What if your career pays too well?

[Senator]

I am in IT, not as much money as an attorney, but we do OK.

When you are younger, you have more time than money. When you get older, you have more money than time.

I do not have kids. No one to leave anything to except my older sister that is in worse shape than me. I am in decent shape.

So, at some point the pile of money is big enough. Just six months ago I wasn't sure either. The more I evaluate things, the more I can't wait to FIRE.

When you are ready to lock in your lifestyle, jump off the rat race wheel.

 

[stepford]

Interesting that several posters mention 20:1 as the NW/income ratio where OMY becomes unjustifiable. I'm right at that point beginning my (last) OMY.

Just like a missing object always ends up being in the last place you look, the last year of your career (and the one when you're usually most ready to leave) is usually the most lucrative. So it's tough to just leave that money on the table, but there may be a compromise available if you can work part time.

Aside from the benefits of freeing up time to more smoothly transition to retirement and reducing stress to allow you to tolerate those last few years at work, many times you may find that part time provides a more favorable work/compensation ratio than full. In my final OMY I'm working about 65% time but collecting about 90% of total FT compensation. Tired though I am of work it's hard to pass up that opportunity.

 

[Rick_Head]

Interesting that several posters mention 20:1 as the NW/income ratio where OMY becomes unjustifiable. I'm right at that point beginning my (last) OMY.

Just like a missing object always ends up being in the last place you look, the last year of your career (and the one when you're usually most ready to leave) is usually the most lucrative. So it's tough to just leave that money on the table, but there may be a compromise available if you can work part time.

Aside from the benefits of freeing up time to more smoothly transition to retirement and reducing stress to allow you to tolerate those last few years at work, many times you may find that part time provides a more favorable work/compensation ratio than full. In my final OMY I'm working about 65% time but collecting about 90% of total FT compensation. Tired though I am of work it's hard to pass up that opportunity.

Or, think of the alternative where your mega/mini/micro corp isn't there for you if and when something bad happens?

 

[bingybear]

"Interesting that several posters mention 20:1 as the NW/income ratio where OMY becomes unjustifiable. I'm right at that point beginning my (last) OMY. " (sorry... the quote option is timing out...)

In general this is a meaning less metric. There has to be some assumptions built in here. Maybe someone could elaborate on the assumptions to help me understand.

It is likely much more important to have NW/annual spending in retirement.

You could have people who are living on everything they make, then inherit their 20:1 and have to pay for health care that was previously covered by their employer. On the other had you could have someone living on 20% of the income and will have health insurance covered in retirement.

There seems to be this assumption that income always goes up over the years. Events like the tech bubble and housing bubble changed income levels greatly for many. DW has not exceeded her income level from pre-tech bubble (partially due to our geographic needs for taking care of a aging parent).

Many my be like us where we had company sponsored health insurance and will need to fund our own health insurance in ER... which starts in 2 months (@53!)

Further reality would likely require the ratio include not only NW:expenses, but also expected number of years to support. I do realize that one can complicate this beyond comprehension.

 

[pb4uski]

The OP's dilemma was also a slight sticking point for me especially since there was no going back (or at least it would be very difficult to go back) and I actually enjoyed my job, colleagues and clients.

In the end, I decided that I had enough and working longer was only enriching our heirs (not that that was horrible) and I decided that I would prefer to have the freedom to do what I wanted when I wanted than to continue being constrained by work and being on-call 24/7/365.

 

[Car-Guy]

I am 45 and plan to retire at age 54.

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

Been there, done that. I was about ten years older than you when I was faced with the challenge. I stayed a few more years (OMY syndrome) after I was well passed FI, just to rake in a lot more cash. Looking back, I'm not really sorry I did that but I''ll never get those years back. As far as dealing with others headaches, isn't that what work is for the most part, no matter if it's an individuals headaches or companies headaches.

 

[kcowan]

I think OP is anticipating a great problem to have, but with 9 years to go, there is no basis to decide now. Just make sure to LBYM so that OMY does not become too desirable.

20:1! Forget it, DW and I were making too much. And it took her longer to adapt. But the portfolio has performed well in the intervening 12 years.

 

[tuixiu]

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here?

We're with you... I'm software engineer, wife is an attorney. Causes much mental anguish leaving behind two six figure salaries and a monthly savings rate over 10k to start living on a retirement budget. Additionally I feel this is the golden age of software dev jobs, could probably easily find a well paying job in any medium to large city in the country right now and take my career wherever I want it to go.

That said, have given notice and only four weeks left of work.

Fishing license renewed for 2015? Check.
Kindle stocked? 200+ books check.
Mountain trails in surrounding area listed and mapped? Check.
Steam Holiday Sale cheapo video game gorging? Check.
Dates finalized for five week trip to Peru? Check.

Onward and upward, good luck!

 

[Whisper66]

There is always more money to be made.....

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

If you love the job, stick with it. If not, consider how much money you really need to retire and cut the cord then. I was in a good paying job that I really enjoyed. Made a lot more than we needed so saved quite a bit. And there's always more money to be made and saved for other wants / needs. The job changed a bit such that I didn't enjoy it as much anymore. Could have stuck with it so it wasn't that bad....just didn't feel the strong want to stay there anymore. In the mean time, you get to thinking of all the other things you could be doing if not tied up with work all the time. It's hard to keep saying honestly you'll do these things later as you age and realize there is an end somewhere down the road. Pretty soon it starts to gnaw on you and cutting the cord becomes quite easy. Good luck with your decision!

 

[gauss]

When I read the first 20:1 post, I interpreted it as NW/(increase in NW due to OMY savings). This is different than NW:income as some have also commented about (unless you are somehow in the envious position of being able to save 100% of your earned income. )

Obviously the golden measurement for retirement planning is based on spending - current and anticipated.

That being said, for someone who has not done a detailed spending analysis, perhaps the above ratio might have the potential to be an initial screen or rough estimate given that at least of a few of us have experienced it. More analysis would need to be done to determine under which conditions that it would be useful. Perhaps someone can start a new thread if there is interest in discussing this measure.

-gauss

 

[2B]

When I read the first 20:1 post, I interpreted it as NW/(increase in NW due to OMY savings). This is different than NW:income as some have also commented about (unless you are somehow in the envious position of being able to save 100% of your earned income. )

If I followed your explanation correctly, I passed 20:1 a long time ago.

 

[FinanceGeek]

When I read the first 20:1 post, I interpreted it as NW/(increase in NW due to OMY savings). This is different than NW:income as some have also commented about (unless you are somehow in the envious position of being able to save 100% of your earned income. )

Obviously the golden measurement for retirement planning is based on spending - current and anticipated.

That being said, for someone who has not done a detailed spending analysis, perhaps the above ratio might have the potential to be an initial screen or rough estimate given that at least of a few of us have experienced it. More analysis would need to be done to determine under which conditions that it would be useful. Perhaps someone can start a new thread if there is interest in discussing this measure.

-gauss

The 20:1 I proposed was the ratio of one's NW to the amount by which the added capital saved during OMY of working would increase NW. There is an implied assumption that the OMY is "optional" in terms of meeting your retirement budget (e.g. SWR), and you are contemplating it to build in margin to your financial plan.

Thanks for jumping in to clarify, I might start a new thread to discuss further!

 

[Turn_the_Page]

Can you do what you really want to and keep working?

Are you living where you really want to live while you're still working?

Will you be able to do all the things you put off to retirement? Or will poor health/aging prevent it?

These are the issues for me. I likely don't make the $$ that you do, but I do quite well. I can't live where I want and work in this career. I have things that I want to do, but I just can't get around to it while I'm working. I want to travel, but I'm scared I'll be too crotchety or whatever, if I wait too long.

 

[MRG]

I am 45 and plan to retire at age 54. I have a dedicated amount per month going to my Roth 401(k), and a dedicated amount per month going to my non tax deferred bridge account (to carry me from 54 - 59.5), and my house is scheduled to be paid off at age 54, so everything is shaping up according to plan.

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

A mentor of mine used to say money wasn't a motivation. He was a SR. VP. so it was easy to think he was wrong. He had money, I later learned he was LBYM.

Then years later FI hit, combination of many things going well. My point is(as many have said) there is a tipping point where you realize that more money isn't more happiness. I think it's different for each of us.

My bs bucket got full due to many things. Most of the C level execs left, VPs, directors many of them my mentors. Then a whole mentality change due to changes at the top. I can still tell you the exact event that triggered my choice bit there's no value in it.

In the end it was the answering the question: "What are my priorities? ".

About a year after I retired two of my former co-w*rkers passed away, one of them 50 yo. I think I made the right decision. Best wishes.

Sent from my SAMSUNG-SGH-I337 using Early Retirement Forum mobile app

 

[Texas Proud]

A mentor of mine used to say money wasn't a motivation. He was a SR. VP. so it was easy to think he was wrong. He had money, I later learned he was LBYM.

I remember hearing that same comment from the CEO.... I told my manager (who did talk to him) to call BS... I said, 'Let's tell everybody that they are not going to be paid starting tomorrow and see how many people show up'....

I don't think my message was passed on

 

[Loving Life]

Some times you need to ride the wild pony -- I retired in 2011 at age 56, with homes paid for, and completely FI with a more $$ then I will ever need. I worked overseas most of my life and made a very high income. In 2012, I was offer a position in the Middle East for an obscene amount of money - So I got back in the saddle, they paid for housing, car, 5 weeks vacation, 30 holidays and 20 PTO days per year -we really enjoyed it. I could not say NO. After the 2 years, decided to re-engage retirement all was good with the world - well I was then offered an even better engagement Asia for another 2 years. Well, sometime you need to ride the wild pony and will not be able to or should you turn down they great $$$$. Eventually it will all come the an end and the money will stop. Enjoy it while it is available.

 

[jime444]

you've got to be kidding......

My CAREER never paid THAT well.........and after 55-60 hour, high stress weeks on salary for decades.......I'm more than ready to punch the retirement clock. I've always felt that I deserved every penny that I earned through my efforts. I watched others make tons of money from the hard work of my coworkers and myself.

I'm always glad (and somewhat jealous) of people that truly enjoy their jobs. Not that I don't like parts of my work. However, each and every day, it's getting harder and harder to do so.

Now, I'm more concerned about my health and making it through the last few years to enjoy a few decent retirement years. I hope it will be a good one.

 

[Texas Proud]

Some times you need to ride the wild pony -- I retired in 2011 at age 56, with homes paid for, and completely FI with a more $$ then I will ever need. I worked overseas most of my life and made a very high income. In 2012, I was offer a position in the Middle East for an obscene amount of money - So I got back in the saddle, they paid for housing, car, 5 weeks vacation, 30 holidays and 20 PTO days per year -we really enjoyed it. I could not say NO. After the 2 years, decided to re-engage retirement all was good with the world - well I was then offered an even better engagement Asia for another 2 years. Well, sometime you need to ride the wild pony and will not be able to or should you turn down they great $$$$. Eventually it will all come the an end and the money will stop. Enjoy it while it is available.

That is a great offer... and I would probably take it also...

You have 75 days off plus weekends... so another 104 days... that is almost half the year you do not work...

The reason I would do it is that I could travel around the area on weekends and some vacation for much cheaper than being retired... I mean, heck, they are paying for your living expenses... (mostly)....

 

[2017ish]

I am 45 and plan to retire at age 54. .....

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

First, you've gotten great responses.

Our position is that we are about a decade ahead of you, OBGyn (DW) and commercial litigator. Not as much income as others we know, but easily a lot--particularly when compared to my sibs who have blue collar jobs. We wondered, 10 years ago, whether we'd be able to pull the cord, as we both (esp. DW) really enjoyed the work. Now, we are drawing up retirement travel plans with some detail, but haven't quit yet because, like you, the exit door can't be counted on to reopen at anywhere near the same income. Nonetheless, when we get a number that makes us comfy under a pretty conservative analysis, we won't look back. As noted by others, the BS buckets are nearing the top.

OTOH, I can't imagine my peers at our firm ever cutting out, even though they are LBYM, and likely already FI. They love their jobs, almost to the exclusion of all else, and are unlikely to conceive of ever doing without that joy. Me, not so much.....

 

[CSdot]

Reading back through these responses as the desire to retire early bubbles back up. I have been telling myself I plan to retire in ten years for a year now. Guess that means I retire in 9.

My investments have been increasing nicely, but I know I need to be careful not to watch them too carefully, as there will be ups and downs, and the only time that really matters is 9 years from now when I retire early. I am happy that my kids' college funds are fully funded already, which is something I have witnessed as a problem with some of my older colleagues. One of whom is 58 and just now rebuilding his retirement accounts (he also leveraged all of the equity in his house and has to restart paying off his 30 year mortgage and HELOC) after sending his two kids to college, and having them move back in with him afterwards.

 

[TallTim]

Late to the party on this thread, but to the OP as a fellow lawyer who is also on the cusp of RE from a senior public co legal role (my last day July 3) ... it's worth bearing in mind that i you're in corp practice or a firm, you will have opptys to continue to do legal work on a less demanding schedule even when RE - if you want to. I've actually been surprised by the number of these sorts of things that have come my way since I announced I was leaving ... this despite being pretty clear that I wanted to take some time off.

You also have the ability to restrict or control the projects you take/hours you work or even clients you take .. all the way from joining a small(er) firm or even starting your own solo/virtual practice to taking the odd one-off assignment from your old colleagues, etc. Lots of ways to do it ... so if you're already FI and just worried about RE, there are pathways to stay involved!

 

[Jay_Gatsby]

Late to the party on this thread, but to the OP as a fellow lawyer who is also on the cusp of RE from a senior public co legal role (my last day July 3) ... it's worth bearing in mind that i you're in corp practice or a firm, you will have opptys to continue to do legal work on a less demanding schedule even when RE - if you want to. I've actually been surprised by the number of these sorts of things that have come my way since I announced I was leaving ... this despite being pretty clear that I wanted to take some time off.

You also have the ability to restrict or control the projects you take/hours you work or even clients you take .. all the way from joining a small(er) firm or even starting your own solo/virtual practice to taking the odd one-off assignment from your old colleagues, etc. Lots of ways to do it ... so if you're already FI and just worried about RE, there are pathways to stay involved!

I've actually seen this as well, being a senior in-house counsel type. Several of my former colleagues decided to do some part-time legal work for their former employers. It was a win-win for the company - their comp & benefits package is off the books, the company gets to write off their billable time as an expense, and an opening exists for one of the remaining members of the department to move up a level.

 

[Katsmeow]

I am an attorney. 5 years ago I went from a very full-time practice to working very part-time. For awhile I went in a day or two a week to the office. The last couple of years I've worked solely from home and only for a very few hours a week. It has worked very well for me.

 

[Tadpole]

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

Actually, the answer is (IMO) that "you can't take it with you". Unless a ever increasing total number satisfies your life entirely in spite of the cost, go do some other things before it's too late.

 

[eta2020]

I am 45 and plan to retire at age 54. I have a dedicated amount per month going to my Roth 401(k), and a dedicated amount per month going to my non tax deferred bridge account (to carry me from 54 - 59.5), and my house is scheduled to be paid off at age 54, so everything is shaping up according to plan.

Here is my question, what if you are in a career (I am in law), where it is a shame to let so much money go. I am not having second thoughts, but has cutting the cord been hard for some here? The answer may be that I make a good deal of money, but it's at the cost of having to deal with others headaches.

50-55 is a sweet spot to retire.

You also have limited amount of healthy years. So if you continue working pass 55 you have to ask yourself if it is a shame to let so many healthy years go.