Limping to the finish line at 55

[LarryMelman]

$3 Million on $20,000 a year .. are you kidding .. Just do it, and retire already.

It won't be $20,000 a year. I'll certainly spend more. Maybe a lot more. Health insurance alone will add at least $10K. Assuming that I can get health insurance for almost 10 years. That's a long time to rely on general political stability. What if I need to support my parents somehow.


Yes, 4% WR on $3M is 120K. 3% is 90K which will be way more than enough. But this isn't as easy as you make it out to be.

 

[CardsFan]

It won't be $20,000 a year. I'll certainly spend more. Maybe a lot more. Health insurance alone will add at least $10K. Assuming that I can get health insurance for almost 10 years. That's a long time to rely on general political stability. What if I need to support my parents somehow.


Yes, 4% WR on $3M is 120K. 3% is 90K which will be way more than enough. But this isn't as easy as you make it out to be.

YES. Actually it that easy, financially. But maybe not emotionally. And if you have other concerns about your parents, that factors in as well. But we cannot assess that, only you can.

 

[LarryMelman]

YES. Actually it that easy, financially. But maybe not emotionally. And if you have other concerns about your parents, that factors in as well. But we cannot assess that, only you can.

I used my parents only as an example of a black swan kind of unplanned need. I realize that at some point you have to take the plunge, black swans be damned.

I was just trying to point out that my expenses will go up in early retirement. Maybe by a factor of 2 or 3 or 4. I'm not expecting to stay at $20K/year. That's all.

 

[RunningBum]

Yeah, but there's always going to be a black swan event you can't cover, even if you continued working. At some point you have to let go.

 

[CardsFan]

I used my parents only as an example of a black swan kind of unplanned need. I realize that at some point you have to take the plunge, black swans be damned.

I was just trying to point out that my expenses will go up in early retirement. Maybe by a factor of 2 or 3 or 4. I'm not expecting to stay at $20K/year. That's all.

And that leads to my comment on the emotional side. Emotions are real, they cause us to make decisions. Nothing wrong with that, for the most part. Just use your rational side to counter act and question the emotional response. Easier said than done. I know I have made emotional financial decisions that were not optimal, but they were not be deal breakers, either.

Ending the paycheck is a tough decision. Good luck.

 

[HI Bill]

Yeah, but there's always going to be a black swan event you can't cover, even if you continued working. At some point you have to let go.

+1. In risk aversion, there's a saying...something like, you can plan for 98% of outcomes inexpensively, but if you want to plan for the 2%, it's going to be very costly. I think this applies to retirement planning. You can work until you can cover almost any black swan event, but then, the possibility of ER is gone, and while you're virtually guaranteed never to run out of $, you won't have many years, or much health left as a reward for your flight to perceived safety.

 

[kimcdougc]

Let us know when you put in the two weeks notice. Welcome to the sight and look forward to hearing more from you.

 

[LarryMelman]

You can work until you can cover almost any black swan event, but then, the possibility of ER is gone, and while you're virtually guaranteed never to run out of $, you won't have many years, or much health left as a reward for your flight to perceived safety.

I've made this exact argument many many times, maybe even on this site. Good health eventually ends and with it, a lot of choices go out the window as well. Making the final decision is turning out to be harder than I would have ever thought.

 

[HI Bill]

Making the final decision is turning out to be harder than I would have ever thought.

I'm with you on this one...Final is Final for me...once I make the decision, I never plan to have to w#rk a day in my life, except for fun projects that are an avocation. I consider the decision irreversible, although it's not really.

 

[jhmccox32]

If you’re fairly healthy, have you considered catastrophic health insurance at a much lower rate than Cobra?

 

[LarryMelman]

The health insurance options that I know of (I've talked with brokers) are
1. Employer's Cobra, $400-$500/mo, low deductibles.
2. ACA. Higher rate than Cobra, much higher deductibles. Effectively it is "catastrophic insurance" because you have to have a really major expense before it pays anything at all, after paying the premium and deductible.
3. A few short-term policies (1 year renewable) still exist, they follow the pre-ACA rules. Meaning, you have to qualify, and you can be non-renewed.

The broker I talked to told me that Cobra was my best option.

There are also a few things that aren't really insurance that I'd want to rely on:
4. Limited benefit insurance. i.e. "$500 per day in the hospital".
5. A limited policy that covers only certain diseases.
6. The health sharing ministry plans.

 

[pb4uski]

That's a pretty good rate for a low deductible COBRA... my COBRA was $900 for a couple for high deductibles.... in 2012!

 

[prudent_one]

It's only a hard decision until you give notice, and then it immediately turns into joyous relief. I could not believe how quickly and immensely my frame of mind changed after having "the talk" with the boss. The last two weeks of work seemed like what we used to call "IPV" (In-plant vacation, which is when your boss is on vacation but you aren't, and not a lot gets done). You're there, but not there.

You are all set, time to enjoy what you've been working for all those years.

 

[LarryMelman]

I know, dammit, I know. Actually I wouldn't have "the talk" with my immediate boss, since he's the one that's made my life hell on earth for over a year. I'd go to our VP, who knows that he wouldn't get an opening for a replacement in the current economic conditions.

 

[imoldernu]

Find someone to share your retirement, and do it ASAP.

There comes a time in your life when you have to let go of all the pointless drama and the people who create it and surround yourself with people who make you laugh so hard that you forget the bad and focus solely on the good. After all, life is too short to be anything but happy.

Karl Marx

 

[CardsFan]

I know, dammit, I know. Actually I wouldn't have "the talk" with my immediate boss, since he's the one that's made my life hell on earth for over a year. I'd go to our VP, who knows that he wouldn't get an opening for a replacement in the current economic conditions.

On the other hand, what could be sweeter than to just hand your immediate boss a piece of paper, politely saying you choose to no longer be employed.

Personally, my boss was a great guy (who I had actually hired many years before), so the talk was pretty easy. He congratulated me, asked me to stay on a little longer (part time with full benefits), and I did.

In your case, I would be leery of have the talk with the "big" boss. He will likely try to talk you out of leaving.

 

[Dean56]

It's only a hard decision until you give notice, and then it immediately turns into joyous relief. I could not believe how quickly and immensely my frame of mind changed after having "the talk" with the boss. The last two weeks of work seemed like what we used to call "IPV" (In-plant vacation, which is when your boss is on vacation but you aren't, and not a lot gets done). You're there, but not there.

You are all set, time to enjoy what you've been working for all those years.

This is why I enjoy reading the threads on this site. Not only is there great information shared between forum members......But, the forum members are very supportive and try to help others out with the sometimes hard decision to pull that plug and start enjoying life outside of w**k.


This forum really has encouraged me to start planning for FIRE.

 

[Doc0]

When you retire, you take back all the risk you off loaded to your employer. That's the price of freedom. You have 3M sans SS and 10 years to medicare. If health care is 10K/yr plus a 10K deductible you need 110K available to pay for that over 10 yrs till Medicare. Did I mention you have 3M dollars? If it inflates to 20K/yr what do you care? If you need a 600K heart operation you'll be damn glad you have health insurance. You are being held hostage by your fear of risk, but you have no risk so it's an irrational fear. You're bullet proof. If it freaks you out pull 110K out of the accounts and put it in a high yield bank account and no matter what the market does healthcare is funded. You can as easily put 300K in a high yield and health care and living are funded for 10 years. You can take great solace in the fact you sold when the market was high,and virtually eliminated your risk for 10 years. The cost of eliminating risk is the loss of a little dab of return. Do you think it matters a whit to your future if you make 7% or 6.99%?

SORR does not apply to a portfolio that is closed. So if you take out the dough and close the portfolio, SORR is no longer your worry, at least for 10 years maybe longer depending on the next recession. Just reinvest the dividend income and live on the cash. You'll recoup the 300K in no time. Living on cash is the most efficient way to Roth convert. All of the ordinary income goes into the Roth so your taxes are lowest. The tax rates expire in 2025 so you have 6 years to Roth convert at the best tax rates you'll ever see in your lifetime, so retiring in Sept gives you 4 months to do the 2019 conversion and make your plan for the 2020 conversion. You have business to take care of and a future to plan, so leave the slavery behind and get with the program. As an engineer you will love optimizing your portfolio especially from a tax perspective. Congrats on winning the game.

I love being retired. It is not about what I do. It's about what I get to be. I'm unemployed.

 

[RetireRay]

Retire already. Don’t end up being the richest person in the graveyard. A good friend of mine is dying of cancer and is only 54 years old. It’s a good reminder that we all have an expiration date. Some sooner than others. If you have the money, which you do, why go into work everyday? Go out an enjoy your life, while you still can.

 

[DrRoy]

Get out, get out, get out!

 

[bonvoyage]

I just gave notice recently at the end of July to the megacorp where I have been working for almost 28 years. You can't even begin to imagine the giddy happiness that I felt after I sent off the email to my boss on the morning of July 15. I spent the next couple of weeks wrapping up stuff and handed in my laptop and I was done

 

[dirtbiker]

I know, dammit, I know. Actually I wouldn't have "the talk" with my immediate boss, since he's the one that's made my life hell on earth for over a year. I'd go to our VP, who knows that he wouldn't get an opening for a replacement in the current economic conditions.

When you do talk to the VP, which I'm assuming is your boss's immediate boss, I'd throw your boss under the bus so hard. Let him know that he's the reason you're retiring early (and I probably wouldn't mention that your initial retirement date was not far off). Let him know how miserable he's made you. Who knows, maybe he's a problem for his boss too, and they're finding any reason to fire him. Or maybe they'll give a stern talking to him that might make life easier for his subordinates in the future. Once you leave, you'll still have coworkers left that will be stuck dealing with this butthead. Even if nothing is done, at least you would have tried to help them out. Just my thoughts from a guy who is over 20 years from retiring.

 

[ncbill]

Retire already. Don’t end up being the richest person in the graveyard. A good friend of mine is dying of cancer and is only 54 years old. It’s a good reminder that we all have an expiration date. Some sooner than others. If you have the money, which you do, why go into work everyday? Go out an enjoy your life, while you still can.

Yep, for the OP any "black swan" is not going to be financial, but most likely health-related.

Like my recently-deceased relative who started having back pain early 2018 & then found out it was terminal cancer around Labor Day, dying just a few months ago.

 

[fishfactory]

Larry, I am also an Engineer who retired at 55 this May and plan to perform aggressive Roth conversions. I found www.i-orp.com conversion optimization program to be very helpful. It is free, and for me the "Extended ORP: Retirement planning for nerds" version on the site was detailed enough to handle all variables. I do not believe we will ever see Fed tax rates this low again. There are also some good articles on that site, including this one : https://www.i-orp.com/modeldescription/Vol15Issue1.pdf#page=49
Look at pages 37-59.

 

[SmallCityDave]

What an interesting situation you are in....


If I were in your shoes on September 1st I would take your boss out to lunch and apologies for whatever it is that he perceives that you've done and ask how you can restore the relationship and let him think about it for a couple of days after that I'd broach the subject again and ask him if he wanted your resignation.