49 and $5M in Retirement - Having trouble FIREing myself

What happens to your stake in the private company if you retire? Can you sell? If so, I'd seriously consider retiring.

If you can't sell, I'd keep working. I suspect you're still adding enough $$ per year to the nest egg that it's material to your future lifestyle. You also frankly don't seem all that ready to retire. Why not pad the nest egg a couple more years, make sure you're good on paying for college, and then have a great retirement. In the meantime, rest easy at night knowing that you can retire any time you want should it come to that.
 
lucky2030 said:
What happens to your stake in the private company if you retire? Can you sell? If so, I'd seriously consider retiring.

If you can't sell, I'd keep working. I suspect you're still adding enough $$ per year to the nest egg that it's material to your future lifestyle. You also frankly don't seem all that ready to retire. Why not pad the nest egg a couple more years, make sure you're good on paying for college, and then have a great retirement. In the meantime, rest easy at night knowing that you can retire any time you want should it come to that.
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I’m in a similar situation as the OP. Similar expenses (slightly higher) similar net worth. I’m 52 and will likely wrap up Megacorp by 54, then work part time for a few more years wrapping everything up by 56ish. My kids are only 9 and 11 so I feel the need to work a little longer, I just want out of the daily grind. Hoping I can find a part time gig that will bring in ok money but allow me the flexibility of taking 30-60 days off whenever I want.
 
I don't have the answer to your question, BUT...

To make decisions like this I use this process. First, define what I really want to do. Do I really want to keep working or do I really want to retire now? If I want to retire now, how can I make it work and what are all the obstacles to that? If it seems very doable even with obstacles, I could try. What I do is figure out what is the worst case scenario. If I do what I want (retire) and the worst case scenario happens, can I deal with that? In my case, the worst case scenario would be that I would have to go back to work part-time. I was ready to stop working so badly that I was willing to accept that. If I didn't retire, I'd be working anyway. My mother and father did the same thing when they left work early and they lived on disability and a small pension. My mom knew she might have to work some if things got tight and she accepted that...but that moment never came.
Time may begin to seem more precious to you as you get into your mid fifties. It did for me, anyway. The truth is we don't know how much time we have and that becomes particularly evident in your fifties I think. My oldest brother only got to enjoy three years of his retirement and nice pension. I'm just saying we can assume we have more years than we do. Enjoy the fruits of your labor if you can.
 
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OP, I retired about a year ago. Like you I was also was in a pressure cooker C-suite role at a very successful company. I retired at 58, with about $4M NW, kids out of the house, college and grad school already paid for, and a lower annual burn rate. My prior posts detail my challenge in pulling the plug. I wanted to mention one item which surprised me about retirement. I also thought that once I walked away from the high paying gig that it was irrevocable and I would never be able to step back in at that level again. I was wrong. I have had literally dozens of opportunities to jump back in at the same level for equal or greater pay. If your firm is successful, then your reputation is out there and executive recruiters will come knocking relentlessly. Surprising as it may sound, even amidst a pandemic, the demand for experienced and accomplished C-level execs is very high. In my case, once I tasted freedom for a few months, I could never go back and have had no regrets or second thoughts. My point is this: if you decide to pull the plug and then regret the decision, you will have opportunities come your way to jump back in. You may have to relocate, but opportunities will be there.
 
Fremontpoke said:
I built a good career and have achieved highest level of corporate hierarchy. My earning power now and next few years will be highest of my career/life. Have a comfortable life but I'm drawn to making a change and retiring for simplier life.



As far as retirement savings: I have over $5M in networth and worrier in me says, may not be enough. I have couple of kids to send to college and who knows what the life challenges to come.



I can either stay where I am and make as much as possible to retire early or retire early and see what life will be like as early retiree - which has been my dream.



My monthly expense, even if I retire, will definitely be over $15k a month. Health care, food/dining out, kids expense, traveling, auto, insurance, etc.



With low interest environment, its going to be hard to get yields on conservative investments (ie CD/bond). So 4% rule may not be so comforting going forward.



How do you get comfortable Firing yourself? Welcome comments.
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Hi and wow what an achievement at such a young age of 49. Most would love to have 5M in assets :)
That being said, after reading through most of the posts, you have a lot to consider indeed.
1. If you really want to retire you can by making some modifications to your expenses. 15k monthly seems awe fully extreme.
2. Know the difference between want and need. Not trying to be rude just real.
3. College is expensive and there are ways to reduce that cost but:confused:?
4. Expenses, pare down if possible. It seems like you are use the higher end of living and that is fine although just know your realistic limits.
5. Retirement income: I did not see any from a retirement plan at age 62 or are you just planning on SS? The 5M will run through rather quickly if you do not use a wise withdrawal process. You are correct, in my opinion the 4% rule would very optimistic if the market keeps up on this environment. The stock market of our parents days are much different and will continue to morph.
6. Lastly, if you insist on the 15k withdrawal proposed, recommend as others have, to work until 55 and max out all you can. If you haven’t done so yet, put your numbers through some reliable retirement calculators like FireCalc. The numbers do not lie if they are actually reliable:)

Again, you have done so very well and so, I recommend that you prepare for the worst case at age 55, and just see how it goes if you can leave earlier.
 
flybynight said:
OP, I retired about a year ago. Like you I was also was in a pressure cooker C-suite role at a very successful company. I retired at 58, with about $4M NW, kids out of the house, college and grad school already paid for, and a lower annual burn rate. My prior posts detail my challenge in pulling the plug. I wanted to mention one item which surprised me about retirement. I also thought that once I walked away from the high paying gig that it was irrevocable and I would never be able to step back in at that level again. I was wrong. I have had literally dozens of opportunities to jump back in at the same level for equal or greater pay. If your firm is successful, then your reputation is out there and executive recruiters will come knocking relentlessly. Surprising as it may sound, even amidst a pandemic, the demand for experienced and accomplished C-level execs is very high. In my case, once I tasted freedom for a few months, I could never go back and have had no regrets or second thoughts. My point is this: if you decide to pull the plug and then regret the decision, you will have opportunities come your way to jump back in. You may have to relocate, but opportunities will be there.
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OP: If you are like the rest of us mere mortals, I wouldn't count on more corporate opportunities surfacing. In my experience (and I'm clearly less talented and skilled than others on this board), it is very hard -- impossible, perhaps -- to find job opportunities in one's 50's, certainly at the same compensation level or higher.

So as a matter of risk management for one's financial life, I would never assume that one could re-enter the corporate world after exiting it. That was certainly the case pre-pandemic, and is likely more pronounced now, and likely for the foreseeable future. Maybe some fields or skills -- IT, for example -- are immune from this. Other fields -- energy, travel, hospitality, you name it -- I would assume as a matter of prudence that a corporate exit was permanent.

Consulting is another matter, I suppose.

I actually think age discrimination exists.
 
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WyomingLife said:
OP: If you are like the rest of us mere mortals, I wouldn't count on more corporate opportunities surfacing. In my experience (and I'm clearly less talented and skilled than others on this board), it is very hard -- impossible, perhaps -- to find job opportunities in one's 50's, certainly at the same compensation level or higher.

So as a matter of risk management for one's financial life, I would never assume that one could re-enter the corporate world after exiting it. That was certainly the case pre-pandemic, and is likely more pronounced now, and likely for the foreseeable future. Maybe some fields or skills -- IT, for example -- are immune from this. Other fields -- energy, travel, hospitality, you name it -- I would assume as a matter of prudence that a corporate exit was permanent.

Consulting is another matter, I suppose.

I actually think age discrimination exists.
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Not sure what you mean by "mere mortals", but the OP said he was a CFO. I was simply sharing my current experience that seasoned successful C-level talent is in high demand. I retired last October and it was in high demand pre-covid as well as post-covid.
 
Animorph said:
This is also a good time to remind that FIRECalc retirements of longer than 30 years have tended (or used to tend) to look rosier than 30 year retirements. The reason is that the last historical period it can look at for a 30 year period starts in 1990 or so. Longer retirements have to start even farther back. Fewer trials and less chance of seeing a recession at the beginning of retirement can result in a seemingly better probability of success for a 50 year period than a 30 year period, which is not likely to hold true in real life.
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That is a really good point that I hope people consider. It's easy to overlook..
 
I left the w*rkforce eight years ago after a 27-year mega corp career. Our son was a 9th-grader at the time in HCOL area, and our financial situation was similar to yours albeit higher liquid NW but also higher spend rate. We started out at just under 4% WR. Since then, our investable assets have grown more than 50%, so now sub-3% WR. My recommendation is to not count on lowering your spending in retirement and, given your young age, wait to pull the trigger until your WR is closer to 3% WR.
 
HarveyS said:
As an officer of a mid size company my question relates to the status of the company. Is it public or private? What is the likelihood of a takeover/sale/recapitalization that might be a windfall for the execs? In your shoes I would consider this very carefully. If you leave and there is a windfall you miss, that would be a bummer.
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All fair points but the counter-factual is, for example, what if your health takes a turn for the worse and you find that the long enjoyable retirement you were planning may, in fact, be neither? That is a real bummer. For me anyway the answer is to realise that even if you have enough you can always rationalise staying a bit longer for a bit more; so set yourself a target and stick to it. For me, it was a min of $5m in investable assets and age 55. I'm > $5m now and turn 54 this week. I'll lose +/- $0.5m in unvested options if I retire before 62 - but so what, I have enough money and only so much time to enjoy it. (PS: surviving cancer changes your perspective!).
 
BritChap said:
All fair points but the counter-factual is, for example, what if your health takes a turn for the worse and you find that the long enjoyable retirement you were planning may, in fact, be neither? That is a real bummer. For me anyway the answer is to realise that even if you have enough you can always rationalise staying a bit longer for a bit more; so set yourself a target and stick to it. For me, it was a min of $5m in investable assets and age 55. I'm > $5m now and turn 54 this week. I'll lose +/- $0.5m in unvested options if I retire before 62 - but so what, I have enough money and only so much time to enjoy it. (PS: surviving cancer changes your perspective!).
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I 100% agree. The intention of my comment was make sure OP looks at all the angles and make an informed decision. I have a friend who was squeezed out of a private company about 18 months before the company was acquired and it cost him dearly. Sure, squeezed out is different than leaving, but in the end, financially, the result was the same.

The curse of "one-more year" hits most of us, and we all leave something on the table when we quit.

Congratulations on reaching your financial goal ahead of plan! In your shoes, I would be seriously considering a happy birthday to me gift of "one-more year" of retirement. You hit your financial target, so why let age hold you back! Time >> Money

((Unless, of course, pension and/or retiree medical requires a minimum age 55))
 
HarveyS said:
I 100% agree. The intention of my comment was make sure OP looks at all the angles and make an informed decision. I have a friend who was squeezed out of a private company about 18 months before the company was acquired and it cost him dearly. Sure, squeezed out is different than leaving, but in the end, financially, the result was the same.

The curse of "one-more year" hits most of us, and we all leave something on the table when we quit.

Congratulations on reaching your financial goal ahead of plan! In your shoes, I would be seriously considering a happy birthday to me gift of "one-more year" of retirement. You hit your financial target, so why let age hold you back! Time >> Money

((Unless, of course, pension and/or retiree medical requires a minimum age 55))
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Thanks and fully agree - best to consider all of the angles but not to let that make you lose sight of the goal!

I'm sticking with one more year as I have a kid at university and one at private school. Another year of earning / saving will eat into the costs of that quite a bit. Also, you are right - 55 is the earliest you can start taking money out of a private pension in the UK. On the plus side, healthcare is free here so that's not a concern - well not really free as we pay a lot of tax, especially if you are a higher earner, but I will have zero medical bills unless I want a fancy room or a facelift :).
 
Thank you to the OP for posting and everyone's comments. Although far from the majority it seems there are many here who are struggling with the same situation, including me.

I have learned so much on this forum for the past 10+ years while my family, career, and savings have progressed. Due to a lot of hard/smart work and fortunate bull market recovery since 2008 I find myself mid-forties with savings that seem on the surface to be more than adequate. The burnout of the corporate world screams for a break or retirement often yet with a longer time horizon to plan for $4-5M may not be enough.

Our family does not have a super affluent lifestyle but when planning with 2 younger kids (9 & 10), having to cover healthcare for 20+ years before Medicare kicks in, living in a moderate COL city, and no pension it is tough. We have 1 year left on our mortgage and even then with no other debts I will still have hesitation.

I'm glad to see so many responses that highlight others in similar situations. It's a very good first world problem to have but still weighs on many.
 
Fremontpoke said:
Its a private company and im fully vested. Theoretically the private company, if sold would be more than I can spend in a life time.

FIREcalc, im still learning but the financial industry doesnt make sense to me. For example, financial advisor at wellsfargo daid they'll charge 1%. Then the mutual funds the invest in charges 0.5% -1%.

How the logic work if Im to live on 3% and i have to pay tax on it.

Bonds and CDs rate cant live off of. Any wisdom will be appreciated it.
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This totally does NOT work, which is why many on the forum recommend against using a financial adviser who charges a percentage of AUM. I would recommend that you would use this time to study up on how to handle your assets and fund a long and very comfortable retirement for you and DW. You also may want to bump up your taxable accounts during the interim. Taxable accounts does not necessarily mean that those accounts generate a large amount of taxable income. Also peek over at the Bogleheads.org forum for suggestions as to asset allocation and inexpensive funds.

BTW, you have done extremely well. I see you as a possible age 55 retirement (due to 72t option) although if you need to go earlier, you will certainly not starve.
 
Animorph said:
This is also a good time to remind that FIRECalc retirements of longer than 30 years have tended (or used to tend) to look rosier than 30 year retirements. The reason is that the last historical period it can look at for a 30 year period starts in 1990 or so. Longer retirements have to start even farther back. Fewer trials and less chance of seeing a recession at the beginning of retirement can result in a seemingly better probability of success for a 50 year period than a 30 year period, which is not likely to hold true in real life.
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This is one reason I always look at 30 years and see how much I would have and if a SPIA would get me there for the next 20 years if needed.
 
Animorph said:
This is also a good time to remind that FIRECalc retirements of longer than 30 years have tended (or used to tend) to look rosier than 30 year retirements. The reason is that the last historical period it can look at for a 30 year period starts in 1990 or so. Longer retirements have to start even farther back. Fewer trials and less chance of seeing a recession at the beginning of retirement can result in a seemingly better probability of success for a 50 year period than a 30 year period, which is not likely to hold true in real life.
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Emphasis added.

While your point about the number of trials is, of course, true, I think one can have a time horizon of up to 54 years, which I believe is the longest time horizon one can use while still capturing the trial that begins in 1966 - a year I think that is generally thought to be the worst year to have retired. To test this:

- Leave all the defaults in FireCalc
- Go to the "Investigate" tab, fill out the inputs under the heading, "Given a success rate, determine spending level for a set portfolio, or portfolio for a set spending level" by entering 100% and selecting the radio button, "Spending Level"
- Press the "Submit" button

You'll see that FireCalc says that one can safely (i.e., with a success rate of 100%) use a withdrawal rate of 3.59% for a 30 year time horizon.

Now, rerun FireCalc but this time change the time horizon from 30 years to 54 years.

You'll see that FireCalc says that one can safely (i.e., with a success rate of 100%) use a withdrawal rate of 3.12% for a 54 year time horizon.

Edited to add: If you rerun FireCalc using a 53 and a 55 year time horizon, the withdrawal rates would be 3.13% and 3.24%, respectively.
 
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