2021 - My Time to FIRE?

[ItsTime]

Hi All,

I am a new member here and excited to learn from the great people and posts.

I am 52 and my wife is 50. We have two kids (one in college and the other in high school). I have been a lifelong investor albeit a boring one (index funds primarily).

My goal is to retire at the beginning of January, 2021. I am currently employed but planning to wind that down by end of year.

Our current portfolio total is approximately $3M:
Taxable Account - $1.68M ($1.44M Index Funds / $$240K cash money market)
IRA/401(k) - $1.340M

Being that our kids education are fully funded by our 529 plans, we are no longer contributing to them.

While the calculators that I have run all state that we are good to generate $7K a month of income for the next 40 years, I remain anxious to pull the plug. I just have a fear of the unknown and struggling to get over it. Although I am ready to leave my 60+ hours a week corporate life, it makes me nervous to think of not having an ongoing bi-weekly paycheck.

I appreciate any guidance, comments, feedback, etc. Looking forward to sharing and learning!

 

[strobot]

Congrats! Find a pet project or hobby that you like and try to make a few bucks at it. If it turns out successful, then great! It will take your mind off of your corporate grind and let you focus on something new/refreshing. Or, better yet, start a garden and grow some vegetables.

As others will say on here too, if you are worried about losing your paycheck then cut back to part-time for a while to see how that goes with a reduced paycheck. If it works, then quit!

Congrats again!

 

[firewhen]

This says it all

Hi All,

Although I am ready to leave my 60+ hours a week corporate life,

Nuff said, do you really want to spend half your waking hours on this drudgery? You did not say you love it or even want it, and I bet it is even longer if you factor in checking emails and just thinking about work. Sounds like it never really leaves you if it is 60+ hours.

What will you do for health care? Everything else aside, $3M is a nice nest egg. Also you are calling yourself ItsTime, that speaks volumes...

 

[DrRoy]

I like your WR of 2.8%. That's about where I am.

 

[ILikeStarTrek]

+1 to what the other posters so far have said.

Make sure that in your budget, you are accounting for a medical plan, income tax (especially from retirement money withdrawals), and big ticket items (replacing car, house roof, HVAC, etc).

Have you read the thread about important things to think about when you are near retirement?
https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

You are not the only one experiencing a range of emotions, including anxiety, about taking the plunge. Look at these threads for other people considering retiring this year or next year:
https://www.early-retirement.org/forums/f28/class-of-2020-a-65571.html
https://www.early-retirement.org/forums/f29/class-of-2021-a-71945.html

Hopefully reading these thoughts of others can help you solidify your own thinking and help with anxiety.

 

[ItsTime]

Thanks all for the replies.

@firewhen, you bring up a good point regarding the constant top of mind aspect of work which definitely extends beyond 60 hours (not to mention always a few weekend hours before Monday). For healthcare, my wife works part time and just enough hours to earn medical benefits.

@DrRoy, I am attempting to keep my WR below 3% as think it will assist in reducing the anxiety when I officially transition. Always helpful to hear what other folks are doing so thanks for sharing.

@ILikeStarTrek thanks for the helpful links, great reading!

 

[flybynight]

Hi there! I totally understand what you're going through. The details of my situation are posted somewhere on here as I was in your situation in Dec 2018. I finally pulled the plug last October and I've been loving my new life. Our assets and withdrawal rate are almost identical to you. Main difference is both our kids are out of the house and I'm a bit older at 59. I actually liked my job but I had to commute out of state every week and it was a highly stressful position (and high paying). The tipping point for me was this: Once I finally had confidence and accepted the fact that I had reached and exceeded my FI number, I found my motivation to continue with the pace and effort required to do my job started to diminish at a rapid rate. This lack of motivation was an energy drain as my ambition and interest to accomplish more and earn more rapidly dissipated. This told me it was time to move on to my next chapter. Was not fair to me or my employer to remain on and go through the motions. I was a very successful high achiever and I would have hated to just hang on and deliver mediocre performance. Hey - a 2.8% WDR is pretty sweet!

 

[fassmac]

This lack of motivation was an energy drain as my ambition and interest to accomplish more and earn more rapidly dissipated. This told me it was time to move on to my next chapter.

This is exactly how I am starting to feel. I am 51 and plan is to quit in 2-3 years with about $3 MM. I could do so now with 4%.

 

[flybynight]

This is exactly how I am starting to feel. I am 51 and plan is to quit in 2-3 years with about $3 MM. I could do so now with 4%.

I remember catching myself more and more staring out my lovely corner office window daydreaming. Reminded me of the Oregon Duck...

 

[HI Bill]

I like your WR of 2.8%. That's about where I am.

You guys might want to live a little and consider bumping it to at least 3.5%! Robbie - you need to counsel some folks on the "Blow that Dough" mantra!

 

[cat4ever]

Hi All,

we are good to generate $7K a month of income for the next 40 years,

Just want to make sure you understand that investment income isn't the same as take home pay from your employer, which has already had the taxes taken out of it. Investment income still has to have Federal and State income taxes paid on it. I made that mistake in all my estimates, but luckily had enough wiggle room in my plan to not have to post-pone retirement (only 7 weeks away now).

 

[flybynight]

You guys might want to live a little and consider bumping it to at least 3.5%! Robbie - you need to counsel some folks on the "Blow that Dough" mantra!

Haha...don't worry Bill. Once I get my retirement sea legs underneath me a bit and the Covid/travel situation gets back to normal, we plan to ratchet the spending up quite a bit and blow plenty of that dough!!

 

[HI Bill]

Haha...don't worry Bill. Once I get my retirement sea legs underneath me a bit and the Covid/travel situation gets back to normal, we plan to ratchet the spending up quite a bit and blow plenty of that dough!!

Great! I oft repeat what I read here once or twice: I have no desire to be the richest person in the graveyard. I want to pre-load my spending earlier in life, when I'm presumably healthier and can scuba dive and travel, and get the most out of life. When I'm 85, I'll be fine moving into a small condo, and I won't need much in the way of dive gear, tools, or toys....a la Ty Bernicke's paper 'Reality Retirement Planning: A New Paradigm for an Old Science' from 2005. In it he emphasized using a steady, real spending reduction in each successive year of retirement until age 75. Real spending was assumed to remain constant in stages after age 75. FIRECALC has this option in one of the latter tabs, but it doesn't apply to early retirees who are much younger than it would to someone who retires at 65 or 67.

 

[ItsTime]

Great points and blowing some of this dough is definitely the plan! Once I take the plunge and get a year behind me in living off of my retirement income portfolio, I am planning to be less conservative. Thanks all for the great input, very thought provoking and helpful!