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Old 02-11-2024, 11:16 AM   #21
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Because I had twice reduced my weekly hours worked during my 7-year part-time era, my annual wage income was already pretty low by the time I ERed in late 2008. I cashed out my company stock when I ERed and invested it into a bond fund which generated about the same in dividend income as the wage income it replaced, a key part of my overall ER plan. So, I was basically living on the same income I was living on during the last year I worked.
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Old 02-11-2024, 11:23 AM   #22
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I planned that our net retirement income was equal to our net working income. So no "income" lost, we just stopped paying the higher income taxes and contributions to Roth, 401k and 403b...
That's exactly what my plan was before retiring in 2013.
Except my income taxes didn't go down. I just paid a bit over $35k FIT for 2023, filing Single...
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Old 02-11-2024, 12:12 PM   #23
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I calculated the current value of my opportunity cost at about equal to my NW when I quit vice working to 57 (Gov't minimum retirement age). Not an insignificant amount!



My "income" was the same as several years prior I had my paycheck deposited directly to Vanguard and had an auto transfer from my Vanguard MM to my checking so the "paychecks" never ceased... day to day was transparent.
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Old 02-11-2024, 12:26 PM   #24
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I was living on 51% of my w$rk income in my last year (saving 49%). The year I retired, I tripled my spending. This year (year 4 of ER), I'm at 5X. I would not retire if I could not match the standard of living I'd be happy with, unless health problems hit.
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Old 02-11-2024, 12:50 PM   #25
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Interesting question, but as with most questions of this type there are many nuances.

When I hit Coast FI at age 50, I went from $200K ($140K salary, $30K bonus and $30K in profit-sharing) to a $60K salary at a nonprofit, figuring they'd appreciate me for who I was, what I can do, and what I brought from the real world. It was a MASSIVE mistake.

After being terminated for nothing that had to do with my job performance, I returned to the for-profit world and made $135K a year consulting part time in 2022 and 2023. That work has dried up significantly in the past six months, so this coming week I'm interviewing for a government position that pays $80K but comes with good health insurance, etc.

I'm coming up on 57. I'm trying to make it to 59.5. I'm probably fully FI now, so I'm not sure I "need" the government job, but I am looking forward to the interview process. I have not gotten interviews for four other positions I applied for -- one in the private sector, three in government. I'd like to know where I'm at in the market.
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Old 02-11-2024, 01:16 PM   #26
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As far as the IRS was concerned it was pretty close to being a wash with increased dividends and Roth conversions.

Before I retired, I allowed myself very little funds for "discretionary" spending - it was all ear-marked, i.e. retirement savings, taxes, tuition, homeowner's insurance, etc.
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Old 02-11-2024, 01:45 PM   #27
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Recently ER'd. Question is very open-ended (perhaps intentionally), so really depends how I look at it. In terms of one year of income, the "loss" would be upper six-figures. In terms of lost opportunity in wages, stock options, bonuses, etc. relative to working a handful more years (as had originally intended), the "loss" would be several million.

First few days my brain was kinda split:

Left Brain: "Whoa! Dude, what did you do? Did you really just walk away from that much money? WTF? You really need to consult me on those kinds of decisions"

Right Brain: "Hey, leave him alone. He's had enough. You know they weren't treating him very well and he needs to start living life and smelling the roses and stuff."

LB: "STFU, you don't know what you're talking about. He loved that career. Look at everything he's accomplished, now he's leaving all that on the table."

RB: "Well, he can't take it with him. That job probably already shaved a few years off his lifespan from the stress and sleep deprivation"

LB: "So, what. He's not gonna wanna live if he's poor anyhow"

RB: "He's hardly going to be poor. You're just being hysterical"

LB: "What You calling me hysterical? You gotta a lotta nerve. You do know I'm the left brain in this picture don't you."
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Old 02-11-2024, 01:52 PM   #28
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Recently ER'd. Question is very open-ended (perhaps intentionally), so really depends how I look at it. In terms of one year of income, the "loss" would be upper six-figures. In terms of lost opportunity in wages, stock options, bonuses, etc. relative to working a handful more years (as had originally intended), the "loss" would be several million.

First few days my brain was kinda split:

Left Brain: "Whoa! Dude, what did you do? Did you really just walk away from that much money? WTF? You really need to consult me on those kinds of decisions"

Right Brain: "Hey, leave him alone. He's had enough. You know they weren't treating him very well and he needs to start living life and smelling the roses and stuff."

LB: "STFU, you don't know what you're talking about. He loved that career. Look at everything he's accomplished, now he's leaving all that on the table."

RB: "Well, he can't take it with him. That job probably already shaved a few years off his lifespan from the stress and sleep deprivation"

LB: "So, what. He's not gonna wanna live if he's poor anyhow"

RB: "He's hardly going to be poor. You're just being hysterical"

LB: "What You calling me hysterical? You gotta a lotta nerve. You do know I'm the left brain in this picture don't you."
That is a conversation best had before retirement, not after. The whole point of retiring should be tranquil.
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Old 02-11-2024, 01:53 PM   #29
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That is a conversation best had before retirement, not after. The whole point of retiring should be tranquil.
Yeh, but the problem was that left brain would always convince me to do OMY. so, I kinda just had to jump without looking too hard. The price of freedom was always going to be very high.
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Old 02-11-2024, 08:20 PM   #30
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If you are already FI, then no money is left on the table. You have met your goal. If the tank is full anything additional overflows. Time on the other hand..........
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Old 02-11-2024, 08:40 PM   #31
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I retired just over 5 years ago, withdrawing just under 3% per year. Since retiring, my networth has increased 25%. It doesnít feel like Iíve left anything on the table, yet all my time is now mine. I feel like Iíve won the game.
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Old 02-11-2024, 10:37 PM   #32
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DH was a high earner. I encouraged him to walk away at 49/50 because he was fried. I do care that we left alot on the table.... but not more than I value him. His mental health is much more important to me than $. Yes our assets would be several $M more today if he'd stayed in his corporate grind... but we have not one regret! Best Decision. It took about 4 years for him to fully decompress. He's happy, we're happy... so it's the best couple $M we'll ever spend. I'd do it again in a heartbeat.
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Old 02-12-2024, 02:01 AM   #33
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I generally don't regret retiring when I did as my quality of life significantly increased. And I generally don't miss my employment income as a means to pay for my share of our spend because of how I'm turning on the income taps from my savings now.
But I do miss the savings from my employment income giving my nestegg a bit of a shot in the arm when my investment returns are subpar. I missed out on some unvested stock options when I retired. And my megacorp did significant layoffs approximately a year after I retired. They normally give a 1.5 years of severance for employees with more than 10 years with the company. I hate leaving free company money on the table.

In the year before retirement, my income was roughly allocated as follows:
27% taxes, 23% spending, and 50% savings. While I feel we were in a state of Coast FI we were still pretty intentional with our spend and weren't splurging excessively.

Transitioning into year 2 of retirement, I've been slowly turning on the taps. Currently the dividends from my taxable account are more than double what my spending was pre-retirement which covers price inflation the last few years in addition to some lifestyle inflation. Taxes are much lower. I'll eventually start tapping into my different (tax-deferred) retirement accounts (which are more index etf focused) over the next few years.

So while it was kind of scary not having the safety net of a regular employment income stream, for me, having a steady dividend stream large enough to cover my historical share of the spend has been kind of nice to maintain a sense of familiarity and not miss a beat.
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Old 02-12-2024, 05:52 AM   #34
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It's kinda the point of retirement - you've chosen to "give up" income from employment and to replace it by cash flows from your savings, SS, Pension or whatever other passive sources you might have.

My own loose target was to replace my after-tax spending capacity 1:1. The reality is that I'm finding we have more spending capacity than I was expecting - at least so far. Some of that was because I underestimated the effect of our kiddo getting off our books when she graduated college and was launched. And some of it is because from the day I gave notice at work until the day I actually left turned into something like 15 months due to taking more time to find my replacement than expected. This got me through several more rounds of RSU's vesting, more rounds of ESPP and annual corporate bonus, all at a time when my former employer's stock was up...

Cheers
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Old 02-12-2024, 07:09 AM   #35
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I was living on 51% of my w$rk income in my last year (saving 49%). The year I retired, I tripled my spending. This year (year 4 of ER), I'm at 5X. I would not retire if I could not match the standard of living I'd be happy with, unless health problems hit.
The part I bolded above was a crucial, unbreakable condition for me to ER. I don't spend a lot of money, but if I decide to go on a small spending spree once in a while, I know I can do it without disrupting my overall budget. This was the case both before and after I ERed.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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Old 02-12-2024, 07:37 AM   #36
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Question: How much annual income did you give up the first full year after you FIREd?
I knew I was ready to retire when the answer to that question didn't bother me.
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Old 02-12-2024, 07:42 AM   #37
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DH was a high earner. I encouraged him to walk away at 49/50 because he was fried. I do care that we left alot on the table.... but not more than I value him. His mental health is much more important to me than $. Yes our assets would be several $M more today if he'd stayed in his corporate grind... but we have not one regret! Best Decision. It took about 4 years for him to fully decompress. He's happy, we're happy... so it's the best couple $M we'll ever spend. I'd do it again in a heartbeat.
Lol, you've clearly been talking to my DW!
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Old 02-12-2024, 07:45 AM   #38
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I generally don't regret retiring when I did as my quality of life significantly increased...
THIS is the part I'm trying to focus on!
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Old 02-12-2024, 08:27 AM   #39
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For me, retirement was less about "how much income are we losing?" and more about "how much can we spend?" If I was concerned about losing income, I would still be working .

Comparing the 5 years before (my income varied based on awards and bonuses) and 5 years after retirement, our income dropped 57% But in the 5 years before retirement, our savings rate was 36%, so we did not "need" all of that income to live. Our spending on ourselves (which does not count taxes, charity, and gifts) is slightly down between the two periods, primarily due to 2020. In retirement our assets are still much higher than we retired. So the "loss" of income has not impacted our desired living style.
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Old 02-12-2024, 11:16 AM   #40
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My ER was involuntary so I didn't 'give up' anything....it was taken away.

But I did have a 'platinum parachute' that softened the blow for a few years and I was making obscene money at the time so it was about 3X above our spending needs. We essentially were able to coast on that parachute for about 5 years.

Meanwhile, I tapped into a family fund that I hadn't touched for decades and we had our investments, so in the end, after cutting a few unnecessary things, we never really skipped a beat.
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