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Old 11-20-2011, 10:36 PM   #21
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Originally Posted by slazenger

This reasoning tells me you save in a much different way than I do. A "pay cut", by my savings method, would primarily affect my standard of living, not my retirement date. I save a set percentage of my income. I consider that percentage non-negotiable. So if I get a "pay cut", the amount saved drops, but so does the amount I need to live, since both are based on percentages of my gross income, not raw amounts unaffected by income change. If my pay cut were severe enough, it would basically mean my house goes on the market so I can buy a cheaper one, and I'd buy cheaper cars.

I'd take another hard look at how your saving. IMHO, the percentage approach beats the others. I think it's prudent to get used to a percentage approach, because that same approach will ensure you don't run out of money in retirement.

Said another way, you seem to be implying your standard of living is "fixed', but it is your savings rate that will be affected. I think that is a flawed approach. If the two go hand-in-hand like I do it, it's a self-correcting system.

SO..... the debate, if I were you, would be "Do I want to lower my standard of living for less stress?"
That only works if you CAN lower your standard of living. If one is living as frugally as they can already, then their standard of living pretty much Is fixed, and saving for retirement would push back your FIRE date if the amount you can save drops.
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Old 11-21-2011, 11:08 AM   #22
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Originally Posted by slazenger View Post
This reasoning tells me you save in a much different way than I do.
Our savings methods may not be that different. I have a fixed “minimum” percentage put towards retirement. Fortunately, there are also “discretionary” amounts that get thrown in (bonuses, cash from months were increased hours at work translate into lower expenses outside of work, etc). It’s that “discretionary” piece that will be eroded by a pay cut, pushing out my FIRE date.

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Originally Posted by slazenger View Post
…"Do I want to lower my standard of living for less stress?"
I have a living standard I am targeting for my FIRE years. At this point I prefer to not reduce it in order to FIRE sooner. Getting to that standard in my late 40’s is preferable to FIRE in my early 40’s with a lower standard. Currently, this is a trade-off I am willing to make, that may change as the years go by.

Lowering my hours/stress in the pre-FIRE years would increase my quality of life in those years. So I’m trying to decide how many of my FIRE years I want to sacrifice for improved quality of life in the pre-FIRE years. It’s proving to be a more complex decision then I thought, especially after reading comments posted here and in other threads touching on trade-offs we all face.

T
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Old 11-21-2011, 11:54 AM   #23
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Thanks for all your comments. It is extremely valuable to get such a broad set of thoughts. I’m finding that some ideas that I liked are conflicting. So it seem that what I need to do first is get a better understanding of my personality and then go with what works best with it. Fortunately, there is no pressing need to make a choice in a hurry.
Absolutely correct! You can make the decision to slow down whenever you want. And it isn't necessarily an irrevocable decision either.

Personally, we are at the point where our progress towards reaching FI is predominately driven by increases in portfolio value due to stock market performance and dividends/interest. Increasing income greatly doesn't significantly reduce "years to FIRE". While DW and I are both still working full time, we still have our eyes on the ball of being FI. We don't want to sacrifice quality of life now by working extremely hard now, just to flip the kill switch a year or two earlier. Why do that when we can enjoy life now?

Part of our thinking revolves around having 2 young children. We can't get back these years of watching them grow up. I would rather look back in 5 or 10 years and see that I have spent ample quality time with my kids than look back and think "wow, I really missed their childhood because I was always working and traveling but now that I am FIREd I can spend some time with them". By then, they won't have much time for me!
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Old 11-21-2011, 03:38 PM   #24
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After losing a few friends this year that were way too young, I think it's important to enjoy life while you can. If a less stressful job means that you can have 15 years of easy work and enough free time to have fun vs 10 years of hard work and no fun, I'd have to vote for the less stressful job.

Realistically, it's probably not that straightforward. I'm in a hard situation where I'm in a well paying job that has just gotten worse and worse over the last few years. It's gotten me really frustrated, and wanting to quit, but I recently realized that there's still a lot of good things about this job that I should be happy about. So I'm trying to enjoy what I've got, instead of complaining all the time.
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Old 11-22-2011, 07:31 AM   #25
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Originally Posted by Tif7 View Post
I have a living standard I am targeting for my FIRE years. At this point I prefer to not reduce it in order to FIRE sooner. Getting to that standard in my late 40’s is preferable to FIRE in my early 40’s with a lower standard. Currently, this is a trade-off I am willing to make, that may change as the years go by.
Me too. We have a bunch of mini-milestones built into our FI calculation to help us work through this. "OK, now we have saved enough that if we chose to tap it, we've achieved FI on food. OK, now we're FI regarding housing. ..." etc. Once we get past necessities, then we will be in a position to debate the rest: "Is it worth our time to keep going for another 8 months to pay for biannual European vacations for life?"
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Old 12-27-2011, 02:52 PM   #26
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Hi,

I was originally planning for age 52 (10 years from now), but now I am planning on 57. I am a fed, and my health benefits would be lost if I retire before 57. For a while, I was OK with that idea, especially when the market was doing well. But now, I realize it would much to risky and expensive to have to fund 13 years of my own health insurance (from 52 to 65).

Fortunately, I like my job and the people I work with, so I am OK with it. We bought a cabin in the mountains last year, something we thought we'd do at retirement, because once I decided I'd be working longer, I determined that I didn't need to save as much money for retirement. I haven't regretted that decision one bit, as we use the cabin all the time, and I love it.
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Old 12-27-2011, 08:20 PM   #27
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I think that you should at least be able to enjoy life during the 10 years, otherwise, I would opt for the 15 year plan.
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Old 12-28-2011, 08:48 AM   #28
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Quote:
Originally Posted by Tif7 View Post
I have a living standard I am targeting for my FIRE years. At this point I prefer to not reduce it in order to FIRE sooner. Getting to that standard in my late 40’s is preferable to FIRE in my early 40’s with a lower standard. Currently, this is a trade-off I am willing to make, that may change as the years go by.T

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Originally Posted by FUEGO View Post
Absolutely correct! You can make the decision to slow down whenever you want. And it isn't necessarily an irrevocable decision either.

Personally, we are at the point where our progress towards reaching FI is predominately driven by increases in portfolio value due to stock market performance and dividends/interest. Increasing income greatly doesn't significantly reduce "years to FIRE". While DW and I are both still working full time, we still have our eyes on the ball of being FI. We don't want to sacrifice quality of life now by working extremely hard now, just to flip the kill switch a year or two earlier. Why do that when we can enjoy life now?
It's precisely the same for us. We set a min % to save and add discretionary amounts (bonuses, etc). Then, we enjoy ourselves with the $$$ that remain. We are also at a point where portfolio performance is the major net worth driver for us. Large contributions can still make a difference but, investment performance is the major driver.


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Originally Posted by GandK View Post
Me too. We have a bunch of mini-milestones built into our FI calculation to help us work through this. "OK, now we have saved enough that if we chose to tap it, we've achieved FI on food. OK, now we're FI regarding housing. ..." etc. Once we get past necessities, then we will be in a position to debate the rest: "Is it worth our time to keep going for another 8 months to pay for biannual European vacations for life?"
I like this. We already split our expenses into "essential" and "discretionary", and can track FIRE based on those two categories. For more discrete goals, we target things like purchase of RE home outside amount required to be FI, which really lowers "essential" expenses but, we just plan to use it as back-up $$$. And, regarding biannual vacations, that's essential very important to us.
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Old 12-28-2011, 10:05 AM   #29
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I'm at the beginning of the beginning of the end. : o )
Recently downsized my company and moved to smaller offices. Following the Pareto Principle I've also spent a portion of the last year "firing" a lot of small customers. You'd be surprised how hard it is to shake some of the little buggers.
Plan to "retire" in two years at 40. Been in my industry now 17 years, owning my own company for the last 9. It was fun for about 4 or 5 of those years. Tolerable for about 2. Sheer terror or boredom the rest of the time, depending on the economy.
For my two cents, I would agree with reducing your hours/stress, even at the cost of a few more years w*rking. Quality of life is what the whole FIRE idea is about and you shouldn't wait until you get to FIRE to improve your lifestyle. In fact, without quality of life, you may not even make it the age you can FIRE at.
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Old 12-28-2011, 10:26 AM   #30
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After losing a few friends this year that were way too young, I think it's important to enjoy life while you can. If a less stressful job means that you can have 15 years of easy work and enough free time to have fun vs 10 years of hard work and no fun, I'd have to vote for the less stressful job.
I agree. Over the past five years I have lost a number of relatives and friends who all past away far earlier than they should have. Another one is currently in hospice. Very sad. I was planning on FIREing at 58 for both me and two years later my wife. But...... she up and left taking half the assets, so my FIRE got moved to 61-62. Leaving a bit earlier than 65-66 will cost me a few dollars, but I gain 3-4 years of the healthiest years left in my life.
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