What income did you give up?

[Fedup]

My husband will walk away tomorrow with a bit more, but reasonably similar. He's glad to pull the plug.


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[Lucantes]

Both my wife and I will be taking early retirement at age 50 (normal is 60 from our company) next year and what we will be giving up annually is fairly significant (figures are for combined):
Salaries: $360K annually with normally a 5% annual increase (minimum of $3.6M over the 10yrs from 50-60).
401K: $19K annual contribution from company (9% match). $190K from 50-60.
Pension: approx. $120K per year annual increase (minimum of $1.2M over the 10yrs from 50-60).
Annual Bonus: $37K per year (minimum of $370K over the 10yrs from 50-60).
So about $536K per year or at least $5.4M from 50-60.
But all that being said we don't care (it does however occasionally suck looking at the numbers in black and white I must admit). We reviewed the numbers last year as we had considered leaving in 2016 but decided to stay to 50 to get the corporate retirement medical insurance, and the extra 1 years worth of $500K.
We will be returning from overseas work for the last 20+ years and will be moving onto a new stage in life. We are trading $$ for time to enjoy ourselves and that suits both of us just fine. We don't have very expensive tastes and so should do just fine for the rest of our lives, however long that might be.

 

[hnzw_rui]

Financially, it's almost always best to keep working.

One of the exceptions being if you have COLA pension with retiree medical. Given mandatory pension contributions, FICA-Medicare, union dues, etc, there actually gets to be a point where you're just giving money to the system.

 

[Danmar]

It's much more complicated than simply "walking away". For most of us there is a balance between the added satisfaction/enjoyment/freedom that retirement provides, versus the "cost' of giving up the compensation. Once your assets get to a certain multiple of desired spending, why fixate on something like pre tax comp? Ongoing comp, even if significant, will be less important once the assets are in place. If you continue to value your comp highly, you would never retire voluntarily.
In my case, with a little assistance(encouragement?) from my employer including a very generous retirement "package" which included enhanced pension, salary and benefits continuance, I was very happy to retire. Obviously, my comp at the time was significant but so were my assets. I was ready to go regardless of the comp. Really only a timing not absolute type of decision.

 

[Ronstar]

I went from a part owner of the business working full time to a non-owner working 1 day a week over the course of several years prior to pulling the plug 100%. I sold my company stock incrementally over the last ten years of employment, so my share of annual profits decreased as years went by. And my salary decreased along with the reduction of work hours. I can't calculate how much $ I gave up during this period, but it was a significant, (but more than well worth it). On retirement day, I only had about $20k to give up.


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[Lucantes]

It's much more complicated than simply "walking away". For most of us there is a balance between the added satisfaction/enjoyment/freedom that retirement provides, versus the "cost' of giving up the compensation. Once your assets get to a certain multiple of desired spending, why fixate on something like pre tax comp? Ongoing comp, even if significant, will be less important once the assets are in place. If you continue to value your comp highly, you would never retire voluntarily.

+1

 

[jabbahop]

It was a lot in gross terms but salary + bonus was only about 6% of net worth so as Danmar said, at some point you have enough and that is why we all are here


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[papadad111]

My big aha moment was when my effective tax rate on earned income grew beyond 50 percent.

Federal 28-32
State. 10
Unemployment. 6
Medicare
New Obama care tax 3.8

Don't get me started with all the reductions alternative minimum tax nonsense ...

It wasn't how much I was making. It was how much I was working and giving up to taxes.

&$@8 that ... I was done.

 

[big-papa]

Financially, it's almost always best to keep working.

+1
But that doesn't mean you should. While it keeps me busy and I like the social aspect, I'm out as soon as I feel I've hit my goal (with some margin). There will be plenty of additional, non-stressful things to keep me busy.

 

[Dawg52]

I walked away from comparable numbers as mentioned. At the age of 52 and in 2007. We all know what happened soon there after. But it all worked out in the end, I held on and the markets came back. So no regrets about retiring early now, although it did cross my mind in 2008-2009.

 

[Mo Money]

I will describe what I walked away from this way: At the time I ER'ed almost a year ago, my net worth was increasing by an average rate of about $250K/year, and I was spending about $100K year to live on.

And so I had some OMY issues. But the tug of OMY did not win. I still ER'ed. I was having some health issues that were w*rk-related. The off*ce, with its growing bureaucracy and often bit*hy politics, was crushing my soul. The pressure to generate just under a million a year in legal work was also getting burdensome. I'd been chained to my desk for 28 years. The extra net worth was not worth it.

 

[Corporateburnout]

I left behind a substantial income + 25% bonus + 6% 401K company match + stock options but I regained my health and my sanity. I lost 20 pounds, overcame type 2 diabetes and I'm stress free.

Once I reached the financial goal that allowed me to maintain my desired standard of living I was out...It's been almost 2 years with no regrets whatsoever.

Being healthy and free to do what I want when I want is priceless......

 

[scrabbler1]

After I had reduced the number of weekly hours worked to only 12 back in the middle of 2007 (in anticipation of ERing in 2008), I knew I would be losing very little when I did pull the plug. That reduction in weekly hours worked eliminated nearly all of the remaining benefits I earned every year. Those included 401k matching, annual company stock allocation, paid time off (except for one day of jury duty I took in 2007), and eligibility in the group health insurance program. I still earned a small bonus along with my small salary (salary just over $30k), and I was eligible for the pretax transit program to reduce my shrinking but still considerable commutation costs. But most importantly, being employed kept me in the overall company stock (ESOP) program so its value rose another $39k in those 18 months, reaching my magic number to finally ER.


The company stock value took a hit after I left in late 2008 but it did bounce back like everything else by the end of 2009 and has continued zooming upward. No way I was going to work there more just to break even in 12 months.

 

[militaryman]

People sometimes ask if money is more important than life. But both are important. In fact, money can sometimes buy life.

None of this would be possible if I retired 10-15 years ago as soon as I became FI.

Money can be put to good use, and it makes me feel good when it is.

Thanks for this perspective, which is where I think I'll find myself in 8 years when eligible to pull the plug and enjoy a moderate retirement or continue to work and impact other folks lives and get much satisfaction from it. If it were only about me it would be a no brainer as far as I'm concerned to retire when eligible as my investments would cover the lifestyle I anticipate living.

But it is not only about me, so I'll be facing a dilemma also -- Really though I see it as a win -- win -- If I have an early retirement -- WIN If I decide there are worthwhile "causes" that push me to work a few extra years -- WIN -- even if I die shortly thereafter

 

[frayne]

Total package was around $130K when I walked away a little over ten years ago. Funny thing was I was living on about $50K per year and what wasn't going for taxes was going into savings/investments. Still living on about $50K per year and the only thing I regret is I didn't do it two years sooner as I would have been fine, financially speaking.

 

[mrfeh]

I just received my review, bonuses and raise this week. Annual salary and bonuses are right at $122,500. (4 weeks vacation, 4% 401K match, etc.) Not much different than past years. When I look at that number, I wonder if I am a fool to give it up. (I am giving it up, that thought just runs through my head a bit.)

Of course, even if I worked until I was 70, I would have the same issue. People would line up around the block for a job that paid that amount, but most would be unqualified.

If you got laid off and decided to FIRE, it’s not really a decision you made. If you requested severance and got it, that would be a decision you made. If you gave up a job and got a big pension, you only gave up a partial amount.

When you finally declared FIRE, what was your number that you gave up?

I understand your state of mind. I'm planning on going part time or fully retiring this year, with income similar to yours. There is that nagging voice that says I'm crazy to walk away from such a paycheck, especially when I still enjoy my job (most days).

However, with a withdrawal rate of about 3%, I should be good to go, so why not give myself the gift of time?

 

[eytonxav]

When I took an early retirement back in 2003, gave up a big salary and a bonus of 25 - 30%, plus company 401K match, large stock option award and an office that overlooked a TPC golf course. It was great compensation, but that paled in comparison to the negative environment that was created after a merger with another mega corp (and I tried to tolerate the new entity for 3 years). Just got sick and tired of having to layoff perfectly good people each year.

 

[NanoSour]

I walked away from $220K, but more importantly from a job I loved to move cross country where my DW wanted to live. I don't miss the money as our lifestyle is the same in ER, but I miss the job and the people I worked with considerably.

 

[pb4uski]

....It wasn't how much I was making. It was how much I was working and giving up to taxes. ...

That was a factor for me too. I was paying more in taxes than most middle class families earn. In the last year I worked, 27% of what I earned went to SS, medicare, federal income and state income taxes. As a W-2 employee, there was nowhere to hide.

 

[Car-Guy]

I walked away from some pretty good bosses, and a very, very good total compensation package. However, I also walked away from office politics that seemed to get worse every year, and a job where I was was truly burned out. Looking back, what keep me there the last few years before I retired was "greed" (money). It was hard to say "quit sending me that check" (and other compensation) plus almost 2 months of vacation each year.

After ~4 years of retirement, I don't regret it at all.

 

[kcowan]

$250k with subsidized Blue Cross. No added pension. I had worked for 5 extra years to help finance my divorce. Little did I know that I would connect with someone of means. She was making $200k and retired two years later. That was in 2004.

We mico-managed the equity portfolio for a few years to maximize returns, then adopted a dividend-oriented equity portfolio.

 

[Mulligan]

I walked away from 2 year contract left at very low end 6 figure salary and about 10k yearly loss to pension. This is peanuts compared to most posted here. No wonder I have regrets....It clearly wasnt worth my time.


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[ESRwannabe]

I'm not retired but I'll chime in anyway.

If I were to retire right now I'd give up around $60k w-2 income, monthly 401k match of $50, subsidized health insurance (note I have never used it so far, knock on wood), and the biggy would be contributions to my state's pension system.

If I retired today I'd be able to collect about $1,000 a month from the pension(starting at age 60). If I keep working until 55 that amount is projected to be twice as much (starting at age 55). Either way it has a 3% yearly cola.

My living expenses are around $28k a year. My taxable brokerage account income from dividends is around $23k a year. So with w-2 and taxable investments I have available around three times my living expenses to spend.

I don't own a house yet. May or may not buy one. I'm 39. Theoretically I may switch to part-time work at 45 if I can find a 100% telecommute IT job. Possibly I will keep working until 55 and max out the pension.

 

[MichaelB]

I gave up a mid-7 figure income. That's right. Of course, I was being paid in Venezuelan currency, so in US$ it was worth much less, especially the last couple of years when I had to exchange everything on "parallel exchange markets".

This thread is a testament not of how much we left behind but how much we had, and just how valuable early retirement is. In my case it was worth my life, which I got back when I quit my job. Not one second of regret.

 

[mystang52]

I gave up a mid-7 figure income. That's right. Of course, I was being paid in Venezuelan currency, so in US$ it was worth much less, especially the last couple of years when I had to exchange everything on "parallel exchange markets".

This thread is a testament not of how much we left behind but how much we had, and just how valuable early retirement is. In my case it was worth my life, which I got back when I quit my job. Not one second of regret.

+1. Literally yesterday I was on the phone with my best friend. He is still w*rking, makes a very high salary (I estimate 250 Grand or so), has a teacher wife making about 100 Grand, and yet still has credit card debt, mortgage, etc etc. In our discussion, I teasingly told him how I was thinking about him that day.
I mentioned I had gone on a glorious run that day, and realized that being ER'd sure pays a heckuva lot less than w*rking, but man o man it sure is a lot more fun. One makes their choices.......