making the decision for you as opposed to the analysis. something about that "feels" wrong somehow.
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Old 05-04-2016, 10:54 AM   #26
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The problem being "how do you even think about leaving a high paying job you don't necessarily hate, but something inside you tells you to stop and spend more time with kids, family, etc."
This is the *very heart* of the problem. Your perspective in this post is really helpful, and gives me a different way to look at it. Thank you.
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Old 05-04-2016, 12:22 PM   #27
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Just be really, really, really sure you have future healthcare expenditures nailed down. Problem is ....you can't. No one can.
You and your wife have 20 years before MEdicare kicks in....if it is still there. Plus your children will need insurance for at least another 10 years.

To give you a little perspective, I spoke with a rep from our state exchange who told me that the info he received is that most carriers next year will have a 10-15% increase in premiums with higher deductibles and OOP maximums. This is because many states with their own healthcare exchange will lose subsidies from the Gov't as was planned under the ACA. The reason many have dropped state exchanges. My wife and I are ten years older than you guys with a NW of $4.5M of which $4.3 is invested at an allocation of 50/50. Our expenses approximate $50,000/year. I am retired ....my wife not yet. I ran the numbers until we both qualify for MEdicare with 15% increases in premiums every year and assuming the worst case scenario that we would max out deductibles every year. For the next 9 years this would cost us $300,000 for medical expenses alone. And that doesn't even include dental. CAn we still afford it? Sure but my wife will probably now work until age 60 ( 5 more years) bringing us closer to MEdicare eligibility....not for the money ... but for the excellent plan she has at work.

With the money you are making, unless you cannot stand your job, I would probably continue working until the youngest child entered college. This only puts you and your wife in your early 50's with still decades ahead to enjoy retirement. Unless consulting work or some other endeavor would provide some steady part time income. I just think future healthcare expenses will be higher than even projected. Anyway good luck to you.
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Old 05-04-2016, 04:04 PM   #28
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Just as an idea. Maybe inverting the problem will help some.
Another way for me to invert the problem is to consider how I'd feel if I were fired (like let go from work, not FIREd ;^)) Would I feel good about that, or bad? I've mused for a few years that I'd be really happy in that event. Maybe that's telling. I was downsized (after earning out after an acquisition) a few years ago, and I remember being stoked, even though I wasn't FI at the time.

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Just be really, really, really sure you have future healthcare expenditures nailed down. Problem is ....you can't. No one can.
Yeah. I've budgeted $20K/year and will have to figure something else out if the cost of healthcare doubles every 5 years. If that's sustainable politically (!), I could see the benefit of moving out of country and returning or traveling to another developed country if major surgery is needed.

I'm pretty sure that 5 years from now it won't be politically feasible to charge a family $40K/year for health insurance. I think that would pretty much end small business ownership in the US unless some other provision was made.
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Old 05-04-2016, 04:08 PM   #29
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It's a great point. Healthcare has always been my biggest wildcard concern. When I started my own business it was also the most stressful thing (more stressful for me cause no ACA back then and so it was really every person for themselves).

That said I also try to look at broad probabilities. Who wins the election, and then next one and the next one has a big impact on ACA (probably). But also on taxes, etc.

Imagine if national tax policy mirrors California and all investment income is treated like normal income? That would hit a lot of retired people hard.

Imagine if some things that are income tested become means tested? That's also a big change.

There's many hidden risks and while I agree healthcare costs is a major one.. you can also go crazy trying to mitigate all of it.

I also weigh the more invisible risks. For example every year I get older there's a greater chance of a fatal heart attack or cancer or what have you. Every day I commute to work there's a risk of a disabilitating car accident.

And of course it's hard to weigh that against the value of time with family. It rips my heart when I read about people who retired and then quickly lost their spouse. Of course retiring and running out of money is pretty horrible too.

I just see it as there's always risk on every side and I guess we all have to navigate our own way through.

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