What if your career pays too well?

[explanade]

Actually, the answer is (IMO) that "you can't take it with you". Unless a ever increasing total number satisfies your life entirely in spite of the cost, go do some other things before it's too late.

Well he could up his budget, first class flights, luxury hotels, more cars, etc.

 

[Jay_Gatsby]

50-55 is a sweet spot to retire.

You also have limited amount of healthy years. So if you continue working pass 55 you have to ask yourself if it is a shame to let so many healthy years go.

This is the tipping point where time > money and why LBYM is so important.

 

[Danmar]

This is the tipping point where time > money and why LBYM is so important.

Agree. When the hassle of working is worse than the advantages of extra money saved, it's time to retire. I retired at 56 from a senior job paying 7 figures. But since I was LBYM'ing for many years, I had amassed quite a nice nest egg. Having a little extra is better than being close to the line in retirement, but only within reason.

These retirement decisions for high earners are usually taken in conjunction with your employer. It took about 3 years of planning and training my successor to effect my retirement on good terms with my employer. That made things work out a lot better.

 

[CSdot]

Great responses. I do corporate law, so the idea of part time work is certainly an option. I have friends who tell me I can hang a shingle at their firm because they think my name will draw business to them (I also hold elected office).

Other options might be part time judge (my wife does this part time currently), or adjunct at the local university.

 

[6miths]

No matter what one's income, money is going to get 'left on the table'. Unless the plan is to fall down on the job one day and I'm not getting that feel from this group. Many of my colleagues are bound by the golden handcuffs and were shocked when I packed it in just shy of my 53rd birthday. LBYM is the key. Having some quality years to live at the end was my goal. So far so good!

 

[bingybear]

I'd like to throw this out, does this really have anything to do with income from the job? If you've done your planning and the numbers work out... what would the job's income matter. Now if you say... I can work longer, pick up some good cash, and then spend more in retirement. Then maybe you did not estimate your spending in ER very well.

Or maybe you associate your value (self esteem) with what you do or how much you make. Your position at work may be your identity.

None of these are wrong, just understand your reasons. Understanding these will help you plan.

 

[Big_Hitter]

50-55 is a sweet spot to retire.

You also have limited amount of healthy years. So if you continue working pass 55 you have to ask yourself if it is a shame to let so many healthy years go.

IMO, a legal career is a different animal - it's a lifestyle to most big law firm partners I've known - they work forever

 

[brett]

There is a lot of time between now and then. You may want to make some tentative plans but my guess is that events could take over. Too early to say.

But, I retired at 58. I was highly paid but under lots of pressure and stress...the fun had left the business for me. Four years later not one regret. Lots of travel, do what we want when we want. I was reluctant to step away from the business and from the income. We decided that we had enough financial resources to have a comfortable retirement.

A former colleague waited until he was sixty five. He could have gone earlier. He was in good health. He dropped dead six months ago, less than a year after his retirement. I know that he had many retirement plans.

Play it by ear, see how you feel in five years.

 

[copyright1997reloaded]

Somewhat different story here. Retired at 51 in 2009 (started when I was 20) from a good job in the IT industry. Took a year off, then did some consulting, then started teaching (college level) part time, now working full time teaching.

Do I regret retiring in 2009 and giving up the $? Not for a second. Do I regret now working...for a lot less money? (Only during grading final grades ). While I make a lot less $ now, I don't need to work financially. I love what I'm doing,like the mental stimulation, and I love having the summers off.

For me, this works. I also have a child who just became a teenager, so I am somewhat fixed to the area while he is in school. Doing this is pretty ideal in terms of having time with him. When he is old enough for college, I might end up retiring again (in order to do a lot more travel.)

 

[ElizabethT]

I'd like to throw this out, does this really have anything to do with income from the job? If you've done your planning and the numbers work out... what would the job's income matter. Now if you say... I can work longer, pick up some good cash, and then spend more in retirement. Then maybe you did not estimate your spending in ER very well.

Or maybe you associate your value (self esteem) with what you do or how much you make. Your position at work may be your identity.

None of these are wrong, just understand your reasons. Understanding these will help you plan.

This is completely in line with our approach/thoughts. Our combined income our last decade in the work force was closer to seven figures than six, but since we lived on just 20% or so of the net, with the other 80% being directed into savings/investments, it was not the hugh stumbling block some might think when making the decision to FIRE. We never lived a closer-to-seven-figure-than-six lifestyle, so there were no lifestyle adjustments when we pulled the plug. Hence, at the end of the day the size of the paychecks simply wasn't relevant, other than getting us to FIRE much more quickly than we might have otherwise. That we continue to appreciate!

 

[daylatedollarshort]

but since we lived on just 20% or so of the net

That is a good example of freedom is low overhead, or in your case at least low overhead relative to your household income.

 

[DonL]

if you already have enough saved, and you really want to retiree .............. then the answer to the original question is that you just do it

 

[Danmar]

This is completely in line with our approach/thoughts. Our combined income our last decade in the work force was closer to seven figures than six, but since we lived on just 20% or so of the net, with the other 80% being directed into savings/investments, it was not the hugh stumbling block some might think when making the decision to FIRE. We never lived a closer-to-seven-figure-than-six lifestyle, so there were no lifestyle adjustments when we pulled the plug. Hence, at the end of the day the size of the paychecks simply wasn't relevant, other than getting us to FIRE much more quickly than we might have otherwise. That we continue to appreciate!

I understand your point and agree to a degree. In our case we saved a lot during our last 10 years as well. Maybe around 80%. But this was represented by equity based incentive comp/low cost employee loans. Since this aspect of my comp was around 2/3 of total comp, it wasn't much of a challenge to save for retirement. During the last 10 years of working my employers stock increased about 5-6 times. So although we certainly LBYM'd for this period, we generally spent the cash component of my comp.

In our case, spending in retirement was more a function of how much we ended up with, rather than a bottom up expense plan(although I certainly had that as well). Retirement happened when I simply really didn't enjoy the work any more. As I mentioned before, this took about 3 years to effect. Good thing because just after retirement in 2006 we got the financial crises. In the end things worked out fine but resources were certainly reduced from the peak. Our spending in retirement has been more than when we were working but generally only represents pension and divs. I know this is not a common position to be in and how how lucky we are (as is the OP).

So my advice to OP would be stick it out as long as you can(within reason) because being quite young, your optimal spending level in retirement could be quite different than you might think at this point. A flexible retirement spending plan is desirable, and working longer (within reason) can enhance this flexibility.

 

[athena53]

This is completely in line with our approach/thoughts. Our combined income our last decade in the work force was closer to seven figures than six, but since we lived on just 20% or so of the net, with the other 80% being directed into savings/investments, it was not the hugh stumbling block some might think when making the decision to FIRE. We never lived a closer-to-seven-figure-than-six lifestyle, so there were no lifestyle adjustments when we pulled the plug. Hence, at the end of the day the size of the paychecks simply wasn't relevant, other than getting us to FIRE much more quickly than we might have otherwise. That we continue to appreciate!

That was DH's and my story, but a lot closer to six figures than seven! When we married, I was 50 and still working; DH was 65 so he retired and started collecting SS. We'd moved for my career, to a LCOL area, and he was in advertising- not a great place to job-hunt at age 65.

We saved most of his SS and a healthy % of my income, with good employer matching contributions. I had planned to work till age 65 but walked out at age 61 last year when I couldn't stand the political BS. According to some pretty reasonable projections, we'd have had over $1 million more if I'd worked 4 more years but I'm pretty sure that all of it would have gone to my heirs. DH and I just don't spend it that fast.

For us, a high-paying job was just a ticket to earlier freedom.

 

[kcowan]

DW and I were making more than ever in the final years. The key was to focus on 2 things:
1) How many years do we have left to live?
and
2) Can we manage to maintain our lifestyle?

Initially I had to manage the portfolio by investing in momentum stocks. This took a lot of time and I got quite good at it. (This was in 2002, just after the 2000 meltdown.)

Then my broker retired and I decided it would be too hard to break in another broker. So I abandoned momentum investing in favour of value investing using a discount brokerage. That lasted for another four years and then it was on to dividend investing. We still held some old momentum stocks and were very happy when Apple introduced its dividend! We had held it since 2001 as a momentum stock.

Then we decided to buy a snowbird place and our annual costs declined by 40% by spending 6 months there (in PV). Now we can ease off and enjoy life.

(And to bring it back to topic, we were only spending 30% of what we were earning when we retired. Leaving was hard but the answer to question 1) dictated doing it when we did.)

 

[Lisa99]

I haven't read this entire thread but when you watch good friends die before the age of 50 of cancer and heart disease, what money means changes... or it did for me anyway.

My attitude toward work and money has changed a lot since joining this forum and my approach right now is that I am going to retire this year (at age 54) and do everything I can to make our money last.

Worst case scenario, I tap my contacts and go back to work, probably part time to bridge the gap. I have an in-demand skill and a lot of contacts so not worried about finding something if I had to... knock on wood.

 

[Toocold]

We're similar ages and situation in which we make good money. We live frugally -- we're minimalists by heart, and 75% of our expenses are covered by dividends generated from after-tax investment accounts. Technically, after accounting for passive income, we need less than 5% of our gross work income to cover remaining living expenses, so it would be relatively easy to retire right now.

I've come to the simple conclusion that I'll continue to work, as long as I find it stimulating, and if I don't, then I will leave. I don't believe that you should choose early retirement for the sake of early retirement or stay working because you can get more money (once you cross over the FI point). You should leave when there is something better to do with your time.

 

[Spanky]

I've come to the simple conclusion that I'll continue to work, as long as I find it stimulating, and if I don't, then I will leave. I don't believe that you should choose early retirement for the sake of early retirement or stay working because you can get more money (once you cross over the FI point). You should leave when there is something better to do with your time.

Agreed - but this is a ER forum. The mantra is to leave work and start enjoying life once FI is reached as life is too short and there's always something better to do than working.

 

[kcowan]

It is amazing how those of us retired wonder what it was about work that had us fooled!

We thought we liked the challenge, only to discover that that was a myth.

 

[REWahoo]

It is amazing how those of us retired wonder what it was about work that had us fooled!

We thought we liked the challenge, only to discover that that was a myth.

Whoa! Ixnay on the ythmay talk.

No need to depress our still-at-w*rk members...

 

[kcowan]

Now my challenges take a lot more thinking before I take them on. Mainly how can I get this done with the minimum effort!

 

[Jay_Gatsby]

If you enjoy what you do, there is no need to retire - unless you want to do something else. Many folks want to travel more, but feel that they can't because of w*rk responsibilities. If this is actually true, then restructuring your w*rk life is in order so that you can travel more without quitting. This may mean you train a 2nd in command, delegate more, etc.... Some high-earners won't let go of the control that an overfull w*rk plate represents. Unfortunately, letting go will happen - the question is whether that will occur voluntarily (on your own terms) or involuntarily (health).

 

[kcowan]

The only thing that holds us back from travelling more is our 17 yo cat who acts like a kitten. His brother died 2 years ago under suspicious circumstances. But enjoying what you do is all relative!

I used to enjoy building stuff like an addition to our house. Or solving a complex business problem that eluded others. Now I find that stuff too much like w*rk. Sure it was satisfying but that too is elusive. Soon you need another fix and on it goes.

 

[Danmar]

The only thing that holds us back from travelling more is our 17 yo cat who acts like a kitten. His brother died 2 years ago under suspicious circumstances. But enjoying what you do is all relative!

I used to enjoy building stuff like an addition to our house. Or solving a complex business problem that eluded others. Now I find that stuff too much like w*rk. Sure it was satisfying but that too is elusive. Soon you need another fix and on it goes.

Agree that what you enjoy can change over time. The secret I think is to ensure you enjoy something and do a lot of that. I don't like doing anything that feels like work now. Even volunteering sometimes feels like work.
I did enjoy working when I was in my 40's but once I hit my 50's and became FI things changed. I changed not them.

 

[kcowan]

Even volunteering sometimes feels like work.

Yes every volunteer organization seems to need and extreme makeover. As a result, I tend to keep my involvement to a minimum, mostly money.