Should I have Quit? Is it too late for a sanity check?

[panhead]

This has certainly been an interesting thread to follow, being that I am also 42 and trying to plan an ER in the next few years. I've been waiting for scrabbler to kick in, as he retired at an early age as well.
Anyway, my (current) plan is more 'bucket' oriented as scrabbler's is, and it might be useful for the OP to look at it more like this. If I take out 200k (ish) for a paid for house, he has close to even money in taxable and retirement accounts of about $1M each. My thinking is that I should never exceed 4% withdrawal from my taxable, never exceed 3% from my overall port (tax and non/deferred), and never touch retirement accounts before 60 (ok, 59.5). If the OP takes this approach, it will limit his withdrawals to about $40k (minus taxes, tho likely negligible due to post tax and div/int income). If he and/or DW can add to this thru work, or reduce expenses to this in times of no work, then I would say they are good to go. The advantage here is that when you turn 60, you get a nice safety net kicking in that you can decide what to do with then (part SPIA, take div/int only, 4% draw, etc). Plus, you have SS coming in a few years. Yeah, I know, you don't want to count it, but count "something". Take 50% off what you are supposed to get and use that, the chances you will get nothing seem very unlikely. Then medicare will kick in and help, etc.
I like this approach, b/c if I screw everything up, I still have the money that was earmarked for retirement there. So if I retire early and everything goes to hell, I could pick up a part time job to bridge the difference from my SWR. I am also considering working longer so I can set my withdrawal at just div/int income until age 59.5

So I guess, if I were him, I'd try to see if I could set a liveable spending rate at about 40k/year, if there is no income from DW or him. If this is possible, I think I'd be cool with staying retired.

DISCLAIMER: I ain't retired yet, and the closer I get, the further away the line moves....

 

[panhead]

One more comment: Ha, it has been enlightening to read your take on this whole thing. You are right to point out the obvious biases, and your addition of personal experience and insight has been enlightening. Potential ERs of my age need to take a hard look at some of what your experience dictates and factor it in as appropriate. You have "been there and done that" and even though no experience will be the same, this is very valuable information.

 

[Tyro]

I have always wondered how these rich CEO's can work into their 80's, and the best response I ever heard to that question was "lack of imagination." I love that. Imagine your dream life and then live it.

Does that mean you think they aren't, or that they are?

(I'd like to think I have the imagination to think of many reasons certain people work -- not w*rk -- late into life, and some have a lot to do with having imagination.)

Tyro

 

[H2ODude]

Really interesting thread. It underscores for me that everyone is different. Given unlimited funds/security I would not have retired pre late 50's (did recently, now 61) perhaps for lack of imagination but realistically because I actually enjoyed what I did and thought it was a reasonably important contribution to the world. A lot of the discussions here seem to surround an intense desire to not work and get out of the race ASAP, and that's what I guess you'd expect from an ER board. Some seem motivated by a desire to pursue other goals, others just want out. I recall raising my kids encouraging them to seek careers that they actually might enjoy, as they'd be doing it a long time. I wouldn't trade my employment for 2x or 3x if I would not have enjoyed it even if it would have allowed to not do it a lot sooner than what I was doing.

All that said, circumstances took the enjoyment out of what I was doing, I made a change, and then did not like that at ALL so now am pretty much retired and very FI, SWR about 2% and no scrimping. I have NO desire to go back to anything I've done before, but cannot say I'm thoroughly satisfied with what I'm doing now as there are family responsibilities restricting DW and me. So I come to this board to gain insight. It seems to me that it all boils down to how bad do you want out, and what level of risk are you willing to accept. Anyway, I enjoy coming here to see the wide range of opinions and states of mind that drive us all!

 

[Tyro]

I recall raising my kids encouraging them to seek careers that they actually might enjoy, as they'd be doing it a long time. ....

All that said, circumstances took the enjoyment out of what I was doing,

All too often, that's the story. Some DO love what they're doing for many years. Then comes a rough spot, and they figure it's worth toughing it out for the potential gain/improvement. You don't quit just because of a rough spot, right? By the time they figure out things aren't going to change, it's too late; they're locked into homes, communities, school districts, pension points, benefits.... LIFE, and there's more to lose than there is to gain by making a change and/or starting over. ONE solution is to figure out how to RE, FI, and then find the joy in life again.

...and then sometimes stuff happens,and you find ER foisted upon you.

 

[midlifeguy]

Tyro -- I think the reason some millionaires and billionaires (Rupert Murdoch, Sumner Redstone, even Warren Buffett?) work into their 70's and 80's is "lack of imagination" meaning they can't imagine anything else they want to do or could do. I'm all for loving one's job and career, but really? You need to make another $100 million? You have no other passions or dreams or interests, not even anything that warrants a leave of absence? I will never get that.

 

[NW-Bound]

These billionaires got where they are because they are good at what they do, and also because they enjoy it. I don't think it is any different than singers, musicians, or artists who want to keep doing what they enjoy for as long as possible. Who's to say that, while working, they do not also enjoy some leisures like travel, good food and drink, the opera, the arts, and sports, etc...?

If I could make loads of money the way they seemingly are able to do so easily, I would not quit either.

PS. Ah, I just thought of one thing I can do that the above men could not do. They could not take off for more than a month for an RV trek while staying incommunicado.

But then, many retirees here say that they would not care about RV either. So, what is it that a retiree can do that these billionaires cannot?

 

[Tyro]

Tyro -- I think the reason some millionaires and billionaires (Rupert Murdoch, Sumner Redstone, even Warren Buffett?) work into their 70's and 80's is "lack of imagination" meaning they can't imagine anything else they want to do or could do. I'm all for loving one's job and career, but really? You need to make another $100 million? You have no other passions or dreams or interests, not even anything that warrants a leave of absence? I will never get that.

I don't agree that they can't imagine doing anything else; I DO agree they don't want to do anything else.

People with extraordinary talent tend to do what they do until the end of their lives. These guys talents just happen to lie in the creation and accumulation of business empires & wealth.

 

[Khufu]

I'm a bit surprised at the folks who say he should keep working. Not disagreeing, just surprised.

If 2+ million bucks and a 3% WR isn't reasonably sufficient for ER - I wonder what is? That's not too far from what I'm shooting for.

I do get that Healthcare can be a wildcard.

SIS

Basically, no one has any idea what a safe withdrawal rate would be for a couple retiring at age 42. Most of the discussion of SWR comes from the Trinity study, but that study only considered the retirement of a 65 year old. As a matter of fact, I find the whole SWR concept to be useless for planning retirement. I assume its popularity is entirely due to its (excessive) simplicity.

I think the OP's retirement is dangerous and ill-considered. My advice to him would be to take advantage of his strong financial position to transition to a job that he enjoys and pays less than his career job. Just having some income and benefits going forward would reduce his long-term risk substantially. Otherwise he will soon have no market value, the American workplace being what it is. And that means that he is cutting off his options very early in life and will be at the mercy of events that none of us can foresee.