Turning 40 and on the fence - any advice?

[midlifeguy]

Man, I love this forum. I feel like I've found my tribe. Anyway, I am 39 and live in New York City (actually Westchester County). I have spent nearly 20 years in PR and communications and marketing. I quit my job a year ago after we sold the firm I was working for (I was a significant shareholder after a MBO). Was on an earn-out which expires next month. I got a call from another PR agency to come in and interview for a very senior position (making 300k or so) and find myself somewhat jazzed about the job but also worried that I would be going back into that black hole of craziness called commuting and working in New York City. This is the world I fled screaming a year ago.

I feel too young to retire, not to mention somewhat unsure about how well the finances could carry me for 35 years or so. (I plan to die by 75, which would be an extremely ripe old age for men in my family). I am considering going back to school to become a high school teacher and am actually going to observe my friend's class tomorrow to see what I think. I feel like this would be a great way to give back to a society that has been very good to me, while also giving me a way to occupy my time and get great benefits. (Will let you know how the observation goes - it's possible I will run screaming from that too).

Anyway, here is my situation. I have a partner but we're not married. No kids and no plans to have any. He will retire from the government in three years (2012) with full pension (about 4,500 per month) and healthcare for the rest of his life. I cannot get any of his benefits because, well, life isn't always fair. We own our home outright, which is worth $900k right now, but three years ago would have been worth $1.2 million. So there's always the option to sell the house and pull in a good million in cash. When he retires, we are pretty set on getting out of New York. The city has been good to me economically but it's too expensive and too money-driven as a culture. (I'm a pretty simple guy with a pretty modest lifestyle at heart.) I have a portfolio of $1.9 million (140k of this is in a 401k). We have a small cabin upstate (again, no mortgage) worth 100k or so which we could sell anytime.

I have run FireCalc scenarios and the numbers seem to show that I can stop working now and get 65k a year out of my portfolio for 35 years or more. If we sell the house and downsize or rent, I could add the proceeds to the portfolio and withdraw even more. So you're probably thinking "this guy should bolt now!"

But the problem is I'm not sure I'm ready. Part of me thinks I should go back in for a few more years and save all the money I can, and THEN split and go become a teacher (or a mime or whatever). Since quitting my job I have been feeling pretty isolated and miss the solidarity of a workplace. I also wonder if I would be wasting my busines talent (which has served me well). I guess I could use a financial reality check, but even more so an emotional reatlity check. Any opinions on what I should do? Thanks.

 

[Bestwifeever]

Welcome to the boards. Perhaps in three years, when your partner retires, things will change enough so you can share benefits?

You are lucky to have a lot of options open for your future (as I know you know ). Make a bucket of $$ until your partner retires and then go back to school for teaching credentials, maybe?

 

[walkinwood]

You're right to worry about the isolation of being retired. I had to make a concerted effort to get the social interaction I needed.

How does your current spending compare to $65K? Your taxes, health ins. etc, come out of that $65K 'paycheck'. Taxes are pretty low if you're not working - as low as 3 - 5% of our annual expenses.

Counting on dying at 75 is not a good retirement plan - even if men in your family usually die young. You could be the broke exception.

 

[MasterBlaster]

If you are willing to downsize the New York lifestyle it seems as if the money is there.

I would recommend reading Earnie J. Zilinski's book "How to Retire Happy Wild and Free". That book is all about the non financial aspects of retirement and is very good.

http://www.amazon.com/How-Retire-Ha...=sr_1_1?ie=UTF8&s=books&qid=1265245587&sr=1-1

Among other things he shows that a job provides for:

1) A sense of purpose
2) A sense of community
3) Some structure in your life

those three things need to be addressed once you don't have to work anymore

 

[W2R]

Hi, midlifeguy, and welcome to the Early Retirement Forum.

In a sense, I think you answered your own question about being emotionally ready to retire, when you said,

Since quitting my job I have been feeling pretty isolated and miss the solidarity of a workplace.

This is not to say that you couldn't enjoy retirement, but right now if all stays the same then you will probably continue to feel like this in retirement.

Maybe you should go back to work until your partner retires in three years. That's not so long, and you will probably feel less isolated when the two of you are both retired and spending time together. You can share the retirement experience by retiring at the same time, and that can be a lot more fun than retiring while your partner works. And then, as you point out you could keep the teaching idea in the back of your mind, in case you still feel the desire to teach at that time.

What are your plans for health care? It gets a lot more expensive as you get older, so maybe the extra earnings during the next three years would come in handy for insurance premiums at some point.

 

[WM]

I agree that it appears you have enough, but it really comes down to what your expenses are. Have you been keeping track for a while? If you don't know what it costs to maintain your desired lifestyle in retirement, you can't know whether you have enough saved up.

Among other things he shows that a job provides for:

1) A sense of purpose
2) A sense of community
3) Some structure in your life

those three things need to be addressed once you don't have to work anymore

I second the book recommendation. Personally I can think of many ways to meet these needs without going back to full-time work. Have you thought about part-time? Depending on what you did in PR, or what you enjoyed about the work, you may be able to set yourself up for independent contracting on limited jobs. I would say you could also substitute teach, but that's a lot different than full-time teaching so it might not be satisfying in the same way.

Or you might start exploring volunteer opportunities. Unless you're really lucky you won't find the right organization the first time, but non-profits are increasingly moving toward a more business-like model, trying to incorporate for-profit activities into their operations, etc., and there are plenty of good groups who could use professional-level help with PR and marketing.

 

[TooFrugal]

Could you start your own PR firm or do consulting work out of your house? That might be a way to transition out of full time work with a commute every day and still have a high paying career. You might even make more money with your own business than you did previously.

As for how long you will live, personally I do my retirement planning to about age 110. If I did live unusually long I don't want to have to worry about money or have to look for a job when I'm 105. I have a business I enjoy working at and will just keep working at it for as long as I possibly can and keep saving along the way.

 

[Urchina]

As others have said, welcome to the boards!

As others have also said, finding a way to provide some structure for yourself, and finding a way to meet your needs, sounds like your main priority right now. Work might be the right way to do that now. For many of us, it's often the easiest way (because a job brings a lot of built-in social benefits, often.)

Another book to consider is "What Color is your Parachute?" -- don't get the 2010 "revised" edition, which is an abridged version for the job seekers in today's market. Get the full Monty version, at the library or bookstore. There's really good exercises to help with the introspective process, and to help you decide what skills and strengths you want to move forward with. This might help you make the decision about going back to school for teaching, or moving on into the new position.

You could also work for the three years until your partner retires, but try to live on the $65K you think you can draw from your retirement, and see how it goes. During those three years, bank the entirety of your take-home pay. You have a short-term "retirement" experiment, but all the while you'll be adding a hefty lump to your nest egg.

Good luck! And remember, "The moral arc of the universe is long, but it bends toward justice." -- MLK

 

[tryan]

Seems like "hanging-on" for 3 years until the 2 of you can retire makes sense.

Try to negotiate a consulting gig with the new people pursuing you. Would/could allow for some work from home and flexible hours.

 

[Coach]

Teach! We desperately need teachers who are teaching because they love teaching.

Coach

 

[Lusitan]

I cannot get any of his benefits because, well, life isn't always fair.

Tell me about it. How many people in this country, let alone the world, have a portfolio of two million dollars and live in a million dollar house they own outright? Sorry I couldn't resist that one.

The older I get, the more I think about how quickly life passes us by, and how at some point the real goal is to be happy and fulfilled with whatever you do in life. That could be a PR job in NYC if you really get satisfaction from that, it could be teaching, or it could be something else altogether. It sounds like you're financially in a spot where you could do any of that.

If your predictions hold up, your life is more than 50% over, and on balance the percentage of the healthier/active part of your life that is gone is even greater.

What do you want to do with the time you have left?

 

[Texas Proud]

I am in the camp of take the big money... heck, I would jump at a job that made $300K...

The first things is you probably would enjoy the job for awhile... it is a new 'thing' and you will be there learning the people etc... and at a senior level probably making changes that will show up quickly which also could stroke your ego...

And if in a couple to a few years you tire of it... then you are $600K to $900K to the good...

 

[MasterBlaster]

I am in the camp of take the big money... heck, I would jump at a job that made $300K

Keep in mind New York taxes, and New York Cost of living. It is a nice salary but it isn't as much (really) as it seems.

One need divide that number by a factor or 2 (or higher) to see what it would be like in the real world.

 

[Focus]

Another book to consider is "What Color is your Parachute?" -- don't get the 2010 "revised" edition, which is an abridged version for the job seekers in today's market.

As an alternative, I'd recommend getting the more focused "What Color Is Your Parachute? For Retirement." It does a great job of going over the psychological preparation one needs to do before retiring. A new edition is coming out July 13. I just pre-ordered it on Amazon yesterday, in fact.

The other book I think you might find most useful is "Work Less, Live More: The New Way to Retire Early."

I envy (in the nicest way) your financial situation. Sounds like you're in great shape, and that gives you the freedom to choose whatever excites you most. For many, that's the very definition of retirement.

 

[ziggy29]

Sounds like you're in great shape, and that gives you the freedom to choose whatever excites you most. For many, that's the very definition of retirement.

Well, that's the "FI" in FIRE. Though in the OP's case, it may not be complete FI ("financial independence" for those new to the term) as long as there is a dependency on employer health insurance. But having said that, even a "partial FI" where you can do something you enjoy without worrying about paycheck maximization (hope to get there myself some day) is better than no FI at all, where you have to stick with a job that sucks your soul out because you need the largest paycheck possible in order to stay afloat.

 

[MasterBlaster]

For What it's Worth

As an alternative, I'd recommend getting the more focused "What Color Is Your Parachute? For Retirement." It does a great job of going over the psychological preparation one needs to do before retiring. A new edition is coming out July 13. I just pre-ordered it on Amazon yesterday, in fact

I looked this book up on Amazon. It is available used for $1.95 (plus $3.99 shipping)

 

[chris2008]

Another great book on the non-financial aspects of retirement: "Get a life" by Ralph Warner.
I would probably try the new job for a year or two - or till partner retires.
If you do not like the job you can still try go for a teachers career. The other way round would probably not work.
And once your partner retires there might be lots of other options how and where to spend your time together.
I am a bit in a similar situation. DH has the option to retire in 2012 and I will keep on working till then - even though I could retire already now. But I am a safety addict.

All the best!

 

[Texas Proud]

Keep in mind New York taxes, and New York Cost of living. It is a nice salary but it isn't as much (really) as it seems.

One need divide that number by a factor or 2 (or higher) to see what it would be like in the real world.

But he is ALREADY THERE... so unless they both are planning on moving, it still is a good salary...

I was in NY for a couple of years... the mega wanted me to move, but I said I could not afford it unless they doubled my salary.... (they were paying my state and city taxes along with my apartment)... that never happened... so I am back here in Texas...

 

[midlifeguy]

Thanks a lot to all of you who shared your thoughts. I do know that I'm fortunate to have options, especially in this economy. I do think the idea of going "back in" to the industry again for a couple of years is probably the way to go (assuming I actually get offered the job!). It will probably be a lot more palatable knowing that we have a deadline for my partner to retire (2012) and then can haul tail out of this place. There's something about having an end-goal in sight which can give a lot of psychological comfort while you slave away like a jerk all day and all night. The other option I have is staying independent but teaming up with a few old colleagues to start a boutique little PR firm. We've been talking about this for months. I would make little to no money in the first year, but the theory is that I could get a good amount of upside while at the same time having peers and colleagues with a common goal, which would be good for my spirit. So option one is big job with big money. Option two is big job with minimal money at first and a lot of work to create something new. I still think the former sounds like the better option right now given my long-term goals. Let me know if you disagree. And thanks again for all your great thoughts!

 

[Lazarus]

You can retire now if you are satisfied with the lifestyle that you can afford. I am not a big city guy so care nothing about the New York scene or any such. 65K would do it for me.

But if you are not happy with it you should not quit yet. Likely you could not get such a high paying job again.

Also some of the lower cost of living areas might not be attractive to your lifestyle. So you may need to work a while longer.

As others have suggested maybe wait three more years.

 

[kumquat]

I have no idea if you can afford to [-]retire[/-] change careers but if you can, do it. Life is about living on your terms. If you can, do.

BTW, welcome to the forums.

 

[TooFrugal]

I would make little to no money in the first year, but the theory is that I could get a good amount of upside while at the same time having peers and colleagues with a common goal, which would be good for my spirit. So option one is big job with big money. Option two is big job with minimal money at first and a lot of work to create something new. I still think the former sounds like the better option right now given my long-term goals. Let me know if you disagree.

I don't think we can either agree or disagree with what is best for you. Only you really know that. If your time frame is three years than maybe just sticking it out with a job you know pays really well and has benefits may be your best option.

If you want to move away in three years then your heart may not be in starting a building a business in your current location.

 

[CoolChange]

Please post updates for us occasionally.

I am at a similar cross-road in my career; and, it is helpful/comforting/something to see how others are handling this phase. (I am assuming others feel the same or we would not spend so much time on this forum.) I will be posting my own details later once I get a bit of time to myself and overcome my natural lurker tendencies.

Good luck.

 

[midlifeguy]

Thanks again to all of you for the great comments. It's been a few weeks, and I still have no resolution on what I'm doing next, but I am trying not to rush it. I'm still exploring and talking to people.

The big agency gig is still a possibility, but the interview process is going pretty slowly. Other than that, I really haven't pursued any other jobs, which probably should tell me something.

I also went to four high schools (two public, two private) over the past few weeks to observe teachers in action (through friends) and I have to say it was pretty motivating. I didn't run away screaming, and in fact most of the kids seemed really great and many were very eager to learn, especially the Special Ed kids. Most of the teachers actually seemed happy to be there. I also am going to a New York City Teaching Fellows interview on Tuesday. Extremely competitive, but I figured I'll try it. (They put you in a NYC classroom quickly and pay for you to get your Master's over two years). I also spoke with a local university advisor who told me I could go full-time for a Masters in Ed and be done within 18 months, in time for the 2012 fall semester.

The really scary part about this is that I would essentially be giving up my PR/marketing career for a new career where I'm not guaranteed a job or that I will even like it. The classic leap of faith decision. But in addition to being drawn to the field, the lifestyle of teaching seems like a nice way to earn some money without too much craziness (even though I know it's a ton of work) and with plenty of time off and to even get a little pension going for some extra retirement security. It's also a portable career that I could take anywhere after my partner retires (every town needs teachers). Financially, I was thinking that after taxes I would end up making 3k to 4k a month teaching (in this area, anyway, where teachers are paid best) so I could supplement that with a 1.5% or 2% withdrawal on my portfolio, which wouldn't risk depleting it in any way, but would give me an income beyond the typical teacher salary.

Will keep you posted. Thanks for any further ideas.

 

[Focus]

Saw this article in Kiplinger on how to switch careers (it includes a focus on teaching). Thought it might interest you.