Retire at 53?! Intro post

[dlgobeavs]

Good morning all -

I've been a member for just a few short days and really enjoyed working my way through all these posts.

My wife and I are considering pulling the rip chord on retirement in about 18 months at age 53. Through some combination of fear (not selling stock), foresight (not selling stock because I could see the rocket ride coming), dumb luck (stock has gone from $40 to $600 in 7 years), fortune... I have been involved with a technology company that has experienced meteoric growth and corresponding stock increase.

We have held on to the vast majority of that stock through the rise, rather than selling shares along the way, which has us in the fortunate position of looking to retire at what seems like an almost incomprehensibly early age. The though of exiting the workforce in what could/(should?) be my biggest earning years, candidly freaks me out a fair amount.

So here we sit ... with an 11 year old daugher... and the prospect of having more time than we know what to do with.

I'm working with a qualified financial consultant, have a solid plan and appear to have plenty of cushion. I've also been loving the peace of mind that the Firecalc tool gives me when I run our numbers using fat spending estimates combined with "constant spending" model, we end up meeting our goals 100% of the time.

I'd love some insight from those that have traveled this road ahead of me on a few topics:

1. Did you look to somehow backfill with a part time job the first few years? We would love to just travel, but with a school aged daughter who is involved with lots of sports... that just isn't an option yet.

2. Am I crazy to give up huge income potential in the prime of my earning years?

3. How did those of you with FIRE plans come to grips with the actual exit?

Thanks in advance for any perspective!!

 

[SecondCor521]

1. I didn't, but some do. You might look into traveling with your daughter - some people think that travel is a good form of education, and remote learning / homeschooling / un-schooling or some combination thereof may be options to consider. Or go over summers and school breaks when she is available. I will add that I thought that just "being around" when my younger two were teenagers was a fantastic thing for all of us. Being there led - I think - to them talking with me more about deeper things than if I had been busier, and led to me being more involved and hopefully more of a positive impact in their lives.

2. Most here would probably say think about it carefully but it's not crazy. At some point you will have enough money and not enough time. For each person it's different, but most people figure out for themselves what that balance is for them. I bet you will too.

3. I'm probably not a good person to answer this question - I started thinking about FIRE in the late 90's and FIREd in 2016, so I was coming to grips with the idea for about 20 years. All I can suggest to you is that you spell out what specifically your issues are with it - is it loss of identity, the impact on your marriage, the financial aspects, the what to do with all your time aspect, or other things? I'm willing to bet that others here have had the same exact issues and can give you advice on those things from a voice of experience.

 

[pb4uski]

1. After I was FI, I worked part-time with my then current employer for a number of years before I quit (I was too young to "retire").

2. I guess it depends on how much money means to you. Once we "had plenty" I came to value time and freedom more than money.

3. Actual exit was fine... I eased my way out over a few months and then enjoyed the freedom of doing what I want with my time.

From what you wrote it sounds like your retirement savings is very concentrated in employer stock... if so, that would be a concern for me... there are lots of high flyers that seemed bulletproof that later crashed and burned and were a financial disaster for employees that had a lot of their wealth tied up in their stock.... think of Enron, WorldCom, etc. At a minimum I would consider buying some protective puts.

 

[dlgobeavs]

From what you wrote it sounds like your retirement savings is very concentrated in employer stock... if so, that would be a concern for me... there are lots of high flyers that seemed buttleproof that later crashed and burned and were a financial disaster for employees that had a lot of their wealth tied up in their stock.... think of Enron, WorldCom, etc. At a minimum I would consider buying some protective puts.

I should have called out the fact that I'm in the process of doing some MAJOR diversification to eliminate that risk. That is the first step in our 18 month exit plan. Thanks for the keen eye.

 

[ivinsfan]

I should have called out the fact that I'm in the process of doing some MAJOR diversification to eliminate that risk. That is the first step in our 18 month exit plan. Thanks for the keen eye.

This above all else....

 

[euro]

I don't at all think you are crazy. Many folks on this site pulled the cord in their fifties (I myself went at 56), so you may be at the earlier end, but by no means massively out of line.
It's highly personal, of course, but I'm very happy I left when I did (probably could have gone a year or two sooner, but still ok). I loved my job and made very substantial compensation, but as someone pointed out above, there comes a point where time is more valuable than money. I pulled the trigger and have never looked back. I love retirement as much (or more) as I loved my job and the transition was a breeze for me.

 

[pjigar]

I haven't FIREd yet but I have been on a glide path since last few years reducing work load and pay. Current plan is FIRE @50. But like you said, the pay is so good that I know I will have a hard time letting it go when the time comes. You need to start looking for things you enjoy and dabble with them sooner rather than later. I see retirement as a runway rather than an on-off switch. YMMV.

 

[l8_apex]

To answer your bullets:
1- I did a year of part time at the end. I didn't enjoy my job and was finishing up my ER plans (i.e. mortgage refinancing of 5 loans - residence and rentals) otherwise I wouldn't even have done that.
2- Figure out how much you need for retirement and ask yourself if you want to work longer to exceed that. I wouldn't do that, but then I didn't enjoy my job.
3- Easy for me, difficult for some. You're just going from saving to spending those retirement funds.

If you don't burn bridges, I'd assume that you could always go back to work at some point in the future, couldn't you? As long as that's the case, your decision to 'retire' isn't some permanent decision that can't ever be changed.

Congrats on reaching the point where you're able to be making these decisions.

 

[Arizona1]

If you’re going to fill your time with a part time job then why bother leaving. Traveling will be a great education for your child. Maybe you can find sports or social events in foreign countries. That could lead to lifelong friendships.
Retiring at 34 I gave up most of my high earning years but I don’t regret it for a minute. You can always get more money but time is limited. Even at 55 now I can see physical limitations on the way. Congratulations for determining you have enough.

 

[disneysteve]

I haven't FIREd yet but regarding #1, I gave notice 2 weeks ago to drop to part time as an interim step now that we have what we need to retire. I'd like to reduce my workload and the stress that comes with it while still earning enough to pay our bills and not have to start spending our nest egg quite yet. I don't care if we can't put much more into savings as long as we can let things grow untouched. Then in about a year, assuming everything stays on track, get out entirely (or possibly stay on as a per diem).

 

[dlgobeavs]

2. I guess it depends on how much money means to you. Once we "had plenty" I came to value time and freedom more than money.

I think this is a really good point. Having the luxury to prioritize time freedom is a good shift in mindset for me.

 

[dlgobeavs]

If you’re going to fill your time with a part time job then why bother leaving.

I think for me, I'm looking at how I really spend my free time - especially during school hours, which will be a reality for us for a good 5+ years until my daughter finished HS.

I've considered looking into doing some teaching at the local college, as a potential interest/distraction.

 

[Starsky]

I retired in 2014 at age 53, no kids. If you can run your conservative numbers and be very comfortable, then you are financially ready to retire. Only you can decide whether you are physically and mentally ready to retire. How much does the extra money mean to you, and how would it change things?

I felt my high-pressure job was very unhealthy for me and was happy to leave. I started working the day after I graduated High School, and I had had enough. We both made good money; owned income properties; and an inheritance took us over the top. One day, I just decided to set a date, and that was it. For me, work was always a means to an end; and the end goal was always financial and personal freedom.

One view - no amount of money can replace a moment of extra quality time you have with your family while you are all together. I think it would be amazing to be free to do what I want while my kids are growing up. And there are no guarantees. I had a heart attack at 55 that would have killed me if I had decided to keep working. Do you have a family history of something? I did, but I never expected it to play out that way [for me and my brother]. Enjoy your freedom, love every day, this is the only life you'll get.

 

[chassis]

@dlgobeavs

Congratulations. I would RE if it was clearly viable, financially. Emotionally it takes some time to come to grips with the next chapter.

It sounds like you have recently started to give serious thought to retiring early. Taking more time to think it through could be to your and your spouse’s benefit.

One calculation of many is to take your net worth (all assets minus all liabilities) and divide by 25. If that number is larger than your pretax annual living expenses, the 4% rule is satisfied and you are good to go for early retirement. That is only one angle on things.

Working, or not, is your choice. Each person has a different calculus for this question.

I’ll be clear - retire early. And give the decision the full consideration it deserves.

 

[SecondCor521]

One calculation of many is to take your net worth (all assets minus all liabilities) and divide by 25. If that number is larger than your pretax annual living expenses, the 4% rule is satisfied and you are good to go for early retirement. That is only one angle on things.

For the purposes of the 4% rule, people normally exclude assets which are not spendable. The largest and typical example of this is a paid off house, which is usually included in net worth but usually not included in the 4% rule calculation.

Also, to be clear, the 4% rule includes all expenses, which includes taxes. It's not clear if you meant that by the phrase "pretax annual living expenses"; I mention it since taxes are sometimes a large expense and it's often confusing to people as to whether or not to include it.

 

[MRG]

I left Megacorp in a hurry when their insanity was competing for my sanity and winning. I'd had 25 great years until the last 4. Then a bunch of neer-do-wells took over the C level management. I had just turned 56 so I don't think you're crazy to leave. Get another job? No I was too burnt-out to think about another job. What will you do all day? There's a thread on that.

 

[Markola]

If you have major doubts that you want to retire despite having the means to, then you probably shouldn’t until you know what you want. It definitely becomes clear at some point, so don’t worry, you’ll know.

Regardless, I would definitely follow through with the plan to diversify away from one stock. You won that particular game, so why keep playing?

 

[Ready]

Give some thought to how you would spend your free time. It sounds like this is as much of a concern to you as the money. Some people love having the free time and fill it in with many different hobbies. But some find it difficult to leave the hectic fast paced life of having a challenging job and wonder what they would do with all their free time. Only you can decide how you will handle the newfound freedom.

I quit full time work at 46 but continued consulting until 50. Now fully retired four years I would never think of going back to work. There is too much to do out there and not enough time to get it all done. Work would just be a major distraction.

 

[travelover]

I retired at 54 and quickly found out that I LOVED not having a schedule. I did volunteer work for a while but hated the schedule and, of course, if you are good they want more of you.

My advice is to take some time and figure out what you really enjoy doing now that you have complete control. There is a whole world beyond w*rk, we just don't have time to see / explore it when we are in the daily grind.

As far as money left on the table, that is always the case but at some point you are working for money you will never spend and trading it for time you will never get back.

 

[RobbieB]

Yeah. When you have enough money, time is more important.

 

[steelyman]

Yeah. When you have enough money, time is more important.

What is “enough money”?

 

[skyking1]

The OP ran his numbers through Firecalc and it was 100% . That is typically enough.

 

[pb4uski]

^^^ 100% success in FIRECalc using conservative assumptions on spending level, etc.

 

[rodi]

I retired at a similar age to what you're proposing (I was 52.5). My son's were 13 and 11 at the time (middle school).

1) I didn't do part time work - but I did worry I needed some structure (turns out I don't) so I took 3 semesters of Italian language at the local community college. It worked out because the CC was next door to their high school - so the school drop off was integrated into my new schedule. But you're right - kids sports (hello high school swim team, plus local rec leagues of baseball and basketball) ate up a lot of time. It was nice to be able to be at every game, and many practices. Couldn't have done that while working.

2) Would more of a nest egg change your lifestyle in a way that makes you happier? Or would having no work obligation change your lifestyle in a way that makes you happier. That is entirely up to you. I retired with less money than many here - but could maintain the same lifestyle as before I retired... No regrets at all.

3) I ran every retirement calculator I could find.

(Best ones for 'what iffing, refining spending plan, I found were: firecalc, fidelity Retirement planner, i-orp, and quicken lifetime plannner. Each brought in elements for me to think about - and make sure my plan was solid.)

I had to convince my husband, but when he saw the various calculator results and my spreadsheet, he agreed I was good. (He'd retired a few months earlier.) I was planning on age 55... but my employer threw me a loop by saying I'd have to travel a full week every 3rd week - starting immediately. I went home, talked it over with the hubby... With kids at an age that a lot of chauffeuring was needed, not to mention entering the dreaded teens... I gave notice the following Monday.

Best of luck to you. I found the FAQ helpful. And I ran my numbers past the membership here - and got some valuable feedback that helped me refine my plan.
https://www.early-retirement.org/forums/f47/some-important-questions-to-answer-before-asking-can-i-retire-69999.html

 

[chassis]

For the purposes of the 4% rule, people normally exclude assets which are not spendable. The largest and typical example of this is a paid off house, which is usually included in net worth but usually not included in the 4% rule calculation.

Also, to be clear, the 4% rule includes all expenses, which includes taxes. It's not clear if you meant that by the phrase "pretax annual living expenses"; I mention it since taxes are sometimes a large expense and it's often confusing to people as to whether or not to include it.

A fudge factor is being used if one does not include all assets and all liabilities when calculating net worth. You wouldn't walk away from your primary dwelling would you? And let the neighbor's kids take possession of it for nothing? I wouldn't. The bank wouldn't let you walk away from their mortgage, either. All RE is on the balance sheet at market value less mortgage principle, in my book.

There is a vein of posters on this site who put fudge factor on top of safety factor on top of extra safety factor when calculating the 4% equation. I call it dithering. I suggest to strip the calculation bare of fudge factors, account for all assets and all liabilities, and make a decision on whether or not to retire.

I may have chosen words poorly by using "pretax". I mean living expenses grossed up for taxes. So we agree on this point.