Afraid to Retire

[CherylGrrl]

I'm 59 and had always had the objective to retire at 55 from my early 20s when I started contributing to my 401(k). I have a substantial portfolio from my years of saving plus some lucky stock awards from the go-go years in Silicon Valley. My husband is 58 and retired the day he turned 55. He has a meager Federal pension but it does come with good health insurance at current-employee rates of about $250/month for both of us. We own our home, a sailboat, and a travel trailer.

We love to travel and spend about 1/3 of the time on the road, either camping or doing major cruises or international trips. I have a half-time job with a technology company that I can do from home or the road, anywhere there's an Internet and phone connection that pays about $80,000 a year. I've actually worked part-time for the last 15 years, with incomes ranging from $5,000 to $180,000 but this is dependable. This darn job I have now, which isn't really that tough, seems too good to let go of during these uncertain times. I keep having my financial advisor run projections, and I have tried many financial calculators that tell me things look pretty good, but I find that things are so strange economically and politically today that I worry I will be sorry if I give up this job as it allows us to live without tapping into the portfolio at all.

I feel guilty whining about anything -- I know I'm very lucky -- but I find that I'm constantly worrying about work issues and am jealous of my husband's freedom from work stress. I'm trying to find the courage to cut the cord and quit forever, but I just can't seem to do it.

Anyway, I found this forum today and I thought it might help me to see what others are thinking and doing...

 

[Gumby]

Welcome, CherylGrrl. You have what is referred to as a "first world problem" -- but you already knew that. I'm entirely unqualified to answer the "just one more year" question, but there are many others here who can shed some light on that issue. Again, welcome aboard.

 

[martyp]

Welcome. I retired at 55 and my DW is still working and also experiencing "one more year" syndrome. She worries she will have unknown support costs for her 83 yr old mother. She is the important techie in her office and I also think she worries about her self identity as a retired person if she leaves the job where she is wanted and respected. However, just about every day, I listen to her complain about her boss but I can't really tell how unhappy she is. She likes that I'm retired because I do all the housekeeping and cooking (also I'm a great cook). All I can say is that the decision is partly your job pushing you to get out and partly the retired life that pulls you out of the job. You will have to work it out in your head yourself. No one can do it for you.

 

[traineeinvestor]

Welcome.

It's natural enough to feel some apprehension about letting go of a job that pays well and gives you fantastic flexibility.

Even though I had "enough" I fell victim to "[-]one[/-] two more years syndome" and justified it on the basis that I wanted more than we needed for peace of mind (and not because we wanted to spend more money). Once I left, I never wanted to worry about choosing between looking for a j#b and cutting out lifestyle when I am older. Now that the deed is done, I am very happy to be moving on.

On the other hand, DW likes her part time job and wants to carry on. She just enjoys what she does (and likes a bit of extra income).

 

[temco_rep]

Hi Cheryl,
Just curious, without typing your company name, what kind of work do you do? I've been in retail/mgr for many years and a change like yours sounds interesting. Possible for a 50 yr old to learn new tricks?

Thanks,
Tom

 

[CherylGrrl]

Just curious, without typing your company name, what kind of work do you do? I've been in retail/mgr for many years and a change like yours sounds interesting. Possible for a 50 yr old to learn new tricks?

While I think there's always a chance for motivated people to learn new tricks (I've switched career tracks 3 or 4 times in a major way), the kind of business development position I have in a small technology company would require previous experience. I negotiate technology licensing deals.

Although I desperately want to retire, I must admit that there's a small part of me reluctant to part with (most likely) the last job I will ever have. While I don't define myself with my work, it has been a big part of my life and I do think I'll face an adjustment in terms of self-image.

 

[jimnjana]

I say if you enjoy it, keep it. If it gets in your way, get rid of it. Sounds like you are virtually retired now.

 

[daylatedollarshort]

While I think there's always a chance for motivated people to learn new tricks (I've switched career tracks 3 or 4 times in a major way), the kind of business development position I have in a small technology company would require previous experience. I negotiate technology licensing deals.

Although I desperately want to retire, I must admit that there's a small part of me reluctant to part with (most likely) the last job I will ever have. While I don't define myself with my work, it has been a big part of my life and I do think I'll face an adjustment in terms of self-image.

There is no right answer, but if it were me I would keep the job. Having some work to do makes free time all the more interesting. I have had to think about keeping our hobby businesses going and I decided to not sell and just keep them going for as long as I can. They also are a nice income for not so much work and that would be very hard to replace once gone.

 

[Meadbh]

You don't sound ready to leave. Your job allows you to work from anywhere, which is a huge bonus that allows you to travel. My suggestion would be to hang onto the job until you wake up one day and really "know" that you really don't want to do this anymore.

 

[ERhoosier]

You don't sound ready to leave. Your job allows you to work from anywhere, which is a huge bonus that allows you to travel. My suggestion would be to hang onto the job until you wake up one day and really "know" that you really don't want to do this anymore.

+1

If you enjoy your current part-time jig (even for "self-image"), it doesn't interfere too much with your travels, & you worry about uncertainty of the future.....why rock the boat? Keep on with it until you "know" its time to move on.

 

[pb4uski]

I worked part-time for the last 5 years prior to retiring and had a great gig. Great pay, great people to work with, good clients, great job. The only bad part of the job was that I was "on-call" almost all the time since response time to client needs was very important to our business.

What made the difference for me was that I decided that we had more than enough financially and that I wanted my time for myself.

I guess my timing was good in that I have been ER for 21 months and our nestegg is 19% higher today that it was when I retired.

 

[Rena]

I am also 59 and just withing the last 2 weeks started the retirement process by talking with my boss. My husband has been retired for 3 years with some occasional contract work for a month or two at a time. I have been back and forth with my own retirement decision for the last couple of years. For me, the decision finally came when I just could not take it ( the job, the work enviornment etc. ) anymore and I had had enough. We are not wealthy by some peoples standards but we have more than enough and I know that is different for all of us.

 

[2B]

This darn job I have now, which isn't really that tough, seems too good to let go of during these uncertain times. I keep having my financial advisor run projections, and I have tried many financial calculators that tell me things look pretty good, but I find that things are so strange economically and politically today that I worry I will be sorry if I give up this job as it allows us to live without tapping into the portfolio at all.

Welcome to my world all except for the financial advisor part. I will start off suggesting you use this forum to increase your knowledge of financial matters and take over as your own FA. Of course, your DH should be educated along with you and be on board with the path forward. It will greatly increase your available spending. I suspect you are paying your FA 1+% for the privelege of putting you in high cost managed mutual funds. You could easily find your spending could easily be increased by 20 to 30%.

I declared myself FI around 2006 after I lost my mega-corp senior manager position. I like to describe it as "I thought I was important but they showed me how important I really was." I lost the position around 2003 (how we forget) and unsuccessfully looked for comparable positions for almost two years. I sunk to a professional low by working as a NASA contractor for two years (3 days of actual work per month but lots of time to surf the internet) which provided very low pay but let me purge myself of the feeling of failure from being heaved out of mega-corp. I lurked here for over a year before my first post. I realized we were FI based on a basic budget that would be comfortable but not leave a lot of room for luxuries. About the same time, I took a very well paying position. I have no stress compared to mega-corp, tasks were interesting and everything has been pretty pleasant. I just have to show up every day and my pay safely exceeds my old mega-corp position.

Our retirement budget based on current assets would put me into what I would classify as a "luxury lifestyle." We have our paid for house, comfortable living expenses covered and enough left over for extensive traveling. I'm not sure why I'm still doing this except to build additional "safety" but "safety" is really an illusion when faced with the real potential disasters.

It's a difficult break for those of us who have lived below our means and are making a significant, easy salary. One day I'll decide to leave. So will you. Don't overwork the anguish.

 

[CherylGrrl]

I worked part-time for the last 5 years prior to retiring and had a great gig. Great pay, great people to work with, good clients, great job. The only bad part of the job was that I was "on-call" almost all the time since response time to client needs was very important to our business.

What made the difference for me was that I decided that we had more than enough financially and that I wanted my time for myself.

You hit the nail on the head! I'm also in a position where I have to work my schedule around client and potential client needs -- and when I'm camping in a national park wanting to take a hike but have an 8 am call, an 11 am call, and a 2 pm call I find that I might as well be working full time! The company is small, so everyone needs to pitch in when opportunity knocks. And we seldom have face-to-face meetings, but when we do the CEO usually changes the date 3 or 4 times, and expects that I'll jump on a plane from wherever I am and be there. So I'm constantly making small concessions that add up to a growing feeling that I'm missing what I worked so hard for over the last 37 years.

I'm at that stage where I should be comfortable cutting the cord, but I grew up poor -- dad died when I was young, mother and I lived on social security survivor benefits. There's a part of me that remembers being poor and never wants to go back. As long as I'm working this halftime job, I'm safe and the nestegg is protected. (Well, as long as the economy doesn't totally melt down but there's no point in worrying about that.) Once I quite, that's it. I'm working for someone I worked for years ago at Mega Corp (I think you folks call it) who knows what I can do. I could certainly not ever find as good a part-time, virtual position again since I am not based in Silicon Valley. So that's making me very cautious. Still, I feel like these are the best years I have to be actively traveling, hiking, skiing, sailing, etc. and don't want to be sitting on a big pile of money at 85!

 

[CherylGrrl]

Welcome to my world all except for the financial advisor part. I will start off suggesting you use this forum to increase your knowledge of financial matters and take over as your own FA. Of course, your DH should be educated along with you and be on board with the path forward. It will greatly increase your available spending. I suspect you are paying your FA 1+% for the privelege of putting you in high cost managed mutual funds. You could easily find your spending could easily be increased by 20 to 30%.

Our retirement budget based on current assets would put me into what I would classify as a "luxury lifestyle." We have our paid for house, comfortable living expenses covered and enough left over for extensive traveling. I'm not sure why I'm still doing this except to build additional "safety" but "safety" is really an illusion when faced with the real potential disasters.

It's a difficult break for those of us who have lived below our means and are making a significant, easy salary. One day I'll decide to leave. So will you. Don't overwork the anguish.

It's interesting to see that most people on this forum self-direct their investments and actively discourage others from using financial advisors. Maybe I'm just lucky, but when I was 25 and in my first well paying job my boss referred me to the person who did her taxes. This lady was just a few years older, and we hit it off. Over the years she turned into a financial advisor and, yes, she takes 1% off the top for portfolio management and tax work. But over 34 years of our relationship, she has helped me put together a portfolio of $2.5M. We started with one step: pay off my credit card debt. Then step two: max out my 401(k). She taught me the lessons that most people did not learn and I am completely confident that I would not have done this on my own. In fact, one year I said "I'd like to make some investments myself" and she suggested I take $2,000 and put it in E-trade. Guess what... yep, I lost the whole $2,000 in about 3 months! I understand my investments, which are diversified and conservative, yet I have no interest in managing my portfolio actively as the years go by.

My advisor is now at the stage where she knows she needs to turn over her clients to someone younger who can shepherd us... she spent 2 years interviewing over 40 firms and finally selected one to merge with. I'm very happy with her choice, and she recommended one person in the new firm who she thought I would "click" with. It's working out, but my old advisor is still participating in my planning and says she will always be available as a friend whenever I need her opinion. I think of her as the sister I never had. I have the feeling that most people don't have this kind of relationship with their financial advisors!

 

[daylatedollarshort]

1% of 2.5M = 25K a year X 30 years of retirement = $500K before taxes.

If you are taking home 60% of your $80K pay after SS, state and federal income taxes, your take home is $48K a year.

$500K / $48k = 10.41 years of work.

If you learned how to act as your own investment adviser instead of working your current job, you might break even financially by not having to work an extra 10.41 years.

 

[CherylGrrl]

If you learned how to act as your own investment adviser instead of working your current job, you might break even financially by not having to work an extra 10.41 years.

But I'd have to spend more than 20 hours a week at it knowing my talent for things like this, and it would be worse than my current job! No, I'm afraid that's just not going to happen.

The real point is, I own my home and all the toys I need, so do I really need to wait to tap into the savings? Between my current income and my husband's pension, we have plenty of money for what we want to do. And I believe that with $2.5M invested I could easily generate $80K/year to replace my earnings. Probably quite a bit more. So I'm not really sure why I'm still working...

Just found an excellent older thread, Handling the "just one more year..." syndrome. Great food for thought. Also found the Class of 2014 thread. Thinking about joining. If I wait until I have some income in 2014, at least I could salvage the business writeoffs for the year!

 

[REWahoo]

But I'd have to spend more than 20 hours a week at it knowing my talent for things like this, and it would be worse than my current job!

Don't buy the "you wouldn't do your own appendectomy, would you?" scare tactic from the financial industry.

You vastly overestimate the time needed to master DIY investing. And once you do get a handle on it (and discover it isn't rocket science), the time to manage your investments goes to near zero. I sometimes go months without doing more than occasionally glancing at the numbers.

That said, it sounds like you have a good financial advisor and are happy paying her half a million dollars to manage your portfolio. If you are aware of the numbers and remain happy with the value you are receiving, that's what counts.

 

[daylatedollarshort]

But I'd have to spend more than 20 hours a week at it knowing my talent for things like this, and it would be worse than my current job! No, I'm afraid that's just not going to happen.

Then at least consider hiring a pay by the hour planner. For a half million dollars you could hire someone making $100K a year full time for five years to show you the ropes.

I doubt anyone here spends 20 hours a week on their portfolios. Once you get a basic portfolio in place there isn't much more to do day to day or even week to week, unless you are day trading, and few people here would recommend that type of investing.

 

[CherylGrrl]

Don't buy the "you wouldn't do your own appendectomy, would you?" scare tactic from the financial industry.

Nobody is trying to scare me! I've had a very successful relationship with a financial planner for 34 years and I am extremely happy with the results. I'm really not looking for advice on how to reduce my current level of expenses in order to be able to afford retirement... What I'm struggling with is more that "next year syndrome", I don't think it's really about having enough money.

While I appreciate all the advice about self-directed investment, it's just not for me.

 

[daylatedollarshort]

Nobody is trying to scare me! I've had a very successful relationship with a financial planner for 34 years and I am extremely happy with the results. I'm really not looking for advice on how to reduce my current level of expenses in order to be able to afford retirement... What I'm struggling with is more that "next year syndrome", I don't think it's really about having enough money.

While I appreciate all the advice about self-directed investment, it's just not for me.

Your choice. All we can do is point out your options. But it sounds like your financial adviser is not worried about being able to quit her job and retire....Just sayin'.

 

[REWahoo]

What I'm struggling with is more that "next year syndrome", I don't think it's really about having enough money.

Correct.

I've been around this forum long enough to know defeating the OMY syndrome isn't something I can offer much help with. My experience is the only cure comes from within, and some people find it and others don't. Like DIY investing (I know, you aren't interested) it takes a bit of courage and self-confidence to pull the plug.

Good luck to you in your effort to get where you want to be.

 

[2B]

I'll recommend you read Millionaire Teacher by Andrew Hallam. I gave a copy to my wife and she feels totally on board. It's about $11 on Amazon. You've already learned the Chapter 9 lesson.

With index funds at Vanguard (there are other choices), you should be able to spend less than an hour per year to rebalance your investments and set up your spending account for the coming year.

You are paying not only your FA's 1% but I'm willing to bet she has you in funds with mangement fees between 1 and 2%.

I know I'm not going to convince you but I hope to get you thinking about it. Now that she's retiring, you can get with her if you really feel lost.

 

[Bestwifeever]

But I'd have to spend more than 20 hours a week at it knowing my talent for things like this, and it would be worse than my current job! No, I'm afraid that's just not going to happen.....

Geez, 20+ hours a week? What does she have you invested in that would require that much work? I do maybe 20 seconds a day checking our balances at Vanguard.com, so around 2 minutes a week, but then I am not paying myself 1% for that (I am usually on the side of people who like their FAs but really, $25k a year has to come out to quite a hefty hourly rate for the actual time your FA is putting in on your account).

 

[daylatedollarshort]

For $500K adviser fees, plus maybe another $500K - $1M in load funds fees, at least consider just talking to a few paid by the hour advisers.

You don't have to go it totally alone. I have a pension consultant, an adviser at Fidelity, a firm with EAs and CPAs for taxes and an estate attorney. But they all get paid hourly, except the person at Fidelity is no extra cost besides whatever they make from fees like the regular mutual fund charges.

Fidelity has a very good retirement calculator on their web site and they went over all the results with as one of the services for having our money invested there.