52 - Is it time to ER

[Balance]

I have been a lurker here for a while. Impressed with the members and the content. My user name says it all. I have always been a LBYM person yet my life has been a Bucket list of adventure. I know I have done things few will ever do while I have managed to build up a nice warchest. Have enough to pull the plug but a 1/3 of it was passed down and feel the need to pass the torch in the same way to my kids. My wife and kids, they are my life and simply put, they complete me. My career has been great and I have been fortunate to work with some great people. They say you align yourself with people of comparable character and moral standard and that has been the case for me. So, do I just say 'What the Hay" let's give this ER thing a try, do I jump on the OMY train and question whether to get off at every station stop, or do I just stop agonizing over it and stay on the train, relax and put a couple miles behind me and then get off for good in the promise land.

Not sure whether I am seeking a definitive answer to the question or just opening the door for further dialogue. Either way, time to engage.

Oh by the way, I wrote this while listening to the theme from Friday Night Lights. Might give you a hint as to my past passion.

 

[pb4uski]

Welcome from the shadows Balance.

I think the answer depends on how much you enjoy your work and what makes you happy. Many of us also dialed down to part-time work once we were FI but not ready to pull the trigger. I did for about 5 years and enjoyed the freedom and flexibility it gave me. I'm not sure whether or not a partial schedule is an option for you or not.

I wouldn't feel so obligated to pass on an inheritance - we have already told DD and DS that if there is something left it is estimating error but I concede that we have not yet received our inheritance yet and I expect it will be sizable so once I receive it I may feel differently.

The other thing to think through is if you do pull the plug, what will you do for the next (hopefully) 50 years? What does your DW think? Will she ER as well?

 

[David1961]

From what I read, you seem to already have a good balance in your life. Congratulations as few accomplish this! Just because you have enough is not (in my opinion) a good reason to ER in and of itself. How long have you been considering ER? Are you just having a bad period at work? Are there things you want to accomplish in ER that you are not able to do while working? Consider questions like these.

 

[RAE]

Are there things you want to accomplish in ER that you are not able to do while working?

Assuming you have the financial part worked out, the above question posed by David is really what it comes down to (at least for some of us, including me). In my case, the answer to this question was an emphatic YES!!, so I retired as soon as I was eligible, and I have no regrets whatsoever. Your comment about "giving the ER thing a try" tells me that you are much less certain that you are ready for ER, or that you have thought through exactly how you would be spending your time in retirement (and whether that would make you happier than you are now, or not). So, I'd suggest really thinking those questions through before making such an important decision.

 

[gotRdone]

One way to approach this is to set enough of your assets aside now to grow into "enough" to pass down when your children are in their 50's or 60's. Enough is relative of course, in my case I am targeting to provide some security, but not enough to eliminate the need for them to LBYM and prepare for their own future needs.

If you have enough after the set aside to meet your needs you could FIRE guilt free.

 

[Balance]

You all have good points. While my user name says it all, I have to admit I feel like I lost my balance in the Work/Family area. I am too weighted on the work side and while I enjoy what I do, I don't enjoy it enough to be out of balance. In terms of what I would do if I were to ER, well, I have always been a self starter so I will not sit around (Though a little of that sounds nice right now). Btw, I can certainly spend some quality time with my kids for the next 7 years. Even a bad day with them is better than my best day at work. You can not go back and get those moments. So, it simply comes down to the fact that working will allow me to increase the pot and have some assets to pass along to my kids. Just feel a strong obligation to make that happen. My wife feels that I should semi-retire. She thinks I should just pull the plug on the current gig, take a few months to to sit around , then when my mind is clear I can find a part time deal or do some consulting. Not sure it's that easy but admittedly it's one of those things your never going to know until you try it. Thus, the sorta "give this ER thing a try".

So, let me ask one specific question. What is it really like to not work 60 hours a week and think about work all the rest of time, but to be free to truly smell the roses or at least cut the grass?

 

[pb4uski]

.....So, let me ask one specific question. What is it really like to not work 60 hours a week and think about work all the rest of time, but to be free to truly smell the roses or at least cut the grass?

It is awesome.

 

[RAE]

So, let me ask one specific question. What is it really like to not work 60 hours a week and think about work all the rest of time, but to be free to truly smell the roses or at least cut the grass?

I think you probably know the answer to that question.......it's every bit as good as it sounds, at least for many of us.

With regard to the value of working longer so that you can accumulate more $$ to eventually pass on to the kids - that is something that only you can determine (and it sounds like you've already determined it is quite important to you). In my case, it was not a factor.

 

[MRG]

So, let me ask one specific question. What is it really like to not work 60 hours a week and think about work all the rest of time, but to be free to truly smell the roses or at least cut the grass?

It's heaven, you will have to adjust to enjoy. I've seen too many coworkers let that type of stress cause major life issues. There are many ways to achieve balance, do your diligence and find what works for you.

MRG

 

[Rambler]

So, let me ask one specific question. What is it really like to not work 60 hours a week and think about work all the rest of time, but to be free to truly smell the roses or at least cut the grass?

It is good...most of the time...unless you have a few acres to landscape and a home to rehabilitate. Sometimes it can be like trading one job for a different kind of job. That said, you DO have the freedom to take a day off whenever you want, work at your own pace, etc.

R

 

[bltkmt]

Oh by the way, I wrote this while listening to the theme from Friday Night Lights. Might give you a hint as to my past passion.

TV show or movie? If TV show...God, I loved that show. "Devil Town" is another great song from the show. I watched all five seasons at once last summer on Netflix and really miss it.

Back on topic - I am 50 and have similar concerns as you. Part of me wants to pull the plug and spend more quality time with my wife and sons. But I am worried that I will miss the challenges of the workplace that keep me interested and engaged.

 

[KB]

I retired at 52, 8 years ago. I highly recommend it.

For the first year, I caught up on things around the house and started on my 'bucket list'. The years prior had been very busy as a single parent with 2 kids in high school.

I started taking classes to learn how to do things that I had wanted to learn but never had the time. I had to learn how to relax and just read a book.

Fast forward, I re-developed some old hobbies and learned new ones. Over time I have made a number of changes to my backyard and increased the size of my vegetable garden. I spend more time doing the things that I enjoy and hire out the things that I do not enjoy (house cleaning). I volunteer plenty of time doing something I enjoy also.

You can always volunteer to stay interested and engaged if you decide to stop working.
It is usually the financial situation that drives early retirement; whether a person has enough or not.

 

[Balance]

Well, still lurking but not engaging. I enjoy and appreciate the great posts and advice of others but I know I you need to give to receive and based on the amount of lurking I owe a lot to many of you for the great advice you provide to everyone here.

Ok, now that I got that off my chest. Let me follow-up on where I left off many months ago when I asked what it was like to be retired.

I had a chance recently to dis-engage from work for two weeks. When I say disengage, I really mean that. I am a active person and as DW says, "Do you ever just relax"? So, in that time, I read a novel (Have not done that in 6 years), played sports and exercised everyday, (not a couple times a week when I was working), spent time everyday with my kids (not a couple times a week because I had to catch up on things or work at home) and cleaned the house, laundry, lawn work and fix a few things that needed attention (wife is ) among many other little things. I have to tell you that after those two weeks, I looked at DW and said, this is awesome. The last time I felt like this was the summer before college. Since then I have gone to school, worked summers and then worked full time, back to graduate school and then back to full time for over 34 years. Now, I have the early retirement bug, but in my case it's more like a maddening stomach flu. I am having a hard time re-engaging in work and that might be my demise.

So, here is the quick facts on where I stand:

• House = 350K (no mortgage)
• Taxable accounts = 1.2 million
• Tax deferred accounts = 600K
• Real Estate = 350K
• Passive business income = 20 to 30K annual
• College funds set for both kids at 100K+ each

Average annual expenses last 3 years = 80K (includes Medical)



What say you! Can I do it

 

[REWahoo]

What say you! Can I do it

Have you taken a look at this? http://www.early-retirement.org/for...-answer-before-asking-can-i-retire-69999.html

 

[TallTim]

Thanks for coming back and updating. Much of what you say resonates w/ me and I am sure will with others - I for one appreciate the insight and candor (but I am also new here, so what do I know?)

One thing I am sure you will hear from others here (and it is VERY good advice) is to run your numbers in FIRECALC or any other free modeling/simulating products out there and see if you can make it fit at whatever risk tolerance works for you.

Next, if you haven't read this post:
http://www.early-retirement.org/for...re-asking-can-i-retire-69999.html#post1399715

And talk about it with your DW ... see if you both have answers to all of these and agree (within reason) on them.

Let me add that from your first post at the top, it sounds like you might have a j*b that is portable enough to do part-time or consulting projects. As others have noted on this thread, for many who are perhaps close or over the line in terms of FI, but maybe not fully ready to RE this is a great way to transition for several reasons (provides cash, protects nest egg, allows IRA contribs if you want to, occupies your mind,etc) and also allows you to 'test drive' not working your normal schedule. It also takes some time to put together -- so you can sort of have the best of both worlds by taking time off and starting with those efforts -- and then see how it is.

What's the worst that could happen ? (You could go back to w*ork full time -- blasphemy around here but certainly a first world problem)

 

[Ready]

Hello Balance, and welcome back.

I think it's a bit hard to give you an answer because we don't have quite enough detail to fill in the blanks. You state you have passive business income of $20K-$30K. Is that something you can count on? If so, are you trying to determine if you have enough assets to spend $50K-$60K per year on your expenses? That makes a pretty big difference.

You list your home value at $350K, and then you list real estate on a separate line item. Are you restating the value of your primary residence, or is that an additional real estate investment that you could sell if you had to?

I'm assuming no pension since none was mentioned. Do you know what your social security figures will be? Have you calculated how much they might be lowered if you stop working this year? The SS website has a tool to help you calculate this.

We also don't know how your investments are allocated - equities, bonds, CDs, etc, so it's hard to determine a possible rate of return on your assets.

You state your average expenses over the past three years are $80K. Do you expect them to change at all in retirement? Once the kids are gone? Have you budgeted ACA health care premiums if you no longer have health care through your employer? Does the $80K include reserves for the eventual replacement of cars, repairs to your home, vacation travel to fill up all the free time you will have?

The more you can think all of this through the easier it will be to answer the question of whether you are financially ready to retire.

You should also give thought to how you will spend your free time in retirement. The past two weeks sound great. What else will you do if you are completely freed from all work duties? Will you be spending significantly more time with your spouse? How will that impact the relationship?

 

[NanoSour]

Welcome back Balance. I threw some quick numbers into FIRECalc for you and you look more than all set financially. I made the following assumptions which may be way off:

1) SS for you of 15K/year starting in 2022
2) SS for spouse of 7.5K/year starting in 2024
3) Bernicke spending model as I fully believe we'll spend less as we age.
4) Asked for spending level at 100% success

Result: 116K of spending per year, 97K if you don't use the reduced spending model.

Looks very good from where I sit.

Of course, that's just the financial part of the equation. Given that is taken care of, the emotional part of decision is for sure the elephant in the room. I took the leap 6 months ago and I can tell you no regrets. BTW, you asked what it's like to not think about work all the time? I can say that is the one thing I noticed right away and it was/is awesome. No more work owning my mind 24/7. Can't beat it.

Good luck with your decision.

 

[gauss]

The following generates a non-trivial fraction of your living expenses.
How sustainable is it in the long term?

• Passive business income = 20 to 30K annual

-gauss

 

[Balance]

Thanks to all who have replied. You have me expanding my thought process immensely. TallTim and REWahoo, the referenced post is great and I am using it to dig deeper into my analysis.

Ready, to answer a couple of your questions. The 350K real estate is a commercial investment, but it's not something I can readily sell at anytime. The passive business income is partly from that commercial RE investment and has been there for me consistently for over 20 years, so I can count on it but being conservative I would put it last as to my sources of yearly income as it could fluctuate. There is no pension. I have checked the SS website and best I can tell I would receive almost 95% of the max because of my past income. I forgot to point out that my wife has been a housewife for the last 15 years, has a professional degree and has gone back to work part time mainly because she wanted the mental stimulation. (Yes, I know what you are thinking.) She is making about 20K and could increase that if she went full time, but I have told her that was up to her, so no pressure. In terms of investment allocation, I have been pretty conservative and probably did not get the best returns I could have over the last 10 years but then again, 10 years ago my net worth was a 1/3 of what it is now and most of the growth was derived from my career. I will need to make modifications going forward and which is probably a separate topic, altogether.

Ready, the 80K is my estimate for the next 7 years. Once the kids are gone, I see it coming down a little. That said, it includes 12K for taxes, 20K for all insurance including home (assuming 12K for health based on ACA), 8K for housing related costs, 20k for food, gas, clothing, weekly fun etc. an estimate of 10K per year for capital reserves and maintenance (Roof, HVAC, paint, etc on house, new car every 5 years, etc.) 10K for the kids extracurricular and a nice summer vacation. As the kids move on I intend to keep the 10K for bucket list travel with DW. Finally, I appreciate your comments on what I would do in my spare time and I am doing a lot of soul searching in that area. Number 1 priority in the short term to enjoy my kids before they leave the nest.

Nano sour, (I like that name, btw) I appreciate that effort and am now inspired to play around with Firecalc.

I think I am on the right track in my thought process, but keep the comments and questions coming because it has been very helpful. Thx

 

[Live And Learn]

So, it simply comes down to the fact that working will allow me to increase the pot and have some assets to pass along to my kids.

Ask yourself this question - would they rather have YOU or your money ?

 

[walkinwood]

Regarding your concern about leaving an inheritance. If you plan to retire using a equity/bond portfolio and following some well tested SWR methodology, there is a very good chance that you will leave behind a substantial inheritance. SWR is based on worst case historical scenarios. To get an idea, look at the paths in firecalc.

Regarding your expenses. Are those guesses or have you tracked them for the past few years? I believe that is one of the most important things to do before ER. Tracking your expenses may also modify your spending.

 

[Balance]

Walkinwood, I guess I could call my budget a hybrid. I have very detailed information on past expenses and took those and created a modified budget that adjusts for certain future changes. I believe I can stay within the lines, but that is definately a concern and fear.

 

[Balance]

Btw, something I left out and a little update. DW has a professional degree and has been working part-time as of late. We spoke about the nest egg, budget and ER to which she indicated that she was really enjoying her job (Understand she has been on the sidelines SAHM for over 12 years) and would be fine with increasing her time at work. She also thinks that I should spend more time with the kids as she knows that this is a moment in time and I will not get it back. While I don't believe this is game changer, I do think it opens up more options to consider. One possibility would be for me to step out for the next few years until my youngest hits 16 then re-engage into a part time gig, if necessary.

Side note, engaging in discussions with family and everyone here while analyzing my options has had a short term positive effect on my outlook at work. Weird, but good.

 

[kareninthecity]

I am 53 yo. Worked a very demanding 60 hour/week job for about 7 years. I was mentally and physically exhausted so went part-time about a year and a half ago. I don't regret it at all. I still make good money (I am an RN). If I want to work extra hours, I do. If not, I don't. I have to admit, I never thought I could be part-time at this stage in my life but DH and I planned and saved really well and I feel pretty good about our future. Will I go back full-time in the future? Maybe - but I have a great life right now. I guess what I am trying to say is it took a while not to think about work every waking hour. It was quite odd and it also took a while not to feel that I had to be doing something related to work even when I was at home, but my life now is walking to lunch with friends, experimenting with new recipes for my DH, writing and catching up on my reading, spending more time with my mother. Stopping to smell the roses? It's great!

 

[Walt34]

Side note, engaging in discussions with family and everyone here while analyzing my options has had a short term positive effect on my outlook at work. Weird, but good.

Not so weird, I think. It means you know you're not trapped there, you have options, and that makes all the difference in the world. At least it did for me in my last job.