High earner OMY syndrome

Thanks to marko, steveark & others who posted similar sentiments about losing your professional identity & creating a satisfying new life. I want to believe that could happen to me -- that it will happen to me! -- when I find the courage to take the leap.
 
I wasn't a high earner, but could have been. I had the opportunity to buy out our company president at around age 50. Would have cost me about $600k. Would have made north of $500k in good years if I had done it. But I was getting ready to gear down, not gear up. And it would have taken a decade of hard work to recoup my investment. So I didn't do it. Instead, I started an 8 year gear down retiring at 58. I'm happy with my decision. Although I liked my job, I liked a less stress lifestyle better. The retirement lifestyle meant more to me than the extra money.
 
Even here, the syndrome of OMY seems to go beyond high earners.

In my own career, I've known a couple of co-workers who had spouses die or become disabled during this OMY phase. This cost of waiting is very much on my mind, especially since being having been raised in urban America in the 70s is taking a rapid toll on my peers from that era.
 
I spent my legal career in private practice and earned a very good income. I enjoyed my job (mostly) and got on well with my colleagues (mostly). I FIREd in 2013 at 47. My motivation for leaving was not that I disliked my job/career but an awareness that my life is a finite thing and time spent in the office is time that could be spent doing other things that I would like to do (many of which get harder as I get older).

I did go part time (and continue to do some very occasional consulting + HK Law Society committee work), but only because I find it interesting not because I need the money.

For me it was all about retiring to something rather than retiring from my career and it's been great.
 
First I never made 1/2 that $500k but the reason I've stayed working 3 days a week is
I like the work and it is in my mind easy money. A tile setters knees will tell him when it is time to go. Data mining requires one finger to type the queries and code. So far that finger is holding up pretty well.

I expect that a highly compensated litigator still has a sharp tongue at 63. Complex, mentally challenging work will keep you at the job.
 
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If your life style is in line with your earning, people at all levels will have the same problems when decide to retire. I think those who live on paycheck to paycheck also have difficulty to make a retirement decision. They just don't discuss it here.

Also agree with this. It's all relative. The "poor" hardworking Joe or Jane, wrapped up in their career, making "only" 150k a year, with enough to RE, gets a bump to 250K, also faces the same dilemma. Just as important to them as to the "high earner." Part of it is it took so long to claw their way to that position, a feeling of achievement, an identity with the position, and finally reaching the pinnacle of earnings, can make harder to walk away.
 
Also agree with this. It's all relative. The "poor" hardworking Joe or Jane, wrapped up in their career, making "only" 150k a year, with enough to RE, gets a bump to 250K, also faces the same dilemma. Just as important to them as to the "high earner." Part of it is it took so long to claw their way to that position, a feeling of achievement, an identity with the position, and finally reaching the pinnacle of earnings, can make harder to walk away.

Most of the Joes i know make way less. I had to google this one: If an individual makes 150k a year he is ALREADY in the top 4 %. 250k? hahaha top 2 %. The masses are are all waiting for their pensions or age 62 to hit the retirement road. They are not running retirement calculators. They will do just fine.
 
I went at 58/59. Never regretted it for a moment. Especially when a former colleague of mine who had a long list of retirement plans dropped dead at 65-one year after he retired. He had been doing the OMY thing for the five years prior to his retirement.

Life is for living. If one has the desire and the financial resources to do it then why wait. You cannot take it with you.
 
Question for higher earners who made the decision to RE early as well as those approaching a potential early RE... how did/will you reconcile giving up the bigger income? While I know "high earner" is a relative term, my assumptions here are you are making consistently over $500k, don't hate your job, are financially prepared in your early/mid 50's to launch. I know these are "rich people" problems, but I would suggest it is tougher to make the transition for higher earners earlier assuming the above which often results in a higher probability of OMY. In my case and I would assume the same for most others who have higher incomes, stopping work cold turkey for a year or more would have a significant affect on the ability to jump back in and replace the high income again, if you decided to go back in the workforce. While going part time for some may be an option, in my case, I need to be fully engaged in my business to keep the income level up. I am more curious as to how the big earners quit on their own terms (not part time) early got comfortable going from a "producer" to a "consumer" of their assets?

My situation was pretty close to what you are describing and I walked away at 56, a year and a half ago. Never had the slightest problem with the transition once I was comfortable that I have " enough" money. Time is a priceless commodity to me. I'm sure this is a highly individual thing though.
 
I went at 58/59. Never regretted it for a moment. Especially when a former colleague of mine who had a long list of retirement plans dropped dead at 65-one year after he retired. He had been doing the OMY thing for the five years prior to his retirement.

Life is for living. If one has the desire and the financial resources to do it then why wait. You cannot take it with you.
+1
I laughed at the phrase "dropped dead". Not that its funny, but thats soo true , I see it all the time. I did OMY 5 years , What a big idiot I was.
 
Most of the Joes i know make way less. I had to google this one: If an individual makes 150k a year he is ALREADY in the top 4 %. 250k? hahaha top 2 %. The masses are are all waiting for their pensions or age 62 to hit the retirement road. They are not running retirement calculators. They will do just fine.

Mea culpa. The "poor" Jane/Joe was meant tongue in cheek, in light of OP's definition of high earners.:flowers:
 
Mea culpa. The "poor" Jane/Joe was meant tongue in cheek, in light of OP's definition of high earners.:flowers:

I thought you might have been joking, I wasn't sure. But I know lots of folks in here really do make that kind of dough. I wanted to add balance. I see you added the balance before I did:)
 
Question for higher earners who made the decision to RE early as well as those approaching a potential early RE... how did/will you reconcile giving up the bigger income? .... In my case and I would assume the same for most others who have higher incomes, stopping work cold turkey for a year or more would have a significant affect on the ability to jump back in and replace the high income again, if you decided to go back in the workforce. While going part time for some may be an option, in my case, I need to be fully engaged in my business to keep the income level up. I am more curious as to how the big earners quit on their own terms (not part time) early got comfortable going from a "producer" to a "consumer" of their assets?

While I was a high earner, I wasn't that high (but my bosses were). In any event, it is hard to walk away from that big salary and bonus, especially when you know that if the SHTF that it would be hard or impossible to get back in. In my case it was easier since I was an employee rather than an owner I was able to go part-time and ease my way out.

I have a neighbor, BIL and good friend who have each transitioned out of their businesses recently. The neighbor sold his business to a couple long-time but younger employees but is still involved because he owns the building and also finances the inventory (higher end used car dealership)... he essentially sold the business and created a pert-time job for himself... I think it was easier in his case that he and the owners have known each other for a long-time and they respected his knowledge of the business. BIL sold his business to another company and left after a couple months of transition and my good friend is in the process of doing the same.

For me, at the end of the day I decided that I valued having free time more than having more money that the kids will inherit so I resigned.... best decision that I ever made.. I love retirement!

Transitioning from a producer of assets to a consumer of assets is something that most retirees face... it is a hard transtion... however in most cases you are not really consuming assets but rather just spending some of the annual buildup but your assets will still be growing (for example, it returns are 7% and your WR is 4% then your nest egg will still grow... just more slowly).
 
Question for higher earners who made the decision to RE early as well as those approaching a potential early RE... how did/will you reconcile giving up the bigger income?

I'm probably in the approaching category. I'm quite a big younger and I'd guess at a lower NW. I love the work I do to the point that 95% of the time it doesn't feel like work. I have a ton of autonomy -- can largely spend a day as I please, travel when I want, et cetera.

Some of the folks who have posted that it's the same at $150K I don't think could be 100% aware of what it's like. When I make quarterly estimated payments that are in the neighborhood of the median annual household income, I feel so fortunate but there's also a .... nagging ... feeling of what kind of person walks away voluntarily from this? Especially since it's so easy. I have family members who wear running shoes well past their life because $100 isn't in the cards this month, and the next month and so on. And then I realize they aren't poor, but actually probably that median income family.

I know you said you can't scale down but I think you should consider testing or challenging that. I eventually said f(*& it, scaled back, and it ended up fine. In fact, scaling back effectively shot my profit margin up. :cool: Of course I ended up creeping back up since it was more lucrative.

I say: as you approach and pass your number, get more and more aggressive about making your work and role fit around your life rather than the other way around. You might be surprised and even if not, you'll have a more gradual transition. Both in terms of financial (easing from big monthly net positive to eventual net negative) and identity. Like Travelwanted said, I think 100 to 0 overnight would be hard.
 
All you high earners, Please stay in the workforce forever. The Social security fund needs your donations. I will personally thank you. And the high earner will presumably save more money and live even better, its a win -win.
 
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All you high earners, Please stay in the workforce forever. The Social security fund needs your donations. I will personally thank you. And the high earner will presumably save more money and live even better, its a win -win.

LOL -- remember the cutoff is around $127K for most of FICA ;)
 
I spent my legal career in private practice and earned a very good income. I enjoyed my job (mostly) and got on well with my colleagues (mostly). I FIREd in 2013 at 47. My motivation for leaving was not that I disliked my job/career but an awareness that my life is a finite thing and time spent in the office is time that could be spent doing other things that I would like to do (many of which get harder as I get older).



I did go part time (and continue to do some very occasional consulting + HK Law Society committee work), but only because I find it interesting not because I need the money.



For me it was all about retiring to something rather than retiring from my career and it's been great.



+1, except I have actually turned down consulting and Board work. Realized after ER that I don't want to do things that were similar to my career. I enjoyed my career, but similar to traineeinvestor, felt that time with DH, family, friends and the opportunity to reinvent myself were more motivating to me than continuing to work for someone else.

For me, it would have been much harder to leave a business I had created where I was my own boss. While I did enjoy my career working for others, I got a new boss about 18 months before ER. His style was not a good fit with mine, so once a couple of lucrative bonuses paid out, I RE'd. Between the pull of other interests, a horrible commute that I was having to do more often, and a boss I didn't enjoy working for, resigning once I got my bonuses was clearly the right decision for me.

A good friend told me I would know when the time was right. I found this to be very true. Once I was emotionally ready, it seemed obvious that we had sufficient financial resources and that it was time to ER. The time will come when it feels right for the OP. Until then, nothing wrong with continuing to w*rk, especially if one enjoys it more than one can envision enjoying other pursuits.
 
Transitioning from a producer of assets to a consumer of assets is something that most retirees face... it is a hard transtion... however in most cases you are not really consuming assets but rather just spending some of the annual buildup but your assets will still be growing (for example, it returns are 7% and your WR is 4% then your nest egg will still grow... just more slowly).

True but a lot of it is in context. When I was working my portfolio growth was "interesting" but not something I thought too much about.

Now as my primary source of income it is my "new job" (however abstract) that sends me a paycheck on a regular basis. So I still get a paycheck but now it comes from dividends and a touch of cap gains (I know, I know...total return).

Mentally I just turned my portfolio into my 'job'...one that I don't have to go to every day but just have to keep an eye on from time to time. In my case, my portfolio is now more than double what I started with 11 years ago when I first RE'd.

Those who are just starting to first draw from their portfolio may try "contexting" it as income property: The value goes up, the value goes down but (if you've set it up for good dividend generation) the "rent" keeps coming in. You've just traded your regular job for being a landlord! --without those pesky tenants!
 
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From my perspective, the early years of retirement are likely better than later years. You are healthier, have your complete mental facilities, are very mobile etc. By working one more year, you have likely lost the best year of retirement. My guess is that most people on this site are planners and thus are probably conservative and therefore likely working longer than they have to. I struggled with giving up the high income, but don't regret getting out at 53. Once you cover your expected expenses, with factors of safety get out. How many good years do you have left:confused: JMHO
 
. Once you cover your expected expenses, with factors of safety, get out. How many good years do you have left:confused: JMHO

+1 I've told this story here several times, but it really made a huge impact on me:
We ran into an older gent --80ish--at a restaurant bar and started chatting. He asked how old I was. "60" I said.

He said: "Do you realize that even if you live to be 90, you only have 15 good summers left? Eighteen at the most! After that, things start to go south and it's a lot less fun and you don't want to do as much anyway."

I still view that man as one of those angels who appear with a message and then you never see them again. It hit me like a 2X4!
 
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We did a test run. We had been single income for 25 years since my DW left the workforce when our 2nd child was born. We budgeted ourselves to our projected retirement income, about 25% of my working income, for about 3 years before I finally retired. No regrets since we don't need more "stuff'. If you are 55 and choosing to work OMY for money you don't really need, you have traded the best 5% of the "rest of your life" for no real reason.
 
Shanky...that is exactly why we made the decision to FIRE.

We looked at how many good, healthy years left we had...years in which there would be no health impediments, etc. to doing what we wanted to do.

At that point we determined the cost (to us) of one or a few more years was too high.. We moved forward to early retirement.
 
True but a lot of it is in context. When I was working my portfolio growth was "interesting" but not something I thought too much about.

Now as my primary source of income it is my "new job" (however abstract) that sends me a paycheck on a regular basis. So I still get a paycheck but now it comes from dividends and a touch of cap gains (I know, I know...total return).

Mentally I just turned my portfolio into my 'job'...one that I don't have to go to every day but just have to keep an eye on from time to time. In my case, my portfolio is now more than double what I started with 11 years ago when I first RE'd.

Those who are just starting to first draw from their portfolio may try "contexting" it as income property: The value goes up, the value goes down but (if you've set it up for good dividend generation) the "rent" keeps coming in. You've just traded your regular job for being a landlord! --without those pesky tenants!
I can identify with your point of view. Portfolio returns, especially divs, feel like income and make it easier to spend, at least up to the divs. Over time, if the markets do well, it gets easier to "encroach on capital". I also know it's total returns that count, but I still like receiving those divs.
 
We did all the usual things prior to FIRE. Did a tape on two or three years of after tax spend. Incremented that with lots of travel budget dollars, added 10 points for inflation and anther 10 points for buffer.

Bottom line....after five years, lots of travel, our net worth has increased substantially. I did not anticipate this, even after netting out the potential tax implications of dispositions. So glad we pulled the plug and changed our lives.
 
My exit was planned. I told my boss in 2009 that I would need to leave and go back home to the US at the end of 2012. My daughter was graduating HS in 2009 and would graduate college in the spring of 2013, and would likely be married by about the same time. We did not want to be working overseas when grandbabies came along. Further, I knew what my income would be, and I knew my basic expenses (in Japan) so I knew pretty much how my savings would grow, from the input side, but not from the capital appreciation side. So I had a rough idea of where I'd be at the end of 2012. I knew it would be enough. My income including base, cost of living allowance for living in Japan, bonus, and stock plan was well into the seven figures, with well over half taken in Japan, US and California taxes. Basically we lived on the cost of living allowance, while all our friends were using their COLAs and their salaries in very extravagant living as expats.

At the end, however, when the sense of inevitability became overwhelming, I'll admit to trying to grab at every branch and weed as I went over the cliff. I knew I had enough. That wasn't the problem. Everything I knew, everything that I was, my entire social network, my professional identity, my friendships, all of it, circling the drain. My replacement wasn't ready, and was in fact a failure. I begged for another year to set that failure right...I didnt want to leave my legacy without a strong leader. At the end of the day, the answer was "no". A new person from overseas was hired...someone who knew nothing of the market, but who was familiar with a new global strategy the company was trying to implement.

So, I got on the plane and went home, as had been planned. The company kept their promises to me. I kept my promises to them. I watched their results for 3 years, and couldn't take it any more, sold all of my remaining stock, and don't look at them much anymore. The results have been awful. While I was on my non-compete period, I was approached by a couple of firms that wanted me to go back to Japan to replicate my successes there, and to do the one thing I wanted to do but never had the chance to do. But it was during my non-compete period. I asked them if they'd wait out my non-compete I'd do it, otherwise my integrity would not allow me to participate. So I missed that chance because of 6 weeks left on my non-compete. That is the only job I would have taken, because of the chance to do something I'd wanted to do.

All in all though, I'm glad I'm out. Once I was actually out, that circling the drain feeling went away, and I mostly found other things to do to keep my mind occupied. We still have plenty financially. I do get bored from time to time. But it never lasts long. I do want to go back to work from time to time for the sense of accomplishment, but when I think of the rigidity, the always-on lifestyle I had, I shudder at the thought. Now, for the most part, its just me, DW, and the dogs. We see DD and DSIL about every 2-3 weeks, which will dissipate now that she is going to have a baby in a few weeks, because they live too far to visit that often, and they are likely to move further away in the next 6 months.
 
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