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One More Year for Very Young Dreamers
06-25-2013, 11:22 AM
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#1
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Nov 2007
Posts: 7,746
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One More Year for Very Young Dreamers
I was doing some back of the envelope calculations to see what One More Year (OMY) would get me. It surprised me how much OMY means to a very early retiree (someone under 40 at FIRE) which is how I would classify my plan.
Take a 35 year old wannabe retiree with $1.5 million in their portfolio and a savings rate of $90,000 per year (probably not that rare for those very early retirees aiming for an under-40 retirement age).
One more year at a 5% real return rate equals $165,000 larger portfolio in real terms, or $5400 in additional annual spending during ER (using a 3.25% withdrawal rate). An 11% boost to annual spending or a large margin of extra safety.
This is roughly the situation I may experience in another few years. Even if I have enough it may be worthwhile to put in another year or two simply to have more safety or the option of a higher withdrawal rate.
__________________
Retired in 2013 at age 33. Keeping busy reading, blogging, relaxing, gaming, and enjoying the outdoors with my wife and 3 kids (8, 13, and 15).
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06-25-2013, 11:51 AM
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#2
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Moderator Emeritus
Join Date: May 2007
Posts: 12,901
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Yep, OMY can make a big difference. OMY for us = almost $10K in additional annual spending for the rest of our lives! That's a lot of money to leave on the table if you don't despise your job. So it goes back to the concept of "enough", which is valid at any age.
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06-25-2013, 01:17 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Feb 2013
Posts: 9,358
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Another option is The Millionaire Next Door method and find a job or business you actually like and still makes money. If you don't have to work for a living you have time to explore different careers. I think I am on my fourth career try right now since leaving the corporate world.
You don't have to be 100% retired or working at your current job for additional years. There are lots of other options.
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06-26-2013, 09:16 AM
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#4
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Full time employment: Posting here.
Join Date: Apr 2006
Posts: 969
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This is a significant contributor to my own personal OMY syndrome. I am hoping to turn over a new leaf this year or very early next year; and, I am no longer as set on calling it permanent ER; maybe it will be; but, maybe it will just be a sabbatical; or, maybe a career change.
A few years of not drawing down the portfolio could make a much larger difference than continuing to contribute.
__________________
If there's one thing in my life that's missing; It's the time I spend alone
Sailing on the cool and bright clear waters; There's lots of those friendly people
Showin me ways to go; And I never want to lose your inspiration
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06-26-2013, 09:11 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Jun 2010
Posts: 2,301
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OMY also means 1 less year to cover with your portfolio, 1 less year to SS, and your SS earnings should be an extra $1300/year (waiting to 70).
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06-28-2013, 08:48 AM
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#6
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Mar 2003
Posts: 18,085
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I have gotten cured of OMY or potential backsliding this week. The most horrendous, pointless, and soul-killing business trip I think I have ever been on. If I waver between now and early next year, all I have to do is think back to this miserable experience.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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06-28-2013, 09:41 AM
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#7
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Give me a museum and I'll fill it. (Picasso)
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Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,371
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 Quote:
Originally Posted by brewer12345
I have gotten cured of OMY or potential backsliding this week. The most horrendous, pointless, and soul-killing business trip I think I have ever been on. If I waver between now and early next year, all I have to do is think back to this miserable experience.
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You should bookmark this post and save it to look at should you waver at all. 
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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06-28-2013, 10:09 AM
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#8
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Mar 2003
Posts: 18,085
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All I really have to do is look at the scars.
__________________
"All animals are equal, but some animals are more equal than others."
- George Orwell
Ezekiel 23:20
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