Brother incredulous to early retirement

[accountingsucks]

I've never really shared my ER plans with family until visiting my brother and family over Christmas. My brother mentioned that he would definitely like to retire before 60 but that it would be tough and would require at least $5 million in savings. My brother does well making about 250-300k a year, paid off home (worth about 750K) but him and his wife have fairly expensive taste in cars, food, etc. I think they spent $700 on their baby's new crib - things like that.

Anyways I told him that I was thinking before 50 and explained that if he just had 30X his yearly expenditures saved he should be able to pull it off if one has a balanced portfolio. He laughed and said that no way that would ever work in practice and that eventually the market would have a bad year and it would kill the plan. My brother is a very intelligent guy and it left me puzzled as to why he wouldn't even hear me out about this. He respects my thoughts on finance as I'm actually an accountant and knows I'm fairly well versed in investments. Anyone else share their plans with family and have a similar experience?

 

[Hershey102]

I'd be more inclined to accept financial advice from someone whose handle is 'accountingwiz' than 'accountingsucks' . . .

 

[kyounge1956]

Older brother or younger?

 

[LOL!]

Anyone else share their plans with family and have a similar experience?

All my siblings (younger and older) have either never worked or are retired. So I'm the guy still working.
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But then again, I never had a husband either. Neither did my little brother, but he never had a wife as well.

 

[Aiming_4_55]

Kinda surprising but my older and only brother feels that I could do it and deserve it. He said "make it happen" when we chatted during Thanksgiving. I hinted at age 55 - 59 for retirement.

Whereas my mom laughed at me and said I'm just lazy.

Perhaps the truth is somewhere in the middle, but I've been working fulltime hours since turning 17, thru high school and college.

So as long as the numbers work for you and your family, go for it.

 

[GregLee]

He laughed and said that no way that would ever work in practice and that eventually the market would have a bad year and it would kill the plan.

Well, that's a problem, which (as I understand) FIRECALC is designed to deal with. You take into account the possibility of bad years, and just try to make sure you can weather them. Is it really possible to do that? I think the best you can do is deal with the most likely bad events. Worry about the 100 year floods, but don't bother about the 1000 year ones (because you can't).

 

[Nords]

He laughed and said that no way that would ever work in practice and that eventually the market would have a bad year and it would kill the plan.

"So, it's not even worth finding out if it's worked for other people... and maybe could work for you?"

 

[pb4uski]

You may just need to acknowledge that his concern is legit, but that Firecalc and Financial Engines factor that into their projections in calculating portfolio survivability. Actually, 25x (4% SWR) should do, and 30x would be conservative.

 

[Danmar]

Maybe he is worried you will show him up? Sibling rivalry is a very complicated thing, I tnink?

 

[frayne]

I'd be more inclined to accept financial advice from someone whose handle is 'accountingwiz' than 'accountingsucks' . . .

I gave up a long time ago trying to talk sense into siblings about saving, investing and living within or below one's means. I'm retired (5+ years) and they are still working.

 

[Westernskies]

Are you sure he's really your brother?

 

[kumquat]

I`ve talked ER with all my siblings. Doesn`t mean I [-]confess to[/-] have much, each situation is different. Lets try them:

1) Older sister has been employed by governments all her working life. Her DH also has a gov`t guaranteed DB pensioner. No need to talk here.
2) Younger brother is a farmer (cheapest b"stard you`ll ever meet). Loves what he does (although it`s not very financially rewarding). Will keep it up until health or death gets in the way. Has 25 X expenses now.
3) Next brother, same as above until diagnosed with MS at 50 (same year I er`d). No work now, no spend either, can`t do much.
4) Youngest brother (most like me but doesn`t know it). CFO of a few junior resource companies. Cashed in a lot of options and was probably FI before I was. Just one problem, a DW who know`s what to do with excess income. Lucky for him, the income grows faster than the outgo.

I really don`t think I`d talk about it with any of them except they all either prepared for it (sibs 1-3)or got lucky. YMMV.

 

[Animorph]

He thinks he needs at least $5M, which gives $5M/30 = $167k/year, maybe half his current salary, but thinks 30x spending is way too small? Are you sure he was paying attention?

 

[obgyn65]

Agree.

Sibling rivalry is a very complicated thing, I tnink?

 

[foxfirev5]

I never go too far with these type discussions. Everyone has there own agenda. A coworker of mine could very easily retire, but his wife won't let him. I won't touch that one. Others really haven't saved as much as I thought. So I just do my own thing and don't try to influence anybody. The day I retire will be soon enough.

 

[chinaco]

A high salary does not equate to being financially savvy (or prepared for ER himself).


Only a guess... most people project their situation into general comments. He probably cannot afford his current lifestyle without continuing to work. It would be easy for him to find something to confirm his lot in life (his decisions).... in this case the recent meltdown.

 

[rescueme]

Anyone else share their plans with family....

Never. I live my life - they live theirs...

 

[brewer12345]

I have offhandedly mentioned it to some family members. Dad does not understand the motivation since he was an entrepreneur most of his adult life and finally retired in his late 60s. My sisters can't seem to save more than an e fund, but one has a husband with a decent career and the other will qualify for a pension eventually. My brother pursues an alternative lifestyle and is a seriel entrepreneur, so we would not be on the same page. DW's family knows that we intend to relocate to their area in a few years, but we have never been candid with them that work will be more of an option than an absolute necessity. We have mentioned to DW's mother that there will be a permanent reduction in my earnings capacity so our financioal situation has to be robust, hence the delay of a few years.

Everyone's circumstances and preferences are different, even among family. Let it go.

 

[Sarah in SC]

accountingsux, I think that he just can't see past his own spending situation to imagine how you are living your life. It is the filter he can't remove to see that in your case, you can retire early. Don't sweat it, and don't waste a bunch of time preaching it to him.
As Brewer said, let it go.

 

[Rambler]

I've mentioned it to my parents. They are happy for me. I have mentioned it in passing to my sibs. Two of them do not understand the concept of retirement, let alone ER...brother will work until death or illness force him to stop...not because he likes working, he just can't save a dime. Sis barely holds down a job at all and saves no money. I'm closest to the baby sis, who for 4 or 5 years could not believe it was possible, but now seems to understand I can and will ER. She and her DH are finally asking the real questions, like "how" they might be able to retire some day. But, alas, it seems they are not willing to live below their means (they do live by their means, but not below enough to save much if anything).

This is all really interesting to me to watch. Dad and mom worked hard, scrimped, and saved all their lives. We save a lot, but live a little too. Little sis saves a little. Middle sis and bro earn little, save nothing, and prefer to be in debt (mom and dad never had debt besides the mortgage, which they paid off early). I've just wondered how the apple fell so far from the tree in my sibs' case. Might make an interesting study.

R

 

[MichaelB]

left me puzzled as to why he wouldn't even hear me out about this. He respects my thoughts on finance as I'm actually an accountant and knows I'm fairly well versed in investments.

Those two thoughts seem to contradict each other.

Family and friends will judge you not by your objectives and values but by theirs. You can’t change that. Trying will end in frustration – yours. Your time and energy is better spent working toward and achieving your objectives.

 

[haha]

This is all really interesting to me to watch. Dad and mom worked hard, scrimped, and saved all their lives. We save a lot, but live a little too. Little sis saves a little. Middle sis and bro earn little, save nothing, and prefer to be in debt (mom and dad never had debt besides the mortgage, which they paid off early). I've just wondered how the apple fell so far from the tree in my sibs' case. Might make an interesting study.

R

I think this is par for the course. My brother nearest to me in age, and I, have been very money conscious our entire lives. We also both planned to exit work early if we could. On the other hand, a younger brother and my sister have been feckless spendthrifts and have essentially no savings. What security there was came from pension expectations- in brother's case his own teacher's pension, in sister's case her husband's pension. I am closer to BIL than I am to her, and it is clear that he would gone in a moment but that she would then become an even more expensive liability than she already is.

Another former city worker I know is in the same position. He feels that half of his pension plus his SS would not be enough for him. Also, without a lot of luck in the courts he would lose his paid off house.

Some people are locked to jobs by a big carrot-golden handcuffs. Others are locked to a spouse by a big stick-what they may perceive as economic ruin that a split-up would bring.

 

[NW-Bound]

My two younger brothers never plan to retire early. They say it is not possible to have a stash big enough to generate the same low 6-figure income they get now. So, they do not bother to even try, and just want to enjoy the good life now. Both have non-working wives and young children.

I don't know if they have ever thought of how their retirement, at 65 or whenever, will get funded. I guess they think that it will work out somehow. I believe they both max out their 401k, but am not sure if they have much outside of that.

 

[packrat44]

My brother mentioned that he would definitely like to retire before 60 but that it would be tough and would require at least $5 million in savings. My brother does well making about 250-300k a year, paid off home (worth about 750K) but him and his wife have fairly expensive taste in cars, food, etc.

Anyways I told him that I was thinking before 50 and explained that if he just had 30X his yearly expenditures saved he should be able to pull it off if one has a balanced portfolio.

If his yearly expenditures are (and will remain) $167K, at 30X his yearly expenditures he would need $5M. If his income is $250 -$300K/yr the spread is great enough where he should be able to reach the $5M goal before hitting 60 (unless he is running out of years).

Now if he were to trim his expenditures to a measly $100K/yr, he could retire early.

 

[TromboneAl]

He laughed and said that no way that would ever work in practice

Think of how much fun you'll have sending him pictures of you enjoying retirement.