Re-Introduction And New Perspectives On Retirement

[cb7010]

Hello All,

I found this site some time ago, posted an introduction and then lost touch with it. I am back, and after reading through many well written and insightful posts and threads, thought this might again be a great place to contribute and bounce a few ideas against.

I just turned 40, am single with a live in GF, and with no kids...and for about the last ten years or so (thanks to YMOYL and the availability of sites like this one) have been introduced and fascinated with the concept of early retirement. At the same time, I have saved and invested diligently and built a next egg that I think is fairly respectable for someone my age who basically started with nothing (net worth appx: $1.8 million); although, I must admit that I have not adhered to as strict a budget that I see from others . I do live in a nice place, eat out somewhat frequently (ok, I am hooked on Groupon!), and travel as much as I can. I always knew that at some point, I would hit a spot where deciding to downsize and reign in some spending would be weighed against continuing to work.

My career (job) is relatively lucrative and affords me some level of autonomy (travel, work from home, etc..) that many others do not; but, it's constantly busy and consuming, and the expectation of continued employment is that you simply keep up the pace and earn your hefty paychecks. There are many evenings and weekends that I find myself sitting with my laptop doing work, and this is not uncommon in my work peer group.

So, with all of that, my goal for several years was to simply accrue enough money to "get out" and according to many models I am probably there now. Over the next several months, I may even have the opportunity to take a severance package equal to around a year of pay. At the same time, it seems my attitudes on work and retirement have changed a bit.

I think my new definition of retirement, is not to having simply stopped working; but, when one no longer works because they need the money. I guess, to me, the concepts of financial independence and retirement are mostly the same thing. I think I will always want to be "working" at or on something that interests me and whether I get paid for it or not is really irrelevent.

That said, now that I am somewhere in the realm of FI, I am beginning to think more about what I might do with my time post corporate world..if I would feel a weight being lifted off my shoulders and be able to engrosss myself in my many interests or if I might actually miss being a part of the action on a daily basis. Every year I continue to engage in "the grind" of my job is another $100K in the bank and now that I have reached many of my financial goals am having a hard time conceiving of pulling the trigger and giving up my salary. It all seemed much simpler years ago when $1 Million seemed a pipedream and if I ever made it there I was going to quit working that day!

How about that for a rambling introduction. I'd love to hear some perspective from any of you that would care to respond and I look forward to making these forums a more regular part of my reading.

Chris.

 

[donheff]

Well, it sounds like you should be in no rush to make a decision. You seem to like many aspects of your job and plan to keep working at something -- at least for a while. Your current job allows you to bank $100K a year - that is a major consideration. The longer you stick with it the more truly FI you will be. $1.8M is a lot of money but it isn't a fortune for someone who wants to stop working at age 40. It covers maybe $60K/yr in real expenses including taxes. If you want to mix travel with those dinners out you will need to be careful. Also, are you clear with your girl friend that no kids are in your future? that is a huge factor.

 

[Nords]

Every year I continue to engage in "the grind" of my job is another $100K in the bank and now that I have reached many of my financial goals am having a hard time conceiving of pulling the trigger and giving up my salary.

Welcome back... if you've already satisfied your analysis with FIRECalc runs then you might want to read about "just one more year" syndrome:
Early Retirement & Financial Independence Community - Search Results
and
http://www.early-retirement.org/forums/f47/faq-archive-how-much-is-enough-30818.html

 

[Meadbh]

At the same time, I have saved and invested diligently and built a next egg that I think is fairly respectable for someone my age who basically started with nothing (net worth appx: $1.8 million); although, I must admit that I have not adhered to as strict a budget that I see from others .

I think my new definition of retirement, is not to having simply stopped working; but, when one no longer works because they need the money. I guess, to me, the concepts of financial independence and retirement are mostly the same thing. I think I will always want to be "working" at or on something that interests me and whether I get paid for it or not is really irrelevent.

That said, now that I am somewhere in the realm of FI, I am beginning to think more about what I might do with my time post corporate world..if I would feel a weight being lifted off my shoulders and be able to engrosss myself in my many interests or if I might actually miss being a part of the action on a daily basis. Every year I continue to engage in "the grind" of my job is another $100K in the bank and now that I have reached many of my financial goals am having a hard time conceiving of pulling the trigger and giving up my salary. It all seemed much simpler years ago when $1 Million seemed a pipedream and if I ever made it there I was going to quit working that day!

Welcome back Chris. As others have said, $1.8m is a great achievement at age 40, but it may not be enough to sustain you for the rest of your life. That extra $100K accumulated is a big advantage to continuing in the accumulation phase for a while, especially since you seem to enjoy what you do. In fact, numerous people including myself have noted that financial independence gives you the ability to better put things in perspective and not to tolerate crap. My sense is that you are not mentally ready to pull the plug. What I would suggest is to take the next year or so to plan a change in your work habits so that you can focus on the aspects and activities in your work that are most meaningful to you. That might mean shifting to part time, stepping down from committees, saying "no" to brutal assignments, limiting your time on the road, etc. It might mean investigating independent consulting. In turn, that would free up some more time for exercise, personal development, travel, etc. I would do financial models for every change you plan. Maybe, rather than ER now, a better solution might be to work part time for another 8-10 years, and saving $50K instead of $100K per annum.

 

[midlifeguy]

Hey there. I had to reply here because you and I are in very similar situations. I also just turned forty, have no kids, and am banking about 120k per year with my current job, which I actually kind of like. I also have liquid assets of about $1.8 million (plus a $1 million house which I own free and clear). I tried "semi-retirement" last year - basically I left my previous job but signed a consulting retainer with the company for half-time - but once the year was up (and the consulting contract was up) I hit a wall. What do I really want to do? Should I go back to work? Should I go back to school? I felt that every day I waited to make a decision, my options were dwindling (which was totally untrue, but mentally that was what I was thinking). I felt lazy sometimes, or would watch people leaving for work in the morning and long to join them. It was pretty difficult emotionally is what I'm trying to say, and I learned that knowing you can retire whenever you feel like it is actually NICER than actually doing it. At least for me and at least for now. Hope that helps.

 

[Danmar]

Congratulations-$1.8 million at 40 is a significant achievement. I think your decision hinges on how much you like or dislike your job. I worked maybe 3-5 years after FI. I found that the job became a real pain quite quickly. By the time I left I really hated it. Your experience could be quite different. Given your savings rate I would stay as long as the job was fun or at least tolerable. Especially since you seem to want to keep yourself fairly busy even if "retired"

 

[Lagniappe]

Congratulations on achieving $1.8M at 40, and on finding a job you seem to like. You didn't mention how much you spend now, or plan to spend post-corporate job. At 46, I plan to spend the next year continuing to work, but living on the amount my nest egg would generate, to see if I really am comfortable with the spending level my portfolio can support. I will stop doing some of the career enhancing work activities (executive sponsorship, committees, etc), sell my second home, and work from home at least 3 days per week to minimize some of the noise I dislike (commute, face time, etc.) In the interim, I can save ten percent more, and gain more comfort with the market direction. It's another spin on "just one more year" that I think would enhance my chances of FIRE success.

That's a very long way of suggesting that you may want to spend the next year adding to your savings while actively planning your exit.