Introduction and a Question

Hi,

I have been reading these boards anonymously for the last couple of years. What is prompting be to introduce myself is that I am in a bit of a dilemma and need a reality check. My husband suspects he is about to pushed into a high stress, long hours position. He doubts very strongly that he will have the option to say no to the new position without being released.

Our situation is as follows -

47 (DH)/49 (Me)

Current savings 2.4M (60/40)

75K budget including taxes, but would like a 25K buffer, so 100K including taxes is the target. The 75K budget is very comprehensive and well tested, so I do not expect to be surprised as far as expenses go. 500K house fully paid off (should fund final care for whichever one of us is the last one to go).

I will continue to work until 54 (5 more years). Saving approx 50K per year. Once I retire, the 25K buffer will start being used towards heath care expenses (we have a 10K medical line item in the 75K budget, so the extra 25K should not be needed most years).

Social Security at 70, should be approx 32K each, so even if we only got 75% of that amount, we would be in good shape.

No other pensions.

Firecalc is showing 100% without social security, but only with me continuing to work for 5 more years. I am totally on-board with that and my employment is about as guaranteed as it can get. Still, it does make my husband a bit nervous.

So, the question is: in your opinion, are my husband and I in a position where he can decline the new position and let the chips fall where they may? He works remotely and given our location, it would be close to impossible for him to find a job with similar compensation.

Thanks!

naturegirl said:

So, the question is: in your opinion, are my husband and I in a position where he can decline the new position and let the chips fall where they may? He works remotely and given our location, it would be close to impossible for him to find a job with similar compensation.

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A couple of follow-on questions:

Are you - and he - sure you would both comfortable with him being a 'kept man' until you hang it up?

Have you been through this list? http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

How important is the 100k income vs. his desire to say no to the new position? That is, how willing are both of you to trim the retirement budget to allow that freedom?

A story: A guy I know from my last job in his first week as a police officer got a call for a car idling at the curb for several hours. He discovered a man in the front seat, dead, with his face planted in his retirement cake.

I would think most people would be willing to trim their budgets a bit to avoid that outcome.

Hi REWahoo,

Yes, we have had the "kept man" discussion. He says he thinks he is okay with the idea. If it turns out he is not, he says he will either volunteer or find a less stressful occupation. Personally, I think he will do fine. He is always puttering away at something! I am also sure I won't have any issues with him being "kept" as long as he "keeps" out of my office during business hours!

Btw, the original plan was for him to work for 2 more years and then we would have a 3 year dry run to make sure the budget was as accurate as we could get it.

We have been through the list a few times over the years and are very comfortable with our answers. Thanks for the reminder though!

Hi Walt34,

Having the 100K before he pulls the plug is not a deal breaker, but both of us pulling the plug without the buffer would require some serious thought. We are still relatively young, so having some wiggle room in case of unforeseen higher expenses later in life is something we both feel strongly about.

I would have him decline the offer (and let him go) rather than just quitting. He will qualify for unemployment and might get some severance that way.

I strongly encouraged my husband to pull the plug and retire this past January. Unfortunately, it didn't fully "stick". He's back to working part time for his old employer. I joke that he flunked retirement. But he has clear boundaries with them - and is more in a position of doing them a favor, so they're extra nice to him. (His replacement quit without warning and he had to pick up the pieces.)

Financially, you seem fine. Especially with you continuing to work and fund your spending for several more years.

A couple things.

First, it seems odd that an organization would think highly enough of someone to ask them to fulfill a different more challenging position but not highly enough to keep them if they decide the new offered position is not their cup of tea so perhaps they can work something out that they can both live with. Good, dependable people are hard to find!

Second, if the $75k budget is comprehensive and well tested, then a $25k provision for adverse deviation (33%) seems excessive.

How much have you provided for taxes? Much lower taxes is a pleasant surprise in RE for many of us. Also, do you have health insurance/health care covered off in your $75k?

100k budget for 2 people? Either you live in a very high COL area or you have rather exotic tastes. I would say you are very generously funded for retirement. I don't understand what you are worried about, in fact.

I like your 75k budget end extra 25k plan. Should make for a great retirement for a long time.

I would not take a stressful position at this point but then again there really is no stress when you can be done anytime you want.


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Hi pb4uski,

I don't really understand the "up or out" philosophy either.

We have 11K for taxes (state + fed), 5K property, 10K for medical. The 10K is for premiums and basic health care expenses. The 25K is there for items that might grow faster than inflation or in case one (or both) of us ends up with an expensive chronic condition.

Perhaps the 25K is excessive, but we most likely will not know that until we are too old to go back to the well for more money

RetireAge50 said:

...really is no stress when you can be done anytime you want.

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That is an important point. Many people have commented that simply knowing that they can pull the plug anytime they want makes a lot of the stress go away. And they don't have to put up with a lot of BS because they have the freedom to "just say no" and if that's a problem for the employer they can just say "I quit".

Good point Walt. OP's DH could always take the new position knowing that if the stress/hours gets too high/much he can just walk out the door at anytime of his choosing. I found being FI while still working very good - I could speak up on issues (civilly and respectfully of course) and while many times I thought my ideas would not be appreciated, in many cases the opposite was true and they welcomed my candor/irreverence - I suspect because in many cases others were thinking the same thing but didn't have the balls/freedom to say so. He could always give it a try - seems like nothing to lose if he is sure he would be let go anyway.

naturegirl said:

...We have 11K for taxes (state + fed)...

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Are those based on a pro forma return as if you were both ER? Seems a bit high unless most of your retirement income will be taxable (ie: pensions or 72t).

Our ER funds come from taxable accounts (we are both under 59 1/2) so out taxes would be zero other than we do some discretionary Roth conversions. I suggest that you try doing a tax return using Income Tax Calculator - Tax-Rates.org as if DH stopped working to get a refined number unless you have already done so.

Hi pb4uski,

We will use that calculator and see what we find. The 11K amount was based on all the income being taxable (which would not be the case until later in retirement).

Thanks!

naturegirl said:

We will use that calculator and see what we find. The 11K amount was based on all the income being taxable (which would not be the case until later in retirement).

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We made the same mistake with respect to taxes and retirement planning, naturegirl. After giving away about 25% per year to the Feds for 30 years, it's easy to do. Make sure you know the difference between marginal and average tax rates as well. Good luck!

brewer12345 said:

100k budget for 2 people? Either you live in a very high COL area or you have rather exotic tastes. I would say you are very generously funded for retirement. I don't understand what you are worried about, in fact.

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+1 And congratulations to the OP!

Plan for age 90...

Current $2,400,000.
SS @ age 70 ... $30K/yr for 20 yrs. each = $1,200,000
Total $3,600,000million...

$3.6 million divided by 42 years (from now) = $86K/year.

And... you get to keep your house.

Simple! Why wait?

imoldernu said:

Plan for age 90...

Current $2,400,000.
SS @ age 70 ... $30K/yr for 20 yrs. each = $1,200,000
Total $3,600,000million...

$3.6 million divided by 42 years (from now) = $86K/year.

And... you get to keep your house.

Simple! Why wait?

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imoldernu,
Your experience as an early retiree is so great to have on this site. I like your calculation. As an old engineer, I appreciate those who can take something complicated and model it simply.

naturegirl said:

Hi,

My husband suspects he is about to pushed into a high stress, long hours position. He doubts very strongly that he will have the option to say no to the new position without being released.

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T think his response should be:

One comment I would make, I don't think it has been mentioned before, have you considered what you would do if you were to loose your job in the next 5 years? (I am knocking on wood here) just thinking that is something you should run through. If it was me, only thing that would keep me or DW in the game was if we liked the job or the people we work with or something like that. I would suggest you are FI at this point. Do what makes you happy