35 Year Old - What would you do?

[cfischer]

You sound similar to me - I was right around you were at that age. My income increased significantly in the last 5 years and I've moved into the management ranks. At 27, don't hesitate to invest in yourself if that will help (be that an MBA, advanced degree, or other means.)

As far as Mom, I'm effectively her financial advisor. She fully plans/wants to give all of this money to us, so we're doing it in a tax efficient manner (read: slowly.) Short on that, as you said, dividing it by 5 means less of a windfall, and I don't factor this in at all.

I'm hoping to be retired well in advance of any inheritance I would get.

I am now/will likely be in a somewhat similar position to you at your age as well.

I can't give solid advice but I have had many similar thoughts that you have had. I am 27 with a NW ($310k) and income ($85K) much lower than yours, but I suspect by 35 I will have around the same NW as you (and hopefully the same income! ). My parents are also affluent with a NW of about $5m but they live fairly frugally for their NW (only spending $100-110k/year). I spend about $4k a month max (likely less) in after tax money, so would also need about a $2m portfolio to support a 3% SWR.

I have thought my future plans countlessly over and over again given my situation. Given my current portfolio and annual savings rate, I might not reach $2m (in today's dollars) until my ate 40's, assuming my pay only increases with inflation each year. However I am confident I will be promoted and will be due for some sizable promotions which will increase my savings, but I don't factor that into my modeling.

At any rate, I basically have come up with three scenarios for me, which may apply to you too:

1) Work until I can support a 3% SWR (basically until 45-50).
2) Work until I have enough assets to withdraw 5-10% a year with the idea that I would inherit more funds later in life. Obvious there are inherent risks/tough decisions involved with this one.
3) Do #2 above, but find part time work so that I am essentially only withdrawing 3% a year.

Of course, there are pros and cons to all of the above. #1 is the least risky but #2 and #3 provide more freedom. #2 and #3 would also involve some family estate/inheritance conversations with your mom which might not be welcomed - it all depends on how close you are with your mom and what you think her plans would be for the money. The conversation may be very welcomed and well received by her. Or, it may be very unwelcome. I haven't had any inheritance talks with my folks, but I will say that they are very impressed with my disciplined savings and the fact that I haven't frivolously blown through my trust fund that they gave me. Another thing to keep in mind is that you have 5 siblings, so that $3m won't go nearly as far divided 5 or 6 ways.

#2 and #3 above also would give you freedom to spend more time with your mom in her old age (think, spending a winter in FL with her), which would be invaluable, of course, and something you could never replace.

 

[nash031]

So part of the way I'm thinking about that early 40's - 50's timeframe. I place a lot value on that, because (hopefully!) I'll still be young enough to explore activities that require physical fitness/endurance, which may be harder to do at 50+. Counterbalanced with those being "peak earning years" and not wanting to ever stress about money. Not an easy call.

This is pretty much the balance I'm going for. Given ten more years of earning and saving, I'd still get out at 48 or so, but with plenty of money to live very comfortably, even with a few luxuries, and have plenty of time with the fam. Seems like a good balance. Getting out really, really early appeals to some parts of me, but I think that's a largely emotional side, and I think - more and more - that I'd like to try something else as a bridge, more along the lines of what interests me, not just what pays me.

 

[Sojourner]

Cfisher, your situation reminds me a lot of my own when I was just a little older than you. I had a very high-paying job in engineering which I generally didn't mind, but soon after I turned 40 some things started shifting around in my thinking about life and my career. It felt sort of like I was waking up from a long dream, a dream where I was this robotic being walking on a treadmill with no conscious thought being given to what I was really "doing" with my life. Anyway, after several years of soul-searching and number crunching (and browsing this forum!), I decided to leave my lucrative job at the ripe old age of 45, once I had amassed what seemed like a safe number to fund my fairly modest lifestyle. Like you, I'm not married and have no kids, so that made the calculation easier.

I think if you work until you're, say, 42 or 44, and build up your finances to the point you're completely good to go with a 3% WR, then the money part is all set. The things you'll need to focus on then will be the psychological aspects, such as how will you continue to stay engaged socially with the world and what will you do to provide yourself with a continued sense of accomplishment and meaning, etc. Retiring in your mid-40s comes with some notable challenges, but if you can anticipate those types of things and plan for them, you'll likely be very satisfied with the outcome. If you don't, you may find yourself feeling somewhat adrift and a bit empty inside, especially if you were very engaged in your career for many years prior. It can be a tough transition, so definitely give some serious thought to the "what will I do all day" question well in advance of your last day in the office. Good luck!

 

[cfischer]

Your situation sounds extremely similar, and good advice all the way.

Let me ask then - how happy are you with your decision? What do you do all day?

Cfisher, your situation reminds me a lot of my own when I was just a little older than you. I had a very high-paying job in engineering which I generally didn't mind, but soon after I turned 40 some things started shifting around in my thinking about life and my career. It felt sort of like I was waking up from a long dream, a dream where I was this robotic being walking on a treadmill with no conscious thought being given to what I was really "doing" with my life. Anyway, after several years of soul-searching and number crunching (and browsing this forum!), I decided to leave my lucrative job at the ripe old age of 45, once I had amassed what seemed like a safe number to fund my fairly modest lifestyle. Like you, I'm not married and have no kids, so that made the calculation easier.

I think if you work until you're, say, 42 or 44, and build up your finances to the point you're completely good to go with a 3% WR, then the money part is all set. The things you'll need to focus on then will be the psychological aspects, such as how will you continue to stay engaged socially with the world and what will you do to provide yourself with a continued sense of accomplishment and meaning, etc. Retiring in your mid-40s comes with some notable challenges, but if you can anticipate those types of things and plan for them, you'll likely be very satisfied with the outcome. If you don't, you may find yourself feeling somewhat adrift and a bit empty inside, especially if you were very engaged in your career for many years prior. It can be a tough transition, so definitely give some serious thought to the "what will I do all day" question well in advance of your last day in the office. Good luck!

 

[cfischer]

Seems like a good balance to me.

I'm good to stay while the going is good. I'm not rushing for the exits, but I want flexibility that if things go bad in my early 40's, that I had the option of calling it a day with the corporate career.

This is pretty much the balance I'm going for. Given ten more years of earning and saving, I'd still get out at 48 or so, but with plenty of money to live very comfortably, even with a few luxuries, and have plenty of time with the fam. Seems like a good balance. Getting out really, really early appeals to some parts of me, but I think that's a largely emotional side, and I think - more and more - that I'd like to try something else as a bridge, more along the lines of what interests me, not just what pays me.

 

[old woman]

OMY means another 250K to spend in retirement. Set your lowest retirement amount and once there work only if you don't hate working. Consider a second career or other goals in life. If you retired at 40 in good health with enough money hobbies aren't really enough. If you don't have goals other people will expect to use your time. This can be your goal if you like. Helping your mom for example in 10 years she will be 74 and might want you to help mow the lawn or repair things. My brother is like that in retirement he took care of our mom, his kids houses remodeling, whatever his wife wanted, babysitting a granddaughter occasionally, vacationing. He enjoys projects so when I retired he came a painted some rooms for me. As a young retiree you could own rental houses if you enjoyed projects but since a house tied you down think twice about that.

 

[Sojourner]

Your situation sounds extremely similar, and good advice all the way.

Let me ask then - how happy are you with your decision? What do you do all day?

Well... although I'd say I'm fairly happy, it isn't the sort of blissful nirvana that many others on this board seem to have attained. I still haven't quite found my groove, but I am working on it, and that in itself is an interesting project. I still do some part-time consulting work for several companies, so that provides me with a bit of structure and keeps me connected to various people and projects. I also have discovered the world of "meetups" recently and am enjoying getting out and meeting new people quite a bit. Even with all that, though, consistently filling my days with meaningful activities is an ongoing challenge.

Check out this thread that I started last year for a more in-depth discussion of these kinds of issues. http://www.early-retirement.org/forums/f29/coping-with-excessive-solitude-79152.html

Even with its challenges and its imperfections, though, there is one thing that is completely, undeniably, and perpetually awesome about being FIREd: sleeping as late as I want every morning and staying up as late as I want every night and having nearly complete control over my time and my comings-and-goings. I honestly don't feel like I could ever go back to the old 9-to-5, 5 days/week corporate life, having experienced and gotten used to this luxurious freedom for the past few years.

 

[AnIntentionalRoad]

I'm not planning on making a move anytime soon. 40 would be the earliest and that would only be if something happened that made work unbearable and I really did not want to start over at another company. 42 might be a great goal, with 45 being more realistic because of all of uncertainty in a 40+ year retirement. My biggest concern is health care costs for 40 years, coupled with a lower interest rate/expected returns investing world.

While it's been accurately pointed out that this is a very personal choice, I'm still interested in others perspective. $2M by 40 enough? $2.5M by 43? $3M by 45-46?

The MMM thing is every bit as crazy to me as multi millionaries that don't enjoy work but continue with it.

I retired at 43 with an admittedly sizable nestegg. Best decision of my life. I have several serious hobbies the keep me engaged and after several years of decompression, have started doing very light consulting in my old industry (right now about 10 hours a week) but I'll drop that if it starts to feel like a career again.

I haven't heard anything about a significant other or children but if either is a future possibility, they could greatly impact your need for more income.

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[Milton]

I haven't heard anything about a significant other or children but if either is a future possibility, they could greatly impact your need for more income.

Posts 10 and 11?

 

[Milton]

Well... although I'd say I'm fairly happy, it isn't the sort of blissful nirvana that many others on this board seem to have attained. I still haven't quite found my groove, but I am working on it, and that in itself is an interesting project. I still do some part-time consulting work for several companies, so that provides me with a bit of structure and keeps me connected to various people and projects. I also have discovered the world of "meetups" recently and am enjoying getting out and meeting new people quite a bit. Even with all that, though, consistently filling my days with meaningful activities is an ongoing challenge.

Check out this thread that I started last year for a more in-depth discussion of these kinds of issues. http://www.early-retirement.org/forums/f29/coping-with-excessive-solitude-79152.html

Here's a short list of books that you might find useful:

1. Anthony Storr, Solitude: a return to the self (1988);
2. Tom Hodgkinson, How to be Idle (2005);
3. Ernie J. Zelinski, The Joy of Not Working: A Book for the Retired, Unemployed and Overworked - 21st Century Edition (2003);
4. Sara Maitland, How to be Alone (2014);
5. Eva Hoffman, How to be Bored (2016);
6. Philippa Perry, How to Stay Sane (2012).

You should be able to find all or most of these titles at your local library.

Hope it helps, Milton

 

[Milton]

Trying to be proactive and plan now for the inevitability of the workplace becoming a drag. Always better to plan when times are good and your head is clear, versus in bad times when you're stressed.

Absolutely!

 

[AnIntentionalRoad]

Posts 10 and 11?

Ah, thanks!

 

[petershk]

As a suggestion... Try to take 3-6 months off... I mean really off... not "working from home" but rather, not checking email, etc and see how it FEELS.

I think that will tell you a lot about yourself (I'm testing this out).

My situation is different... married and two young kids... but also a few years older (early 40s).

My current situations puts my financial worry at the "worried about apocalypse" level so I'm focusing on the other part.

Personal advice: if/when you find a spouse make sure you are well aligned on money. I mean really... not the fake dating aligned. I'm not sure HOW to do this, but because my DW and I built our lives up together it wasn't that big of a deal... we just align really well financially (And in other ways too) but I've seen how this can go wrong when there are big differences in these areas and obviously you don't want to be in a divorce a few years after doubling your savings

 

[cfischer]

Your advice is for me to give up the career/high level position I've worked 14 years to attain to test out not working? I don't think that's very wise or practical.

Very much agree on the personal advice. Actually, I'm not sure at this point if marriage is worth the risk because of divorce.

As a suggestion... Try to take 3-6 months off... I mean really off... not "working from home" but rather, not checking email, etc and see how it FEELS.

I think that will tell you a lot about yourself (I'm testing this out).

My situation is different... married and two young kids... but also a few years older (early 40s).

My current situations puts my financial worry at the "worried about apocalypse" level so I'm focusing on the other part.

Personal advice: if/when you find a spouse make sure you are well aligned on money. I mean really... not the fake dating aligned. I'm not sure HOW to do this, but because my DW and I built our lives up together it wasn't that big of a deal... we just align really well financially (And in other ways too) but I've seen how this can go wrong when there are big differences in these areas and obviously you don't want to be in a divorce a few years after doubling your savings

 

[cfischer]

I retired at 43 with an admittedly sizable nestegg. Best decision of my life. I have several serious hobbies the keep me engaged and after several years of decompression, have started doing very light consulting in my old industry (right now about 10 hours a week) but I'll drop that if it starts to feel like a career again.

I haven't heard anything about a significant other or children but if either is a future possibility, they could greatly impact your need for more income.

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I think (hope!) I will be in a similar situation at a similar age. I really don't think boredom is going to be a problem. I also have lots of hobbies and would probably join a country club to golf/hang out. I'm more of a type A personality and make new friends quickly.

 

[Focus]

Even with its challenges and its imperfections, though, there is one thing that is completely, undeniably, and perpetually awesome about being FIREd: sleeping as late as I want every morning and staying up as late as I want every night and having nearly complete control over my time and my comings-and-goings. I honestly don't feel like I could ever go back to the old 9-to-5, 5 days/week corporate life, having experienced and gotten used to this luxurious freedom for the past few years.

+1001 (nights)

About a year after "retiring" (I find it hard not to put it in quotes), I took on a temporary part-time stint not related to my original field. It required my getting up earlier than ever before several days a week. It was hell to shift to the new schedule, but I did it. Still, it took a toll and I couldn't wait to return to a schedule ruled by my body clock's tendency for late nights and late mornings. Any "work" (there are those quotes again) that I do in the future will not require an alarm clock!

 

[Focus]

I really don't think boredom is going to be a problem. I also have lots of hobbies and would probably join a country club to golf/hang out. I'm more of a type A personality and make new friends quickly.

I'd examine this a bit more closely...

Forbes: How To Go From Type A To Type B In Retirement

Because of who and what they are, Type A’s generally don’t do well in retirement. Type A’s need tasks and objectives and deadlines to keep themselves occupied. And Type A’s want to know precisely where they fit in and who they can manage or control, even though retirees have no organization chart. ...

In fact, in retirement, Type A’s are often ridiculed, ignored or shunned because of their heavy-handed, misguided, and uncompromising approaches to making friends and influencing people.

 

[petershk]

Your advice is for me to give up the career/high level position I've worked 14 years to attain to test out not working? I don't think that's very wise or practical.

Very much agree on the personal advice. Actually, I'm not sure at this point if marriage is worth the risk because of divorce.

No. I mean take a sabbatical but make it a real sabbatical. Lots of people take time off work to recharge but then check email, come in once in a while, still attend meetings. I think if people do that's it's really different than test driving retirement.

Also I was surprised at how supportive a lot of work places are about that... and in many cases bosses admire it. It also forced me to put things into a state where I wasn't critical for day to day stuff... which changed my focus a bit.

Honestly I think all people should take 3-6 months off every few years. I think it would increase productivity and creativity and reduce burnout.

I think lots of people (including me for many years) thought that work was an all or nothing thing. It wasn't until I had the financial security to test the flexibility that I realized how flexible it is .

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[Milton]

No. I mean take a sabbatical but make it a real sabbatical.... I was surprised at how supportive a lot of work places are about that... and in many cases bosses admire it.... I think lots of people (including me for many years) thought that work was an all or nothing thing. It wasn't until I had the financial security to test the flexibility that I realized how flexible it is.

i think this advice is excellent if you can swing it at work: 'try before you buy' makes a lot of sense.

The problem is, many employers are anything but flexible, and taking (or even requesting) significant time off can be 'career limiting'; presumably that is the OP's concern. Of course, 'star' employees who possess skills or contacts that are in high demand will have more negotiating power than average workers, but by definition most of us are mediocre.

I'd examine this a bit more closely...

Agreed. At the risk of generalizing, I suspect that an introverted, 'Type B' personality more often than not finds ER easier than an extroverted 'Type A'.

 

[cfischer]

Most of us are a mix of type A and type B. Rigidly organized and concerned with time management are not aspects of Type A I bring into my personal life (my vacations are always agenda-light.)

Is this the right analysis? Even if I was dead-on type A, would it be better for heath/stress to stay in the corporate rat race where those behaviors are stresses are fueled?

I'd examine this a bit more closely...

Forbes: How To Go From Type A To Type B In Retirement

 

[cfischer]

I don't see how this is possible for anyone in a leadership role. Per Milton's reply below, yes, this would be a non-starter for me as it would be beyond career limiting.

For an all-star individual contributor, these kind of things are probably very doable, but not for my role.

I'd be worried about the flip side - not wanting to come back after 3 months!

No. I mean take a sabbatical but make it a real sabbatical. Lots of people take time off work to recharge but then check email, come in once in a while, still attend meetings. I think if people do that's it's really different than test driving retirement.

Also I was surprised at how supportive a lot of work places are about that... and in many cases bosses admire it. It also forced me to put things into a state where I wasn't critical for day to day stuff... which changed my focus a bit.

Honestly I think all people should take 3-6 months off every few years. I think it would increase productivity and creativity and reduce burnout.

I think lots of people (including me for many years) thought that work was an all or nothing thing. It wasn't until I had the financial security to test the flexibility that I realized how flexible it is .

Sent from my HTC One_M8 using Early Retirement Forum mobile app

 

[petershk]

IIt's highly workplace dependent I suspect... but I am/was in a leadership role and didn't have a problem... in fact my peers and seniors were supportive because just like me... they probably feel the same way. The feeling of "omfg if I leave for more than 1 week the company will be harmed and my career will suffer huge loss because people will question my commitment, etc."

That's EXACTLY how I used to think. No longer. It's a catch 22 but I don't want to work at a place where if I take a month or two off :

A. the place collapses which means I haven't set things up to be very robust

B. I lose tons of face. Not because o screwed up but because people value amount of time in the office not actual results or value .

So if requesting time off to recharge and saying I will set things up to function while I'm gone results in a super negative reaction... time for a new job because I suspect the work environment doesn't match what I think makes sense. Not that it's wrong... just misaligned.

I suspect (but can't prove) that more places are flexible than we think. Before I took time off.. and requested it... I was really anxious about both those things. Now I'm not.

Your second point is the bigger risk . But then if you can afford to leave now and don't want to go back... maybe it's not worth the extra financial security... but maybe it is.

The biggest thing for me is the feeling of having control over my life decisions instead of trying to work out what everyone else expects/demands

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[brainsqueeze]

Been lurking here a while, so wanted to get everyone's thoughts about my situation. I've always been "good with saving" having learned this from my parents, who were of modest means for most of my life. Sadly, my father passed away this past year, and now that I'm managing Mom's finances, come to find out he had accumulated nearly $3 million in assets (mostly from inheritance from my grandparents, which kept compounding.) My father worked hard until age 69, and only saw 2 years of retirement, mostly in poor health. Unknown to any of us at the time since he kept everyone in the dark about the money, he could have retired 10 years earlier.

I'm determined not to follow a similar path. I work for a mega corp and am doing well, I just can't see myself being a "lifer". I know many lower level execs that could have retired decades ago, but continue to work because that's their entire identity (my aunt is similar.) That scares me, there's more to life than that, and I work way too much now to want to keep up this pace.

My situation is as follows:
Taxable Investments (all liquid, stocks/bonds): $700k
401k: $200k
Income: $250k/year gross, $170k/year net (though various promotions and healthy bonuses my salary is up a lot recently)
Expenses: $4-5k/month

So saving $100-120k/year

Inheritance: I'll likely have a sizable one at some point in the future. Mom is 64. I'd be quite happy if I never saw a nickle for 30 years.
Houses: I own none, having owned 2 for many years. The freedom is priceless.

I don't live extravagantly, but walking away from a job I like and then having to every worry about money later seems crazy. I'm particularly concerned about the cost of health insurance and lower expected investment returns over the next 30 years, and knowing I'd retired, I would expect my spending to increase over its current levels, though perhaps not drastically.

Given the above situation, wen would you walk away?

Tell me what you're walking away TO, not FROM. Then you may have my answer.

Tough situation. Don't be your dad; on the other hand, your dad's willingness to work nose to the grindstone for all those years is why you will probably inherit 7 figures at some point. Which is the only reason we're having this conversation.

I think it's too early to back off, but you might think about a 10 year plan: to get into some long term housing; to think about life after RE; to think about a family. Get that all lined up and see where you're at in five years.

 

[cfischer]

From (the BAD): 100 Days a year on the road for work, 50+ hour weeks, commuting, meetings, email, being indoor and on computers most of the waking hours, the Northeast climate in the winter, limited free time to pursue hobbies

From (the Good): Helping creating a product that positively impacts people's lives, a big income, working with smart people, helping people in the careers.

To: Warmer climates (in winter months) a more active lifestyle, hobbies, less stress

Your comment below about me potentially inheriting 7 figures being the reason for this conversation is both wrong and obnoxious. I'm already a millionaire, any inheritance getting split 4 ways, and while someday it might be helpful in no way factors into my planning. I don't want a dime of his money and never will, and I'm upset he didn't get to enjoy more of his time with my mother.

Tell me what you're walking away TO, not
FROM. Then you may have my answer.

Tough situation. Don't be your dad; on the other hand, your dad's willingness to work nose to the grindstone for all those years is why you will probably inherit 7 figures at some point. Which is the only reason we're having this conversation.

I think it's too early to back off, but you might think about a 10 year plan: to get into some long term housing; to think about life after RE; to think about a family. Get that all lined up and see where you're at in five years.

 

[cfischer]

At one point here I felt like I couldn't leave without at least checking email for a week, but not anymore. I could get away with a month.

It's all risk/rewards to me. Not worth the risk (whether it's perceived or real) to try this at this point, but certainly food for thought.

IIt's highly workplace dependent I suspect... but I am/was in a leadership role and didn't have a problem... in fact my peers and seniors were supportive because just like me... they probably feel the same way. The feeling of "omfg if I leave for more than 1 week the company will be harmed and my career will suffer huge loss because people will question my commitment, etc."

That's EXACTLY how I used to think. No longer. It's a catch 22 but I don't want to work at a place where if I take a month or two off :

A. the place collapses which means I haven't set things up to be very robust

B. I lose tons of face. Not because o screwed up but because people value amount of time in the office not actual results or value .

So if requesting time off to recharge and saying I will set things up to function while I'm gone results in a super negative reaction... time for a new job because I suspect the work environment doesn't match what I think makes sense. Not that it's wrong... just misaligned.

I suspect (but can't prove) that more places are flexible than we think. Before I took time off.. and requested it... I was really anxious about both those things. Now I'm not.

Your second point is the bigger risk . But then if you can afford to leave now and don't want to go back... maybe it's not worth the extra financial security... but maybe it is.

The biggest thing for me is the feeling of having control over my life decisions instead of trying to work out what everyone else expects/demands

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