Financially independent retirement optional

[FIRO]

Hello community,
This is my first post here after I recently found this amazing forum.
I’m in my mid 40s, dual income, no kids. We are financially independent and for last 5 years I’ve cut down heavily on my work hours to 25-30 hrs a week with goal of 2 months of vacation which we’re stretching further to 4 months from this year. Although we are big believer of FI, the RE part is difficult to absorb for us right now as we’re not willing to give up on doing any work since it gives us a structure, routine and some form of identity.
Here is my scenario and I would appreciate any suggestions. This is in case we decide to retire today.

Current NW is with a 90/10 (stock/ bond) portfolio in diversified low cost mutual fund: (includes taxes and health insurance):
1. 20x for a Fat FIRE lifestyle.
2. 24x for current lifestyle which is very very comfortable.
3. 28x for lifestyle with some compromise from current, bust still quite comfortable.

By only working 20 hrs a week and a profession with a high demand, we can easily support the above FatFiRE lifestyle with a <3% SWR. Given our age and both quite healthy, we can comfortably work another 10-15 years. I have not included a possible 7 figure windfall in the next 10-15 years which will lower our SWR even further.

Despite this, I still wish to feel comfortable that I have enough to retire with current or FatFIRE lifestyle NOW. I know for a fact that even if my NW grows to a level that I can have a FatFIRE lifestyle with a 2.5% SWR now, I will still be working minimum 15-20 hrs a week which will cover for my health insurance and most of my travel expenses and will lower my SWR even further.
Is this thought crazy or absurd?
Am I wrong in wanting to be able to retire when my current job and lifestyle is well supported with what I have?

 

[TheWizard]

Excellent situation that you're in.
Just continue onward, focusing on life balance and check back in five years.
See you then...

 

[MarieIG]

Welcome to the ER Forum FIRO.

Of course your thought is not crazy or absurd. It gives you a lot of options.

Two links that many have found helpful with their retirement planning process are Frequently Asked Questions and FireCalc.

Hope to hear more from you in the future.

MarieIG

 

[FIRO]

Thank you TheWizard and MarielG. I’ve tried Firecalc which shows good success. I’m frequent at bogleheads which I love but most folks there very discouraging to the idea of early retirement and have a very conservative SWR. Even uttering anything above a 2.5% SWR for 40+ year retirement is doomed for failure.

 

[38Chevy454]

The beauty of being FI is you can do what you want to. Having a job that can work part time and you like is great. Take time to enjoy the extra time you have now. If your BS bucket gets too full, you have options.

Great job getting to the point where you are. Welcome to the forum.

 

[donheff]

To me FI is the primary goal. That lets you evaluate your work. If you enjoy it more than the unemployed options, why quit now? If you go the other way and an appealing job opportunity pops up later, check it out. You are free to make your own path.

 

[Taco]

>>work ... gives us a structure, routine and some form of identity.

Full-time employment is not a good work / life balance for most people.

If you are able to able to do all the "life" you want, and still enjoy benefits from the part-time work, it sounds like you are in an ideal situation. Carry on!

 

[retire48in2018]

You don’t have to retire to live your dream. Maybe FI is only what you want with part time.

However -at 20x - 24x - that seems light for early retirement. That seems to indicate more than 4% withdrawal rate?

 

[FIRO]

I completely agree. I’ve always believed that FI is way more important since it gives you freedom of choice. RE part can be a failure if one doesn’t have a plan in place or can retire to something. Lots of us do need a structured life and some form of identity which our work can provide. Also, it is not possible to like your job 100% of the time. Even if you dislike 30% of it while it gives you flexibility and purpose, I think it is still a success.

 

[FIRO]

You don’t have to retire to live your dream. Maybe FI is only what you want with part time.

However -at 20x - 24x - that seems light for early retirement. That seems to indicate more than 4% withdrawal rate?

Yes it will be almost 5% withdrawal and like I mentioned I don’t plan to retire anytime soon even if I have a SWR of 2% or less. A part time work will give me a lot of options.

 

[REIJM]

Welcome to the forum.

If you like work and are fine with the time commitments it requires, you don't have to RE just because you've reached FI. Like you said, it covers your healthcare, gives you some structure and intellectual challenge, so keep at it. In 5 years time, if the management team changes and you find yourself no longer enjoying it, pull the ripcord.

That's the great part once you've reached FI, is it gives you a lot more flexibility on deciding what you want to do, rather than what you have to do.

 

[Surewhitey]

DW is going the same route. 4 day / wk schedule & spending more time & money on enjoying travel and the GKs. Do what makes you happiest. We could live on ~3%, but I told DW to start enjoying spending more, now that the FI part is taken care of.

 

[pjigar]

Whatever floats your boat.

 

[ApeX]

Congratulations on your progress! The nice thing is you have the full spectrum of options open to you, and can continue to work a bit while you find the optimal solution - there's no "one size fits all" answer. You're already worlds ahead of nearly all of your peers. Enjoy it and be sure to work hard on your health, too!

 

[FIRO]

Thank you for your encouragement! I’ve seen few family and friends obsessed with work till old age and never took care of their health or be with their family. I still have friends and colleagues who work 70+ hours a week including most weekends while their kids hardly get to spend any spring breaks or other holidays. This is despite the fact that they earn extremely well and are financially secure with their retirement savings. I firmly believe that in the spectrum of life satisfaction and well being, Money comes after Time, good health and relationships.

 

[Koolau]

Great! So glad you are financially independent. Keep up the good w*rk and report back often on your plans.

 

[DJRR]

Current NW is with a 90/10 (stock/ bond) portfolio in diversified low cost mutual fund: (includes taxes and health insurance):
1. 20x for a Fat FIRE lifestyle.
2. 24x for current lifestyle which is very very comfortable.
3. 28x for lifestyle with some compromise from current, bust still quite comfortable.

By only working 20 hrs a week and a profession with a high demand, we can easily support the above FatFiRE lifestyle with a <3% SWR. Given our age and both quite healthy, we can comfortably work another 10-15 years. I have not included a possible 7 figure windfall in the next 10-15 years which will lower our SWR even further.

Seems a little light to cut the cord 100% with those numbers at your age, but you probably make it in most scenarios and if your job skills stay current you have a back up plan.

After the WSJ article today I think you are "Coast" or "Barista" Fired. You have enough money that you are not forced to slave away and you can coast into a better work life balance or cover any gaps with part time work.

You seem to be in great shape if you can really cover your healthcare and travel expenses with part time work. Enjoy your time and if you find something more interesting to do, you can always switch.

 

[FIRO]

DJRR,
Thank you and Yes we’re Coast FiRE. Our travel expenses are a good fraction of our overall expense (25-33%). So working part time will cover both that and the health insurance which can be unpredictable. Rest of our expenses are well covered with the NW between 2.25-2.75% withdrawal rate.

 

[ApeX]

What is “Barista-FIRE”?

 

[Rianne]

OP, you’re in the sweet spot. Managing stress is a big deal. It seems a lot of people are FI but lead stressful lives. It does not always come down to finances. Health, relationships, ability to make good decisions with a clear head. I have/had relatives who were/are financially set, but for other reasons their lives are unsettled. I would not consider them happy. I like to focus on that “peaceful, easy feeling” And being FI makes that much easier.

 

[CO-guy]

Congrats on getting to FI! Your willingness to embrace FI puts you well ahead of most people I know outside this site. It's the reason I joined this site.

While there are differences of opinion on the meaning and importance of the RE part, reaching FI provided me with the opportunity to address life balance issues. Two years ago I was putting in 40h/wk at the "9-5" and 30-40h/wk consulting on the side. This past year I went down to remote half-time rather than "9-5" and cut my consulting hours to a more reasonable 20-25h/wk. That year-long wind down (or coast) delayed worrying about things like health insurance for the last year, and now I'm hoping to maintain the 20-25h/wk of consulting, at least for the next year. Long-term, I hope to wind down the consulting over the next 5 years, but for now it's just more money to spend on things like travel.

 

[teej1985]

What kind of work do you do that pays you decently but allows you to work only 20 hours per week?

 

[Markola]

Whatever floats your boat.

This ^^^^. One can’t really predict how one will experience semi-retirement until one plunges in and explores it.

DW and I each left full time careers behind at 54. We both love the part time lifestyle. She went in a whole new direction while I started consulting in my field, which went so well that I’ve been full time for 9 months. I couldn’t have predicted that. Now I find that it’s too much and I’m about to dial it back again. Now at 61, DW is tired of her part time job and plans to quit. We are just feeling our way through, year by year. It’s a great way to go! Enjoy!

 

[brydanger]

I'll throw out a slightly different slant.
What would you do if you knew that one of the two of you wouldn't be here in 10yrs?

Would you still think of the "structure/routine/identity" of the work as having been a positive?
Or would you wish you had been doing something else for those same 10years??
Have you even given yourself the freedom to ask and think it through (most truly haven't)?

The struggle is that ALL of society (including most even here) is that it paints the picture of life/retirement as being very black or white. First there's the working part, then there's the dying part, and "retirement" is whatever years we might happen to get in the middle. Yikes. Seriously, no thank you.

Let's think in the gray zone for a bit... if for no other reason because it's fun!

What if you took a year (or two) to go explore, play, see the world, find out what you enjoy as a couple of adults who have enough money to experience new things AND still young enough to enjoy them fully?

What if after that year you decided to keep it going, and soon realized you were at or near the end of that same 10yr period and we're choosing whether to keep it rolling or what you wanted more or less of?

What if you realized at some point along the way that you actually spent LESS money while traveling/living out whatever your dream lifestyle is then when you were working FT?
Maybe you started doing something simply because you enjoyed it, but then found it also paid you well, or even more than the 20hr/week job (but with 12months of flexibility/vacation on the side)?

Seriously... what would you do if you knew you couldn't fail (or if you knew that you had limited time)??

Life is anything BUT black and white. It isn't before work and after work.
The funny thing about leaving what you know/have always done to go play/experience life is.. you can ALWAYS go back to work. You can always make more money (though you may choose not to, or at least not to do it in the same way). This life you've been living... you're really good at it. You know everything about it... so its the easiest thing ever to go back to (IF you decided to).

Many/most others would respond here and say "yes, but what if I run out of money before I die?"
Okay, sure... its a concern for all of us.
But what if you run out of time before you have a chance to enjoy your money?

 

[Patience]

I'll throw out a slightly different slant.
What would you do if you knew that one of the two of you wouldn't be here in 10yrs?

Would you still think of the "structure/routine/identity" of the work as having been a positive?
Or would you wish you had been doing something else for those same 10years??
Have you even given yourself the freedom to ask and think it through (most truly haven't)?

The struggle is that ALL of society (including most even here) is that it paints the picture of life/retirement as being very black or white. First there's the working part, then there's the dying part, and "retirement" is whatever years we might happen to get in the middle. Yikes. Seriously, no thank you.

Let's think in the gray zone for a bit... if for no other reason because it's fun!

What if you took a year (or two) to go explore, play, see the world, find out what you enjoy as a couple of adults who have enough money to experience new things AND still young enough to enjoy them fully?

What if after that year you decided to keep it going, and soon realized you were at or near the end of that same 10yr period and we're choosing whether to keep it rolling or what you wanted more or less of?

What if you realized at some point along the way that you actually spent LESS money while traveling/living out whatever your dream lifestyle is then when you were working FT?
Maybe you started doing something simply because you enjoyed it, but then found it also paid you well, or even more than the 20hr/week job (but with 12months of flexibility/vacation on the side)?

Seriously... what would you do if you knew you couldn't fail (or if you knew that you had limited time)??

Life is anything BUT black and white. It isn't before work and after work.
The funny thing about leaving what you know/have always done to go play/experience life is.. you can ALWAYS go back to work. You can always make more money (though you may choose not to, or at least not to do it in the same way). This life you've been living... you're really good at it. You know everything about it... so its the easiest thing ever to go back to (IF you decided to).

Many/most others would respond here and say "yes, but what if I run out of money before I die?"
Okay, sure... its a concern for all of us.
But what if you run out of time before you have a chance to enjoy your money?

Well said.
Dw and I were just talking about this today. If we find out I'm gravely ill then I will immediately retire, just like my mother. Doesnt matter if there's enough money. Its time. Unfortunately, by the time you know, it's typically too late and your days are mostly consumed with doctors and treatments if you're lucky enough to have the means.
This is how I've justified slowing down after years of hustle. Not FI yet, but not dead either.
No one loves their job that much. If given 2 months left to live, would you keep working? Unlikely.