Long overdue introduction...

[skyline]

[Deleted by author]

[chinaco]

It seems like things worked out for you. The high cost area, the number of years to support yourself (and family), and health care costs for the next 60 years. Those are probably the biggest concerns.

That said, you could probably take the leap and manage it.

But based on your comments... are you sure you want to stop working? Consider working part-time for a while and see how that works out. Rr take a sabbatical and stop working for a year.

[uncledrz]

It seems that your dollars will work out, but until you are ready in your own mind, RE may not be where you should go. When you're ready, then go.

Ten grand for a kid ought to be ok, but depends mainly on how you plan to educated you child. Private school and lessons can be quite a bit more.

Think thing through a little bit more, try pt if it can be available, try some time off if it can be available, but always have an exit strategy.

Welcome.
Tio z

[DangerMouse]

Have you done any forecasting to get a clear idea on what effect doing an extra year or two would have on your nest egg and the amount you could withdraw?

Running those figures may show an increase that makes it worth your while to stay for a short period of time just so you can say that the w*rk thing is done with 100% confidence, something you seem to be lacking with your figures today.

Whatever your decision, good luck.

[Coach]

Skyline, I like DangerMouse's point.

And it seems that for a lot of people, when they reach FI, work becomes more tolerable. I suspect mostly because when you don't HAVE to have your job, some of the annoyances just don't matter any more.

So maybe, mentally commit to just one more year on the job, and re-evaluate then.

Good luck! You're in a position many of us envy.

Coach

[yakers]

It looks like you have hit one of those emotional(or social)-financial life points and it is a good time to reflect. Points like getting married, kids arrive, kids leave, mortgage gets paid off, become retirement eligible, financial independence and retirement. One of the most interesting of these is becoming financially independent. For me this arrived when I turned 55 and became retirement eligible after 33 yrs with the Govt. Now I still have my younger son in high school but the house is paid off & no debt so I can retire if I want. This changed my life two ways, one it improved my work life. Twice in my life for 2 year periods I worked for a jerk; that will not happen again. And now I cannot blame anyone else for my work life, financial life & life in general. I must be doing what I want to be doing because there are no external conditions forcing me to do anything.

It sounds like you have accumulated some substantial financial resources at a young age so you get to jump right to the ‘front of the line’ to the FI point. Once you have determined you have ‘enough’ then you can work or not work as it interests you. One thing you can do is have more family time. I have done that, .I have lunch regularly with my wife, I make all the school meetings that involve my son and have time for him (I’m not sure my teenage son is as enamored of this time as I am ). If you like your work you can find a place that works for you or there are countless volunteer opportunities. Let us know what you decide to do.

[wabmester]

Quote:

Originally Posted by skyline * I really dislike my job - but it's not that demanding and the money is good. Should I stick around and pad the savings some more? Am I an idiot for walking away from a lucrative job like this? * I can't seem to be able to get comfortable with the $10K/yr estimate for expenses of raising kids - I expect them to be LBYM, just like me (well, they won't have much of a choice while they're living with me, I guess), but any number I come up with feels like I pulled it out of my a**. Any thoughts from folks with kids living in similiar neighborhood (large city along either coast?).

Kid expenses are all over the map, but you'll be able to manage it. FWIW, I am a card-carrying curmudgeon. I decided a while back that I had no interest in raising a kid. My wife had a panic attack at 35 and twisted my arm persuaded me that having a kid was a good idea. She was right. Being a full-time parent to your kid during these early years is a kick-ass experience. Coolest gig I've ever had.

So, I'd suggest you sit down and calculate how much money you'd be leaving on the table. At your salary and age, you'll be looking at a Giant Friggin' Number. If you can walk away from that, then you're ready for ER. I did it, and it was one of the most satisfying things I ever did. No regrets. Yet. Gulp.

[Nords]

Welcome to the board, Skyline.

Let me start by saying that the answers to all of your questions have been found most successfully by those who've had a chance to take the time off and think about them. We're not talking a two-week vacation-- a three-month sabbatical would be best, with plenty of down time to rest, recuperate, think, & talk-- especially considering that you guys are probably sleep-deprived parents anyway. (BTW you know immediately when your family is the right size. If you have twins or triplets then you know immediately when you've overshot the mark.) Maybe you could swing a combination of vacation, unpaid family leave time, and sabbatical or a leave of absence? The workplace is going to have to learn to live without you one way or another-- start getting them used to it now.

Quote:

Originally Posted by skyline I'm approaching a FIRE goal (in fact, passed my initial goal of $2M saved), but find myself stressing more than I care to about the decision, and ultimately unable to make the decision.

The two ends of the bell-curve decision are "paralysis by analysis" and "worry constructively". Right now you sound as if you've satisfied yourself on the numbers-- especially if you're handling inflation & health-care expenses. The time off can give you the opportunity to destress (after you sleep off the chronic fatigue) and gain an objective perspective on your worries. After a few weeks' infection exposure to the "real" world, you may find that you no longer care about that workplace crap.

Quote:

Originally Posted by skyline Last year's expenses were just about $50K post-tax incl. mortgage, but that was really bare-bones as it was also our first year with our son, so we pretty much lived like hermits. I figure if I FIRE, I'll need to add on another $10K for healthcare, another $10K for travel/misc, and another $10K for child-related expenses. Which would pretty much be all of my yearly safe withdrawl.

You gotta know your kids. Friends of ours were camping all over Europe-- literally climbing the Alps-- with diaper-wearing toddlers in backpacks. Meanwhile we felt that a successful day with our toddler consisted of brushing our teeth. (A bonus was combing our hair.) So maybe you'll have the time (and energy) to get out more... or maybe your kid will be too busy with you to let you get out much. Either way I wish I'd had more sleep but I wouldn't give back that toddler-parenting time for all the ER portfolios in the world. So that $10K kid cost may not grow, and it could probably shrink.

Quote:

Originally Posted by skyline * I really dislike my job - but it's not that demanding and the money is good. Should I stick around and pad the savings some more? Am I an idiot for walking away from a lucrative job like this?

Devil's advocate question-- If the job's not that demanding, then why do you dislike it?!? Sounds like the politics & reaction demands have created an environment that makes it pretty darn stressful. You're only an idiot if you're ignoring the danger signs. You could stick around and pad the savings, but you could also end up in the cardiac ICU. The problem is knowing which is going to happen first.

Quote:

Originally Posted by skyline * One option is to try to work out a part-time deal with my employer - I can't decide if the part-time headache would be worth the additional incremental income. Should I either quit completely or stay full-time until I'm ready?

Part-time is a great idea. It's been successful for others in two ways: (1) they form a new & long-term relationship where both employee & employer win, or (2) the employer makes it too hard so the employee realizes they weren't that interested in working anyway.

Talking to your employer about part-time gives them a big warning sign that they need to change the work environment for you, and their reaction to your query will tell you all you need to know about whether to go part-time or quit. If you can't take a sabbatical (for whatever reason) then part-time is a great alternative to quitting. Is consulting/contracting another option with this company? Have you read Bob Clyatt's "Work Less, Live More"?

Quote:

Originally Posted by skyline * I can't seem to be able to get comfortable with the $10K/yr estimate for expenses of raising kids - I expect them to be LBYM, just like me (well, they won't have much of a choice while they're living with me, I guess), but any number I come up with feels like I pulled it out of my a**. Any thoughts from folks with kids living in similiar neighborhood (large city along either coast?).

I think $10K is high by maybe an order of magnitude, but that depends on whether you're paying for childcare & private schools. (Probably not necessary either, but that's a whole 'nother thread.) We've raised our kid quite successfully on Goodwill & garage sales. Kids don't really need a lot of expensive experiences or costly toys-- they need parental contact time. So why not stick with the $10K estimate, knowing that the worst-case scenario is you have money left over?

Quote:

Originally Posted by skyline * My wife's parents are in pretty good shape, but mine are not in such good health (financial and medical). I can't help but feel irresponsible wanting to FIRE so early, when some additional years of work could go a long ways towards helping my parents when their money runs out.

Every financial journal will tell you to square away your retirement before you save for your kid's college or your parent's final years. Take care of yourself first before you care for others, or they'll end up caring for you too.

Either you or your parents gave you the skills to FIRE, so at least one of you is responsible enough to deserve it. And when you're FIRE'd you'll have more time to help out with your parents (again I think it's time spent with them that counts, not the numbers on the checks). If there aren't enough elder-support programs (to say nothing of Social Security) to help with their bills, then later on in your life you probably have enough employment skills to be able to snag a job that will help pay their bills. (Not that I think it's a good idea.) I suspect that you'll also have the financial-management skills to FIRE now, spend time with them on their financial habits & assets, and square them away without having to go back to work. And again you can't be much help to them if your workplace puts you in the cardiac ICU.

Quote:

Originally Posted by skyline * $90K a year seems like a lot. I know lots of families do it for far less. But I've reviewed my expenses and don't see much to cut out. I live way below my means, to a point where the rest of my family makes fun of me. Cutting out the mortgage payments, last year we made it on only $25K/yr, but all the other expenses I listed as add-ons seem legitimate - and sure enough, every time I sit down and run a scenario, it adds up to around $80-$90K/year. Am I missing something here?

Nah, but the best way to refine a budget is to live it. You may decide that in ER the things you enjoyed spending money on (or the expenses that you "deserved" to spend on because you were working so hard) are no longer important to you. Most ERs find that their budgets drop when they've gone through the discovery process of actually living their expenses, but it wasn't easily determined before they ER'd. IIRC the biggest ER budget surprises have been capital expenses (new roof, a bigger RV), health insurance (especially a diagnosis), and fantasy vacations. Otherwise the reaction has generally been "If I'd known ER was this cheap I would've done it years ago." You seem to have a handle on the financial analysis so I suspect that all your surprises will be pleasant ones.

Quote:

Originally Posted by skyline * Finally, DO I JUST NEED TO GROW A PAIR AND GO FOR IT? Or am I being reckless and selfish in wanting out so early?

Well, perhaps, but don't fling caution to the winds. Take a few months off and see how you like it. Your "reckless & selfish" part is trying to tell you that you can't take the stress much longer and that you need to do something about it. The time off (and your family) will help you decide what you need to do.

Frankly, from the way you've worded this post, I think you're just beggin' for someone to nudge you off the diving board.

[Rich_by_the_Bay]

Skyline, welcome to the board and congratulations on your financial success. You have already gotten some good advice.

I'm 58 and closing in on semi-retirement. If I were your age, I would be thinking differently since that long, long post-FIRE period will span many unforeseeable events, both personally and financially. Taxes, SS, health care coverage, and everything else will probably be unrecognizable 25 years from now.

For that reason, in your shoes I would semi-retire. Read ESRBob's book. This would enable you to enjoy a relaxed lifestyle, maintain a connection to the working world (keeping doors open for the future) and build an even bigger cushion. Don't take any work you find objectionable. Best of both worlds with only moderate sacrifice on the home front.

Either way, you've already won the game. Enjoy.

[skyline]

Quote:

Originally Posted by chinaco It seems like things worked out for you. The high cost area, the number of years to support yourself (and family), and health care costs for the next 60 years. Those are probably the biggest concerns. That said, you could probably take the leap and manage it. But based on your comments... are you sure you want to stop working? Consider working part-time for a while and see how that works out. Rr take a sabbatical and stop working for a year.

The health care risk does scare me quite a bit - although I have this weird thinking that says that the earlier you FIRE, the lower the risk. The rational being that the sooner you retire, the healthier you are, and the less likely that you'll have pre-existing conditions when you do eventually need to self-insure.

The part-time thing may end up being just the ticket. That'll force me to into better evaluating my financial condition since I'll need to cover my own benefits, but give me a better 'retreat' in case I decide to return for a few more years.

[skyline]

Quote:

Originally Posted by tio z It seems that your dollars will work out, but until you are ready in your own mind, RE may not be where you should go. When you're ready, then go. Ten grand for a kid ought to be ok, but depends mainly on how you plan to educated you child. Private school and lessons can be quite a bit more. Think thing through a little bit more, try pt if it can be available, try some time off if it can be available, but always have an exit strategy. Welcome. Tio z

Kid(s) are definitely going public school. I figure I've paid my dues in taxes over the years, and certainly plan on using the public school system. The same reason why I would rather use the playground equipment at the local parks than buy my own in my backyard. It's good for my budget and good for my community (instead of everyone paying their own way for everything).

[notes another vote for part-time]

[skyline]

Quote:

Originally Posted by DangerMouse Have you done any forecasting to get a clear idea on what effect doing an extra year or two would have on your nest egg and the amount you could withdraw? Running those figures may show an increase that makes it worth your while to stay for a short period of time just so you can say that the w*rk thing is done with 100% confidence, something you seem to be lacking with your figures today. Whatever your decision, good luck.

Yes, that's the thing that keeps holding me back. Just 2 more years of full-time work, assuming a 5% inflation-adjusted return on the principal takes me to about $2.5M in todays dollars. That's another $17K/year of spending power in FIRE. That would definitely give me the confidence to FIRE (of course, I say that now, who knows if I'll have the same panic attack if I hit that point)

Or, I could work part-time (just enough to cover my expenses), and wait 3.5-4 years to get to the same point.

[skyline]

Quote:

Originally Posted by yakers It looks like you have hit one of those emotional(or social)-financial life points and it is a good time to reflect. Points like getting married, kids arrive, kids leave, mortgage gets paid off, become retirement eligible, financial independence and retirement. One of the most interesting of these is becoming financially independent. For me this arrived when I turned 55 and became retirement eligible after 33 yrs with the Govt. Now I still have my younger son in high school but the house is paid off & no debt so I can retire if I want. This changed my life two ways, one it improved my work life. Twice in my life for 2 year periods I worked for a jerk; that will not happen again. And now I cannot blame anyone else for my work life, financial life & life in general. I must be doing what I want to be doing because there are no external conditions forcing me to do anything. It sounds like you have accumulated some substantial financial resources at a young age so you get to jump right to the ‘front of the line’ to the FI point. Once you have determined you have ‘enough’ then you can work or not work as it interests you. One thing you can do is have more family time. I have done that, .I have lunch regularly with my wife, I make all the school meetings that involve my son and have time for him (I’m not sure my teenage son is as enamored of this time as I am ). If you like your work you can find a place that works for you or there are countless volunteer opportunities. Let us know what you decide to do.

Yakers - sounds like you're very comfortable in your FI state. I agree that that makes the work much more appealing. Part of the reason why I now have reasonable work hours and will just choose to work from home at times is because of the knowledge of FI, and not needing to impress anyone. Now if I can just get over my indecision on the RE part!

[skyline]

Quote:

Originally Posted by wab Kid expenses are all over the map, but you'll be able to manage it. FWIW, I am a card-carrying curmudgeon. I decided a while back that I had no interest in raising a kid. My wife had a panic attack at 35 and twisted my arm persuaded me that having a kid was a good idea. She was right. Being a full-time parent to your kid during these early years is a kick-ass experience. Coolest gig I've ever had. So, I'd suggest you sit down and calculate how much money you'd be leaving on the table. At your salary and age, you'll be looking at a Giant Friggin' Number. If you can walk away from that, then you're ready for ER. I did it, and it was one of the most satisfying things I ever did. No regrets. Yet. Gulp.

Wab - you've nailed it. The decision you made is the decision I'm having such a hard time making. Maybe that means I'm not ready? Was your decision hard or easy for you to make? Any other significant factors you considered other than financial? I agree with you on the whole kid thing, it really is great, and is a major driver towards me wanting to FIRE.

[skyline]

Nords: Thanks for the welcome and the response. Wow - a reply as long (longer?) than my original post! I appreciate all your thoughts, and since I haven't figured out how to in-line my response in the middle of a post to keep things organized, I'll just write it up at the bottom here.

I fully agree on the sabbatical thing. I took one for 4 months when I was single, and it really helped me better understand what I wanted out of life (that was the start of my LBYM, although no one told me about it, just realized that spending money wasn't what I wanted out of life, but that saving money would give me what I wanted). My fear (I have lots of fears, don't I?) is that if I do decide to return to full-time work, I won't be able to get anything close to my current salary. W/o going into too much detail, I am earning what I earn due to some special circumstances and luck at my company. I won't be able to take a leave of a year or more (which is what I would need, I think) and be able to return to the same position here, or to a similar wage elsewhere w/o busting my a**. Sounds like many of the folks here are voting towards part-time - I'm leaning more and more towards that since I think I can pull that off and still earn my equivalent rate. But I know from my experience that part-time is very different than sabbatical - it takes a good month or two to really clear the head. So I see the part-time thing being more about stretching things out (by reducing the level of stress, increasing the amount of quality time with family, and minimizing the impact to saving principal), and less about figuring things out. But as noted in a previous post, if I stretch things out a few more years by going part-time, and the market cooperates, maybe it'll be brain-dead easy to decide to FIRE.

I'm in complete agreement about raising kids in a cost-effective manner. Not that I plan to deprive them of anything (I'm sure you don't either - I read your previous posts about 'dressage' ), but I agree that hand-me-downs and garage sales for things that aren't very important are the way to go. I'd much rather be able to spend time playing with them with no toys than have them play by themselves with brand-new electronic toys. A funny thing about LBYM is that most of our neighbors seem to take pity on us (since we look and act like the poorest folks in the neighborhood - youngest, worst dressed, crappiest cars, etc.), and seem to throw baby/toddler stuff at us! So maybe the $10K estimate is too high. But as cheap as things are now, I don't know anyone that is LBYM like us that has experienced raising kids to college - so I pad the kid costs to account for the unknown once they get older (excluding college - that's a whole nother discussion topic)

The 'taking care of parents' is one of the tougher decision points for me. While I agree with your message on taking care of me first (reminds me of those in-flight safety videos where you put on the mask first before helping one in need), the thing that gives me doubts is that I feel very young. It's not like (I hope!) work's going to kill me in the next five years [looks for wood to knock on]. So I ask myself, my parents worked their a**es off (I suspect most of the folks here won't ever know work like they knew work), shouldn't I at least spend a few more years toughing it out to be able to provide for them better as well as my own kid(s)? Am I really risking anything other than delaying FIRE? Or am I just creating unnecessary opportunities for excess/wasted spending? This is a tough one...

As I read through the rest of your post, I'm thinking more and more that part-time is the way to go. It'll help me create a 'controlled' environment for test driving my budget (esp. the health insurance part), while building the nest egg a little more. If I find my expenses are coming in significantly under my estimates (as you are predicting is common for most folks when they FIRE), I can fully FIRE earlier. If my expenses, OTOH, track at/higher, then I have more recourse to return to my pre-part-time state.

"Frankly, from the way you've worded this post, I think you're just beggin' for someone to nudge you off the diving board." - you're very right, I really wish someone could just kick me in the head and I'd know exactly what to do. But I know that's wishful thinking - However, all this discussion is definitely helping me think about my approach some more...

[skyline]

Quote:

Originally Posted by Rich_in_Tampa Skyline, welcome to the board and congratulations on your financial success. You have already gotten some good advice. I'm 58 and closing in on semi-retirement. If I were your age, I would be thinking differently since that long, long post-FIRE period will span many unforeseeable events, both personally and financially. Taxes, SS, health care coverage, and everything else will probably be unrecognizable 25 years from now. For that reason, in your shoes I would semi-retire. Read ESRBob's book. This would enable you to enjoy a relaxed lifestyle, maintain a connection to the working world (keeping doors open for the future) and build an even bigger cushion. Don't take any work you find objectionable. Best of both worlds with only moderate sacrifice on the home front. Either way, you've already won the game. Enjoy.

Rich, thanks for the welcome. Your message seems to be pretty consistent with the other replies - and I think I'm definitely warming up to it. My wife keeps reminding me that I wouldn't be able to do a whole lot right now if I fully-retired (owing to how, we happen to have a baby to take care of). I beg to differ, I've got all kinds of things I can do to keep myself busy w/o work...but she's got a point. We're much closer to Nord's description of his household than the ones hauling kids around Europe.

So now I just gotta figure out how to start talking about this with my boss! (I promise to start a thread outside of the 'Hi, Iam..." section if I need input. I feel like I've abused my privileges for an introduction thread!)

Thanks everyone,

[chinaco]

Quote:

Originally Posted by skyline My fear (I have lots of fears, don't I?) is that if I do decide to return to full-time work, I won't be able to get anything close to my current salary.

I am in IT. I am not sure what you do. If you are in managment or if you are a sofware developer You are at a unique time in history in that field. The ecomonics will eventually stablize wages in the field. You will probably earn less going forward (over a 10-15 year horizon). Your area of the country pays a bit more than other areas. Your salary is that of the CIO of most small to medium size companies on average.

My suggestion would be to milk it for as long as you can (or can stand it) then walk away. You might just need to change your perspective. What is it that annoys you about your job? That soul searching will help. Try to look at it like this. You are not working a job for the next 30 years... You are working the next several years to achieve FI with the goal of walking away so you can do whatever you want for the rest of your natural life. That will probably liberate you from the frustration. If stupid sh#t goes on at work... just overlook it. You new goal is FI... not being the hotshot at work! To heck with politics and competition. If you have a poor boss, just play the game.

Set a target. How many years do you need to work full-time before you walk. To do this, you need to do some homework and determine (i.e., project) your expenses. You also need to understand how the lifestyle changes will affect you and your family... you will never really know until you try, but thinking about it will help you prepare.

Good luck and welcome aboard.

[donheff]

Skyline -- everybody talks about the first five years of ER being the risky part. A major bear in those early years can break the bank. Get through them OK and your "S"WR is super-safe. You sound like you are not yet totally burned out so why not compromise? Set a target for ER of 3-5 years out. See if you can talk your employer into the part time deal so you can cover your expenses while the portfolio grows. BUT - keep your planned SWR rate based on today's portfolio, i.e. set the amount at $90K and inflate it 3% over the next 3-5 years while you work. When you reach your target date you will already know what the market has done. If it has done well you retire at your $90K+inflation current rate with a better than ever guarantee that you are in great shape. BUT, the fun isn't over. Since your portfolio was growing for the past 5 years, you could have taken an even larger "S"WR using the traditional calculations. So live on your $90K+ for 5 more years and if everything continues to go well kick your rate up again.

[wabmester]

Quote:

Originally Posted by skyline The decision you made is the decision I'm having such a hard time making. Maybe that means I'm not ready? Was your decision hard or easy for you to make? Any other significant factors you considered other than financial? I agree with you on the whole kid thing, it really is great, and is a major driver towards me wanting to FIRE.

My sequence of thoughts went something like this:

1) My commute sucks, and prospects for this company don't look great for the next two years or so.
2) I've got enough socked away to coast for a *long* time, so time for a sabbatical!
3) Ahhh, summertime. Sailing, kayaking, running, cycling. Fun in the sun.
4) OK, time to evaluate my options. Work: sucks. Buy or start a business: stress. Hmm, what to do?
5) Wife says "Honey, let's have a rug rat." OK, but let's get a bunch of traveling out of our system first....
6) Wow, this market is doing pretty well, and the weather is still nice. Oh, and hello there little one.
7) 5 years later... My skills are now pretty much obsolete, net worth is higher than ever, thoughts of ever w*rking again are gone.

So far, so good.

[HobbyDave]

Quote:

Originally Posted by skyline My fear (I have lots of fears, don't I?) is that if I do decide to return to full-time work, I won't be able to get anything close to my current salary. W/o going into too much detail, I am earning what I earn due to some special circumstances and luck at my company.

Without being too pushy, I'm really curious what type of situation you're in. As someone else mentioned, you're making a CIO level salary, and if you're not at that level, I'm just curious what the situation is (being in IT also makes me more curious, because I want this situation to happen to me

Otherwise, I think the other people have given some good advice. Take some time to think about things, look into part time work, see if you can handle that a bit better. If you find your expenses are low enough, just walk away