Retire from mega corp america

[MattInAustin]

Hey everybody...I am usually a lurker, but wanted to throw this topic out there to get some feedback. It might be sacrilege, but I will risk it...

My current plan is to reach financial independence which I categorize as being able to get by without a job for the foreseeable future. I figure if I hit my number and pay my house off I will be able to live off of a 4% withdraw rate and still be ok. I wouldn't be living large though. I am very close to hitting that number.

I really don't enjoy my job. Its not terrible and I make great money there, but it is completely unfullfilling. I really want out. However, I don't have to stop working all together, I just don't want to work for the man any more.

Given that I will have reached FI before quitting my corp job, I will not be so tied to needing a big salary. Instead, if I could just make a small wage in addition to my investments I will have plenty of spending money. I am thinking I would like to make about $20K a year off of a new venture (and withdraw about 2.5-3% from my investments), but I think this would only work out if I was passionate about what I was doing and only had to do it part time...or at least with very flexible hours.

My question really boils down to whether anybody has chosen a path like this and if so, was (is) it worth it? Would it be better to just stay in corporate America making a great salary and getting great benefits, but dreading the actual work, if only for 5-7 more years?

Thoughts?

Biker

 

[bow-tie]

Biker,
I can't say I've done what you are wondering about.  However, it seems to me that if you can find some type of gig that pays you enough that you only need to draw 2.5-3% from you $$ stash, then I say "damn the man" and be gone with thyself...  

Don't dread the work any longer if you can financially leave now.

 

[Nords]

My question really boils down to whether anybody has chosen a path like this and if so, was (is) it worth it?  Would it be better to just stay in corporate America making a great salary and getting great benefits, but dreading the actual work, if only for 5-7 more years?

I've done that. The military's pension plan doesn't vest until 20 years of service and I was more than ready to go by 12.

It's better NOW, three years into retirement, but at what cost? Looking back I was quite lucky that there wasn't some major family crisis, that I didn't stress myself into poor health, and that things didn't get worse than they were. I was extremely fortunate to be left alone to find a niche where I could perform without being hassled or expected to work too many unreasonable hours. Our family was able to continue on the same path without too high a price and we got through it. Life was crazy but apparently it was livable. And I'm sure that I'm not bitter!

Occasionally I'd discuss this with my father-in-law over a frosty beverage. He'd point out all his years of union strife, layoffs, strikes, uncertainty, long hours of overtime, eroding pension/medical benefits, and a generally high-stress civilian life. He couldn't believe that I was willing to chuck a military career for his world. As I got closer to the retirement date, his attitude was "Just stick with it and keep taking the money!!" Without being able to come up with a viable alternative, that's what I did.

But if I had a do-over, I wish I'd paid more attention to the Naval Reserve. Opportunities were all around me and I never really caught on. I would've been gone at 12 years and although the pension would've been deferred until age 60 instead of age 42, savings would have bridged the gap. I would've been home a lot more, family vacations would have been easier to arrange, and life would have been much less stressful.

This epiphany came shortly after retirement. The problem was that I had my head so deeply into my job that it was hard to pull back and get a perspective on what other opportunities were available. We didn't appreciate the Reserves until my spouse felt obligated to turn down an active-duty offer and picked up a Reserve unit. Life immediately improved.

You probably have other opportunities too, if you're in the frame of mind to hear the knocking. I'm not claiming that you should start your own business or be a franchisee or a private investor, but you might be able to take a sabbatical or a lengthy vacation or go part-time while you investigate other options. You might find more fulfilling work with the same company or in the same industry, or you might find your avocation in a completely different field. You might also be able to more closely examine your expenses & finances to realize that you've achieved FI now.

One or more of those things have happened to others on this board when they've taken the time off to evaluate without distraction. You can't really see or think clearly until you've had a few nights' good sleep and a week or two of quiet contemplation.

Or, as Thoreau said, you can continue to lead that life of quiet desperation. Hopefully it'll get you to retirement!

 

[hocus]

Would it be better to just stay in corporate America making a great salary and getting great benefits, but dreading the actual work, if only for 5-7 more years

My situation was similar in important ways to what you are describing, biker. In the 12 months prior to my resignation, I saved $88,000. Had I stuck with the corporate job another two or three years, it would have made a big difference in my long-term financial security. The other side of the story is that I had already spent nine years of my life energy at a job I wasn't too hot about. There comes a time when you have to play it the other way.

One thing that I did that helped a lot was to come up with short-term goals. I didn't just start at the beginning planning to save nine years and then hand in my resignation after that amount of time had passed. Short-term goals provide motivation. If you could make a deal with yourself to leave in 12 months or 18 months or 24 months, knowing that you had a serious plan in place to do that would make the 12 or 18 or 24 months a lot more bearable. You want to seek a balance. Staying in the corporate job a bit longer helps on the practical side. Making a plan to leave on a specified date helps on the dreamer side. You don't want to shut down either your practical side or your dreamer side--you need them both.

My other suggestion is to make more definite plans as to what sort of work you will do when you leave the corporate job. Handing in the resignation with only a vague plan in your pocket is a bad idea, in my view. One thing is, if you only have a vague plan, you will worry about whether it is going to work or not and that will detract from the enjoyment of not having to go to the corporate job. If you have a solid plan, your mental energy will be focused on that and you will feel good about the move you made. Another thing is that developing a more solid post-"retirement" plan will give you something on which to focus your mental ernergies for those 12 or 18 or 24 months. That time-period will not be such a drag if you are focused on directing effort to bring the dream to fruition.

One thing you need to be more specific about is the number of hours you intend to work post-retirement. I work longer hours now than I did when I had corporate employment. That's me, there's no rule that says you have to go that way. But there are some forms of work that are not likely to pay much unless you are willing to put a lot of effort into them (freelance writing, which is what I do, is one of those, in my view). Don't just say "I am OK with working part-time." Find out what part-time work is a realistic option and that appeals to you. I believe that doing that may lessen your concerns about making the shift you are contemplating.

 

[JOhn Galt]

HI Biker! "5 to 7 years" dreading your job? I wouldn't
have lasted 5 to 7 weeks, at least not after I had some
real life working experience. I expect that I was a
difficult employee/employer to work with/for and am quite certain there
are still some folks around who would agree

JG

 

[farmerEd]

As someone else said, 5-7 years is a really, really long time to "stick it out" for a few more points on your SWR...sounds like while you may not be able to ER, you probably have enough to take a few years off and scope out new opportunities and supplement your withdrawals...nothing wrong with that.

You could be dead a long time before 5-7 years is up. Enjoy things while you can...no matter how much you save you can also convince yourself to work just a little longer.

 

[yakers]

What may be in interesting question is how you will feel at work when you have built up enough resources to RE. I have watched people become retirement eligible and their attitude changes, sometimes better, sometimes worse. It may be that getting close to RE, even with some proposed part time work, changes your stress level at work.
As I see it the retirement decision is not binary, it depends on how much one can or wants to work, how well it pays, where they want to live and work and what other things are calling to them. Now Financial Independence changes just about everything, it is not a decision, it is an accomplishment, and it is actually more important than a retirement decision.

 

[brewer12345]

5 to 7 years is too long, but sometimes it is hard to make the leap. How about finding a different job for a few years that might incorporate more of what you do want and less of what you don't?

 

[John Galt]

Hey farmerEd .......good post. I quit very near the
high point of my career income-wise. Thus, I could have hung around and made a LOT more money. It would be nice to
have the $, but I have never regretted walking away when
I did. Once I saw I could do it (ER) everything changed.

JG

 

[Bob_Smith]

I have watched people become retirement eligible and their attitude changes, sometimes better, sometimes worse.

This is true. I always figured that the job would be more tolerable as my assets grew. For me it was the exact opposite. My tolerance for nonsense plunged. Rather than think, "I can leave anytime, so relax and enjoy the ride!" - I thought, "This is ridiculous! I don't need to put up with this crap!". I became more and more outspoken and pushed management to focus on the needs of clients (which was out of vogue with the new management team). My coworkers loved it - my bosses didn't. But my timing was poor. I needed to work another three years to maintain health insurance access, and my days were numbered. Suddenly and unexpectedly, they came up with an early retirement package that provided lifetime access to health insurance, and some money. It was like being rescued off the side of a mountain.

 

[MattInAustin]

These are all great comments. I know that it will probably never be easy to escape the seductive salary, benefits and stock options. Working one more year is like adding $3-5K to my SWR. Its hard to let that go. Plus the job isn't killing me, its just not giving me any satisfaction.

The other issue that scares me is that I am still pretty young (35) and I want to have a skill to fall back on if things go to crap. I know that if I just stop working I will have a tough time getting back in. However, if I start a side business, I will be gaining work experience and if things get bad in the stock market or whatever, I can maybe dedicate more time to the business to cover the gap. If things go well with my investments, I can keep it easy.

Then there is the whole stigma of being a bum (not that I think that you RE guys are bums ). I am single and looking for love (I know thats dangerous). Having a J O B is pretty high on the list of favorable bachelor traits. If I got of the rat race and ran my own business it would look much better I think.

Plus, and this is the most important part, I want to feel productive. I want to have something I do that I am passionate about and have some responsibility for. I could do all sorts of volunteer activities, but they don't have the side benefit of an income stream. Hobbies are great as well and I intend to pursue mine, but something about earning some dough seems like it would feel really good, especially if I enjoyed it.

I just read a book that focused on "Lifestyle Entrepeunership". That is, doing a business that gives you the lifestyle you are looking for and not just doing it to make it grow and be successful only. That book made some good points and I found it somewhat inspirational. Some of the case studies were of women that wanted to spend more time with their kids so they opened an online baby gift store. Or the guy that bought a dive shop because he loved the Carribean and diving. There was a couple that did the bed and breakfast thing to get out of the corporate rate race and they really enjoyed meeting all the new people that would come through. In each case the owners took a big pay cut, but ended up with lives they enjoyed much more. I find this very appealing.

I agree about breaking the task down into acheivable goals. In one year I would like to be completely out of my vested stock options, saved $x and have my investments set up how I like. I would also like to have a much better plan on the side business. I have been kicking ideas around...building prototypes...figuring out what type of business I want for a while, but this next year I really want to narrow it down. In 1.5 years I would like to have my house paid off and achieve FI. These goals help, but they are not very different than what I said 2 years ago. The FI magic number has a way of creeping up.

Thanks again for all the great info!

--Biker

 

[retire@40]

Plus the job isn't killing me, its just not giving me any satisfaction.

You only have a limited number of hours to live. Every hour you spend at a job giving you no satisfaction is one less hour you have of satisfied living.

I agree with you that you should look into starting your own part-time business that could give you more satisfaction, more flexibility to take time off for yourself, and possibly even more money.

 

[John Galt]

You might check out "Cutting Loose" by Dorothy Kalen.
I think it's out of print now. Not as good as
Paul Terhorst's stuff, but an easy read and there are
some nuggets.

Re. "mega corp. America", when I was a young man
looking for work, I applied at some large corps.
They wouldn't hire me, partly because my academic
background was weak. Anyway, after a bit I decided
I didn't want to work for them anyway, and shortly after
that I decided I didn't want to work for anyone.
It was a natural progression.

JG

 

[P.S.]

Nords,

Thank you so much for your lengthy response. Find it personally helpful at this stage in life.

Biker,
Does your employer sponser further ed? If you can make the time, then maybe you could pursue a grad degree, or if you have one, a second one in another field. In addition to the non-taxable income (employer paying schooling), you're learning reams of current info, get to add some extra letters to your signature, and can scope of a wide cast of similarly hardworking, motivated females .

 

[MattInAustin]

Hey P.S.

My employer will cover education expenses to a certain amount, but they don't usually give you leave to take the classes. Which means I would be doing night classes and weekend classes. This is the wrong direction! ;-) Although the thought of taking some classes and NOT having the job to do as well is appealing.

I actually have been looking for some business start up classes that I could take and also justify as a current business expense. Good ones are hard to find though.

Now, if I think of an MBA program as just a way to meet women it kind of changes things. I could use the opening line "..Hey, I really like you and I bet you would make an excellent second income stream to supplement my investment returns in early retirement! How do you feel about recycling dryer sheets?"

--Biker

 

[hocus]

I could use the opening line "..Hey, I really like you and I bet you would make an excellent second income stream

That's very funny. You may want to work on the wording a bit before you use it at a single's bar. Truth be told, though, I think that a line not all that far removed from the one quoted above might actually work. You might need to be sitting down to dinner instead of reaching for a drink. But there are a lot of people out in the world interested in the idea of financial freedom who could be drawn in by the suggestion that the person before them knows a little about the subject.

I don't have much of a social life now that we have the small boys to take care of. But I did manage to get to a Christmas party or two. At one of them, I started talking to a woman and she asked me what I did, and I told her, and we got into an extended talk about this financial freedom stuff. She was very interested. I'm married. If I weren't, it's the sort of thing that might in the right circumstances have gone somewhere. Maybe not. But maybe. This is not our fathers' idea of financial freedom we are talking about here. The stuff we are talking about is sexy stuff.

 

[Nords]

A couple issues here.

Biker, you need to do the things that make you happy without regard to others' perceptions. But IMO it seems that those perceptions are framed by work rather than by lifestyle. Here's another way to look at it...

The other issue that scares me is that I am still pretty young (35) and I want to have a skill to fall back on if things go to crap.   I know that if I just stop working I will have a tough time getting back in.  However, if I start a side business, I will be gaining work experience and if things get bad in the stock market or whatever, I can maybe dedicate more time to the business to cover the gap.  If things go well with my investments, I can keep it easy.

You DO have considerable fall-back skills-- you achieved financial independence in your 30s, a challenge that eludes the vast majority of the working people you'll ever meet. If you have to trash your ER for work, you'll definitely want to be self-employed since you'd have trouble respecting the kind of boss who can't figure out how to ER.

Getting back in is no problem-- you got in at least once before and you can do it again. In fact, with financial independence and everything else you've learned since the last entry, the re-entry would be even easier. Even if you're in a tech niche, several of the veterans here have said that they'd rather hire an experienced coder with outdated languages than someone recent graduate whose biggest asset is knowing all the latest "cool" developing programs. Considering the alternative of enduring the working world just for the sake of keeping your membership card, I'd rather be unemployed!

Everyone's a genius investor in a bull market, and anyone can keep it easy if things go well with their investments. It's well worth your time to craft a portfolio plan where you can CONTINUE to keep it easy if things DON'T go so well. You don't necessarily need to survive 1929-1937, but a 4% SWR and a couple years' expenses in cash can go a long way to disaster-proof any portfolio. If your portfolio can't meet those requirements then it's undercapitalized-- perhaps it's worth working/saving until it has enough.

Then there is the whole stigma of being a bum (not that I think that you RE guys are bums ). I am single and looking for love (I know thats dangerous). Having a J O B is pretty high on the list of favorable bachelor traits. If I got of the rat race and ran my own business it would look much better I think.

Let's see, which kind of woman would you like to spend the rest of your life with (or what'll seem like eternity!):

"Oooh, captain of industry! Entertain me and buy me nice things!!" or

"Hmmm, no job stress, no deadlines, owns his own car & house, not too busy working to spend time with me, dresses casually & comfortably, not into a material consumptive lifestyle, has time to take care of himself, looks pretty happy, able to provide 24/7 childcare. Can I please have your children?"

Maybe the one you're seeking is running in a different social circle than the one you're working in. It's amazing who you'll meet in the park on a weekday morning when everyone else is "working"!

Plus, and this is the most important part, I want to feel productive. I want to have something I do that I am passionate about and have some responsibility for.

ER is so damn productive that some days I wish I could take a vacation. And it's the ultimate passionate responsibility-- you can create your own, or you can have someone provide you a ready-made environment where everything's controlled, uh, created for you. Oh, wait, that's a work cubicle...

I could do all sorts of volunteer activities, but they don't have the side benefit of an income stream. Hobbies are great as well and I intend to pursue mine, but something about earning some dough seems like it would feel really good, especially if I enjoyed it.

Your retirement portfolio is supposed to supply that income stream. If your self-worth or activities depend on the size of your, er, income stream then perhaps you should keep working.

The benefits of hobbies or of being available to help people are far more remunerative than cash! I wouldn't enjoy surfing at all if I had to make a living from it, and I wouldn't enjoy teaching people how to do it if I expected them to pay me.

A change of perspective is indicated. Instead of viewing ER as a different style of work, try viewing it as a way of living-- and get a life instead of a career!

 

[Hyperborea]

Re: A couple issues here.

Even if you're in a tech niche, several of the veterans here have said that they'd rather hire an experienced coder with outdated languages than someone recent graduate whose biggest asset is knowing all the latest "cool" developing programs.

I think it depends on a few factors that are hard to know in advance or even to quantify.  How long is the gap (can you get in touch with your contacts)?  How close to the leading edge were you when you stopped (i.e. how far back have you fallen)?  How old are you (there is an age bias in the computer industry starting at perhaps 40 or so)?  What are you trying to get back into?  What has happened to the industry  (sometimes there are phase changes where things change drastically)?

Are you an ex-Oracle database guy (i.e. one of the people at Oracle developing the database software) in their late 20's or early 30's with a good education (Masters or at least Bachelors in CS from a good school) who stepped out for a year to backpack the world and is now looking for a job developing Oracle database setups for an MIS shop?  Pretty slam dunk.  Even if you were wanting back into the Oracle database development (or similar type stuff) it shouldn't be too hard though not slam dunk.

Are you a 45 year old ex-system admin with no more education than a MS certificate who worked in a small MIS shop and took a 10 year break and hasn't used a computer for much other than email and a bit of web surfing since then?  Big difference from the first case.

I've hired somebody who was similar to the first case before - he had taken a 6 month break to work nights as a bar tender in a ski resort and skied by day.  He was a good software engineer.

Once I decide to call it quits I figure I've got about 2 to 3 years before I'll have a lot of trouble getting back into the leading edge software development work I do now.  Perhaps another 3-4 years after that before getting high quality good paying development work will be hard.

 

[fln]

Re: A couple issues here.

(there is an age bias in the computer industry starting at perhaps 40 or so)?

Based on my experiences at Fortune 500 companies, this is unfortunate but true for IT non management personnel. Specifically with developers/coders, the companies that I were with have aggressive college recruitment programs for these positions both for cost saving as well as a belief that these employees will be better contributors (more mallable, enthusiatic, put in longer hours etc.) than experienced and older hires; without up-to-date skills would just be another strike.

 

[LEX]

Biker:

Just a general observation.  I worked for two fortune 100 level corporations, one as a senior executive.  What confused my focus on ER was the lure of six, possibly seven figure money left on the table in stock options and resticted stock.  The irony of leaving money behind to leave early after all the hard work to get it (and its both hard work and usually hard luck) eats away at your confidence to ER.  But the key is what is known in some circles as having enough "go to hell" money that there is plenty of wealth to cover you and your family so long as you keep your values and wits in line.  

One other point I learned is that you can not take the "mega corporate" value system into ER.  Take the value system of your grandparents, or any relative that survived lean times such as the depression.  And for heavens sake do not attempt to run in the same social circles as those who have totally mortgaged their lives to the corporate "getting and spending" lifestyle.  It will eventually bankrupt anyone who starts believing that their paygrade is personal affirmation of intrinsic genious.  Corporate ego trips are lethal to an ER.  Just focus on the one real wealth one may obtain through a frugal ER: TIME, SELF DIRECTED LIVING and enough freedom to make the next part of one's life truly matter.  

 

[Cut-Throat]

Re: A couple issues here.

Based on my experiences at Fortune 500 companies,  this is unfortunate but true for IT non management personnel.  Specifically with developers/coders, the companies that I were with have aggressive college recruitment programs for these positions both for cost saving as well as a belief that these employees will be better contributors (more mallable, enthusiatic, put in longer hours etc.)  than experienced and older hires; without up-to-date skills would just be another strike.

I am probably as worthless as a Cobolasaur

 

[REWahoo]

Biker:
One other point I learned is that you can not take the "mega corporate" value system into ER. Take the value system of your grandparents, or any relative that survived lean times such as the depression. And for heavens sake do not attempt to run in the same social circles as those who have totally mortgaged their lives to the corporate "getting and spending" lifestyle.

Lex, I agree but there is no reason to wait until ER to reject the "mega corporate" value system. The sooner you do it, the quicker you get to ER.

Biker, start spending as if you were already in ER, hold your nose, grit your teeth and cut those 5-7 more years in half and you don't have to worry about continuing to wrk after ER.

REW

 

[sgeeeee]

. . . What confused my focus on ER was the lure of six, possibly seven figure money left on the table in stock options and resticted stock.  The irony of leaving money behind to leave early after all the hard work to get it (and its both hard work and usually hard luck) eats away at your confidence to ER.  But the key is what is known in some circles as having enough "go to hell" money that there is plenty of wealth to cover you and your family so long as you keep your values and wits in line.  . . .

Good points, LEX.

I balked and shuddered about the golden handcuffs I was wearing for a few months. I've never heard the expression "go to hell" money, but that is what allowed me to leave and that is exactly what I was saying.

 

[LEX]

Salary- Guru:

I picked up the term "Go to Hell" money during a stint at Chevron Corporation.  It must have originated in the Oil patch.  The context of the phrase is when a indepdendent oil promoter drills a well that comes in with enough production such that he can pay off all his creditors, especially the banks that have a lein on the drilling equipment, and include with his final payment in full a letter that they can all "...go to hell..." with their usually onerous loan restrictions.  An independent is often obligated by the high risk, hard money investment bankers to mortage everything he's got to drill a prospect, often including his home and personal assets as collatoral. The fees charged him are usurious and the terms all one sided in favor of the bank.  The oil men I have worked with over the years usually gage their success on being able to "de-louse' themselves of the lawyers and banks through payout on successful venture pay-off, often considering the pay-off more important than the big money they might have made.  Its like the feeling one gets when he beats the house in Vegas knowing the odds are stacked against him.  Keep the chips and walk away....

 

[Nords]

Hmmm, I thought it was based on the Wall Street concept of a retirement-funding stinkin' rich "f*** you" deal.

One entertaining example is Ben Mezrich's "Ugly Americans : The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions".