Will you stay 5 more years for $1,000,000?

[honobob]

The plan now is to stay a little over three months into the next year to sock away $20K into deferred comp. Why would anyone retire before they max out a calendar year deferral of income?

But, I've been thinking. If I stay for 5 more years I'll add about $100K a year in salary and the increased pension (cola'd) would be in excess of $500K over a 30 year period. I don't "hate" my job but I'm not crazy about being on someone elses time. I don't need the money but I would probably increase my net worth by 50% in 5 years. Thirty years to $X, 5 more years to $1.5X. Age 60 retirement! I would easily give the years 50-55 for a million but I do see the increased value of each year. Will I regret walking away from $1,000,000 five years from now?

 

[Khan]

No.

But then, the stress was killing me.

 

[dmpi]

Its close but I think I would stay 5 more years for 1M (after taxes). However I'm not sure you did the math right.
If you make 100K, you don't get to take home 100K. Also you need to compute the delta with you pension you would be getting if you retired. Your computation about forcasted future pensions are in future dollars. Bring that into todays dollars and I think you'll find that its eaiser to quit than go on.

 

[crazy connie]

Time vs. Money... Sounds so simple but do the math. Equate the goals for retiring vs. the monetary enrichment. If the goal is to leave more in built up wealth for Uncle Sam... Your choice. Also, consider what you can do between 55-60 that you may not be able to do after 60.

 

[Patrick]

Don't forget to deduct the pension that you forfeited for those 5 years.

 

[brewer12345]

Is it the second million or the tenth?

 

[Texas Proud]

With my finances etc.... YES...

But, as someone else pointed out, if it was your 10th million, then no..

OR, if I had to work 70 or more hours a week, then no...

Well, truth be told, if I had to work more than 50 hours a week.... no..

 

[Andre1969]

Well if I'm doing my algebra right, if x+1million = 1.5x, then you already have $2million saved up? For me, I guess the biggest variables would be how much I really valued the money, and if I could fairly realistically make a prediction on my future health. Personally, if I had $2M and was at the age of 55, I'd stop right then and there!

Right now, my goal is to retire at the age of 46, with at least $1M and no mortgage. In that case I think I'd be willing to put in 5 more years for a guaranteed $1M more. As long as it was a job that was draining the will to live out of me!

 

[savedapile]

What would you use the extra money for?

If it was to buy more crap to stuff in my house, or clothes or eat sub-par meals in restaurants, then I would say no way.

I would consider it if I was to buy real estate where my family could gather or for an investment for my kids..........Nah, changed my mind.

 

[Goonie]

NOPE!!! I have enough in investments and will get enough pension (w/ cola) to live a very comfortable lifestyle. My goal was to RE a.s.a.p. I reach that goal 1st week of April '07.

And besides...what the heck would I do with an extra $1M?? :

My aunt decided to stay a few extra years.....she planned on FINALLY retiring on the 29th of this month....she passed away Monday. (she should have retired earlier....didn't really need the extra cash)

 

[Nords]

The plan now is to stay a little over three months into the next year to sock away $20K into deferred comp. Why would anyone retire before they max out a calendar year deferral of income?

Because their SWR was already low enough for their situation and they had other things they wanted to do. What do you want to do-- make more money or live your life? Can both be done at the same time? Maybe, maybe not. The answer is unique for each individual.

I don't need the money but I would probably increase my net worth by 50% in 5 years.

What's the sense of raising your net worth if you don't need it? Either you've already won the game and you're just running up the fourth-quarter score, or else you're not sure that you might possibly need the money anyway. It's easy to stay five more years without thinking about it. The much harder task is figuring out why you're attracted to money that you don't need.

Will I regret walking away from $1,000,000 five years from now?

Last April spouse passed her five-year anniversary of walking away from $750K. She doesn't miss it a bit. She's also had several opportunities to replace it, something we didn't expect when she made the decision.

You probably won't either miss it either, you'll have more opportunities to replace it too, and I'm not sure the risk to your health is worth chasing more lucre...

When I retired (and gained the time to look around me) I noticed that money-making opportunities are everywhere. It's like sweeping $20 bills off the sidewalk-- people are happy to pay for what seems like a ridiculously low level of skill & service. Your reflexes kick in and you're grabbing for a broom.

Then you realize that your ER portfolio already has an engineer's safety margin built into it and that your spending has dropped a lot more than you expected. The new activities that you're enjoying don't cost a lot of money and your portfolio's growing itself. For the first time in your life you don't have to optimize your income-earning skills-- you can optimize your life!

The real retirement challenge isn't found in making more money, it's found in pursuing interests for which you "haven't had the time". It's time for reducing your stress level. And for reconnecting with your family. And for getting healthier.

Here's another approach for the "glass is half-empty" perspective. Think about the worst day you typically have in a week or a month. If you work for five more years, are you willing to put up with another 300 or 60 of those workdays? It's easy to work forever when it's good. When it's bad, that's a tough time to be in the early days of a five-year commitment...

 

[MasterBlaster]

Nords:

You make some good points.

Regarding working longer for more stash. Well as others have pointed out you obviously haven't hit "The Number" yet. That's the number at which you could purchase the lifestyle that you want and more money doesn't really get you any incremental value.

regarding stressful jobs, well since I hit my number my job is very low stress. I could see working for another 5 years but if they give me too much corporate nonesense then I'll just make a U-turn. My stress load was all in my head. When you stop reaching for the brass ring it really is amazing how the ole' stress level comes down.

Regarding doing what you want. Will someone please tell me what I want ! If I could answer that I'd be way ahead of the game. I pretty much have everything that I want right now. So lfe is good whether I keep working or not.

 

[Dawg52]

Will I regret walking away from $1,000,000 five years from now?

Hard to say. If you feel like you did not enjoy or accomplish much during that 5 year period, you might regret it. But as Goonie alluded to, you may not have to worry about it. You may be dead by then.

 

[Nords]

Regarding doing what you want. Will someone please tell me what I want ! If I could answer that I'd be way ahead of the game. I pretty much have everything that I want right now. So lfe is good whether I keep working or not.

I'm going to have to add "life choices coach" to my list of occupations that sweep up $20 bills.

The problem with figuring out what you want is that you're trying to figure it out while you're working. It's like the old joke of having hourly meetings to determine why the work isn't getting done. (OK, for some of you that's not a joke, but that's an entirely different post.) The only way to figure out what you want to do with the rest of your life is to go through that process while you're not distracted with work.

I'm a big believer in the time-tested tradition of a sabbatical. I think a month is the minimum and three months is probably better. The first two-three weeks is spent in detox-- detaching from workplace crises & gossip, catching up on sleep, enjoying long walks & regular exercise, and generally slowing down from the workplacepace. Reconnecting with family is a good idea. Bad ideas include the typical hectic family vacation, repainting the house, cleaning the garage, or writing the Great American Novel. There should be plenty of boring free time to read, think, and discuss.

By the end of the first month the fog will begin to clear and people will begin to realize that the workplace really isn't the center of the universe. "Important crises" will recede to silly stories. "Busyness" becomes easy to detect. Every day you'll have started to find new things that you want to be doing, whether it's just exercise or reorganizing your life or pursuing a long-forgotten interest.

The key test is returning to the workplace. If it feels like coming home, well, you're probably not ready to retire. But if it seems like a cramped, smelly zoo full of crazed animals... then run away fast!

 

[TromboneAl]

I don't need the money

There's your answer. If you got some disease four years from now, you'd wish you'd retired.

 

[73ss454]

I'm with Al, there comes a time when enough is enough.

I think when I was younger and didn't have enough I may have though differently. At 57 and just retired there's no amount of money worth 5 years because there's less years left.

 

[brewer12345]

The key test is returning to the workplace. If it feels like coming home, well, you're probably not ready to retire. But if it seems like a cramped, smelly zoo full of crazed animals... then run away fast!

Heheh, I told my boss that DW enjoyed meeting everyone at theoffice at the Xmas party last week. He said it was probaby like a trip to the zoo for her. I responded, "maybe a petting zoo."

 

[TargaDave]

Related situation for me, only a 2 year proposition with much lower $ amounts, but much higher stress. Sold my little biz to a (very) small foreign public company this last summer (NASDAQ listed at least). Very modest 2 year earn-out involved (VC's get the lions share and it was a small deal to start with). OK income compared to what I used to pay myself. It's the first acquisition for the buyer which only adds to the stress-expectations. Spent Labor Day weekend, Thanksgiving, and DD's 16th B-day overseas working.

Is it worth it so far? I'd have to say yes in spite of some real rough patches, and 2 years feels a heck of lot shorter than 5. Also feels a lot better than having potentially shut down and sending everyone home, or worse, having the VC's dilute us into oblivion. I guess if you're gonna attempt a hitech biz with employee's and VC's, learning how to control the stress is a given but it sure can take a toll. Even survived two law suits. Also it's not just about the $ for me but about seeing the ole "biz dream" through to conclusion, however modest it might be. After this a very very different life on tap involving water and toys

 

[rs0460a]

No.... 8)