I think I made it...for now, at least.

[Andre1969]

Taxes: That last post got more long-winded than I expected, so I figured I'd start another post for taxes.

I really hadn't thought about it much, since I figure once I'm retired, I'm going to be living mostly off of long-term capital gains, and qualified dividends, so it shouldn't be too bad. Of course, those RMDs from my inherited IRAs will slowly grow over time, and when I start tapping into my uncle's IRA, that one will likely trigger some pretty good taxes. And, if I start doing Roth conversions, that will trigger some taxes as well.

For awhile now, my overall effective federal tax rate has been around 8-12%, according to the calculation my tax man does and puts into the summary of my income taxes each year.

I just pulled up my last paystub from 2023, and it shows $10,735 Federal and $7,080 State/local. That's an incomplete picture, since it just includes taxes paid from my job, and I'm going to have capital gains, dividends, interest, and so on, plus the mortgage writeoff and other deductions. But, I guess it's a start.

Long term capital gains are actually zero, up to around $45,000 I think (single filing status). And, if I end up selling any stocks or mutual funds, there's the cost basis to take into consideration. So overall, I don't think taxes are going to be too bad.

 

[Andre1969]

It's been a bit since I've check in here, so I figured I'd post a minor update. My 54th birthday came and went, and I was holding above the $3.1M mark. April as a whole got a bit bumpy, but I never dropped below $3.0M. And as of 5/14, another minor milestone hit. With all invested assets added up, I'm at $3,205,359.

That $3.0M is just a psychological threshold; I know it doesn't really mean anything in the real world, not like it's a pass/fail situation. But still, it feels nice to be above it.

It's kinda weird though, thinking that if I really do stick to my fantasy of retiring at 55, that's now less than 11 months away! I know I should probably feel euphoric, but at the moment, about all I can muster up is "contented."

 

[Out-to-Lunch]

I know I should probably feel euphoric, but at the moment, about all I can muster up is "contented."

That is better than "scared"!

 

[brydanger]

That last line really sticks with me - "contented"

Have you spent any time planning your retirement/next phase?
Not the dollars/cents/sense of it about how long you'll stay above $3M in the account, but WHAT or HOW you want to spend your time?

If I imagine planning any fun/freedom related event in my (working or non-working) lifetime as conceived only through the lens of how much money I saved up for it/would spend on it... i can imagine not being very excited to take that trip, go on that date, experience that thing/place as well.

I think a year or so ago i commented here and suggested you take a "gap year" to go travel/explore and see what lit you up. Seems now i probably should have started smaller.
Maybe it's time for a vision board about the things you'd like to do, places you'd like to go, experiences you'd like to have etc?

Maybe then instead of thinking through this from a have vs have-not mindset you could start being elated/euphoric about the potential adventures to come. Im pretty sure Ive already reinvented myself and lived 3 different lifetimes since walking away from the job (and Im excited/thrilled for the next one). At this point, we make just about every decision in our live with "content" as our lowest possible bar/thing to steer away from.

"Tell me, what is it you plan to do with your one wild and precious life?"
- Mary Oliver

 

[Al18]

Congrats on your goal. Are you still working?

You should start planning on where you are going to pull your money when you are retired. Do you have CD’s or other fixed income? If not, it’s probably a good idea to sell 1 years worth of stock in your brokerage account and keep it in a money market account. Setup automatic monthly transfers from the MM to your checking account.

 

[Andre1969]

Hey everyone, figured I'd pop in for another update. I added it all up this morning, and just slipped over the $3.3M mark. Today is the one day per week I'm supposed to go into the office. But, I was out relaxing in the pool a bit this morning, just before sunrise, and seriously thinking about staying home. I mean hey, what's the worst they can do...fire me?

Thankfully, they're really not that rigid about us coming in one day per week, as long as the work gets done, and I'm actually more productive from home. But, I figure I shouldn't push my luck too much.

As for where to pull money from, I do have about four years' worth of expenses across several MMA accounts. FireCalc gives me a 100% chance of success if I quit now, at my projected withdrawal rate. Heck, I could retire and up my annual withdrawal rate by about 60%, and still have a 95.4% chance of success, according to FireCalc.

And, if my portfolio took a permanent 50% hit, my 100% chance of success only drops to 89%. To get back to 100%, I'd only have to trim my spending by around 12-13%, which is easily doable.

Typing all this out and reading back on it, it's really making me start to question WHY, exactly, I'm still working? I'm still trying to keep April of 2025 as my goal to retire, but on days like this I'll admit it's hard not to just email my supervisor and tell her that this is it.

Oh, as for that "contented" remark I made about how I felt awhile back, I think I had Burns & Allen on the tv in the background at the time, and that old slogan "From contented cows come contented milk" was going through my mind.

 

[Dtail]

That just doesn't sound like a compelling reason to stay to me! "I love my coworkers and the work" yes, but "decent," nope! There are lots of decent people on the other side! Nothing wrong with choosing to work but that seems like a weak why and more like a momentum thing. I like the engaging data calculator as well... more important is health span... how much time can you physically and mentally still do what you wish to do?


ETA: Just found this.. not a lot of parameters but interesting to play with variables: HLE Calculator

+1
I believe the OP (who sounds like a real nice guy) does have a continuing case of the OMY and finds various reasons to stay employed.
The OP appears to be very detailed. Come to the other side. It sounds like it is time. I retired at 57, but didn't work from 55 onward and woud have retired earlier if I knew what I know now.

 

[brydanger]

Typing all this out and reading back on it, it's really making me start to question WHY, exactly, I'm still working? I'm still trying to keep April of 2025 as my goal to retire, but on days like this I'll admit it's hard not to just email my supervisor and tell her that this is it.

I asked you the same question here almost 16months ago.

Sadly, it seems all too typical here... people work their tails off focused on a number (that a pre-programmed calculator told them was their ultimate life goal), toil away towards that number (often sacrificing or putting on pause all of the things they would choose or prefer to do each day, month, year, decade to reach that goal) only to find themselves later moving the finish line again and again (for you from $2M to $3M to $3.3M to... or from 50yrs to 55yrs to...), to see that number in the rearview mirror but continue working and unable to find a way to go enjoy the fruits of their labor.

Instead, they wake up and choose to spend more days in the office and endlessly watching that sacred number grow - rather than enjoying life, traveling, or pursuing long-awaited and postponed dreams/goals.
At some point, it seems cutting those dryer sheets has become the habit that cant be broken, and for many it's just as much a trap as the cubicle that started this whole campaign.

This is why I suggested a gap year to you early on in this thread.
At some point we all need to find a way to break the cycle. To break the mentality that we've been told our entire lives - that our (only) mission or value is to work and make money (bits for ourselves but even more for someone else) and find a way to ask ourselves what would truly make us happy, or how we want to spend our days.

Truly ask yourself this.
Maybe it's next week, next month or next year... and you find yourself having a heart attack and getting rushed to the ER in the back of an ambulance, tubes and machines already attached to your body and the rush of fear and clarity that inevitably comes with it.
Regardless of outcome of that day (obviously we hope for the best) - ask yourself how you're going to feel about your decisions if that also happened to be your "only one day a week in the office"...
Where would you wish you were or what would you wish you were staring at instead? The spreadsheet or the sunrise? The cubicle or the ocean/desert/forest/plains?

You have successfully conquered the workplace! Congrats! It's truly an amazing feat!!
The problem is now, the boss that still owns you... is one that you cant see.
It's now time to look fear in the eye and kick him/her/it to the curb.

Try to look back/remember the reason you first set your FIRE goals (which i assume was age 50, $2M and the year 2020 based on previous posts)...
Why were you setting those goals?
The $$ or age or year wasn't the goal, it was a means to an end - it was so that you (and/or those you love) had the comfort and time to go enjoy more of your days and years however you wanted to.

You pondered a long time ago:

maybe I need to look at that one financial calculator that plots your chances of being rich, broke, or dead a little more often, and let it sink in that the things I worry about probably won't happen.

Rather than living life dictated by "hoping the things you worry about wont happen" - what if you started asking yourself what you'd do (or try or see or learn) if you knew you couldn't fail and nothing was standing in your way??

Now's the time. Get out there. Live with wild abandon.
Try all the things you've never done before. Learn what truly lights you up.
Buy a one way ticket. Go see your favorite band/show. Book a safari in Africa. Learn to sail (or take a cruise if you prefer)

Make your goal different than a bigger number. Make your next update here about how amazing you've felt, the places you traveled, the fun things you did with your people, the things you learned, how many months in a row you went without missing a single sunset/sunrise, the magic you felt when you stared into the eye of that whale, etc.

Oh man... I am SO thrilled for your journey - and cant wait to read all about it!!

 

[Andre1969]

Thought I'd just add this real quick. When I got into the office yesterday, fired up the laptop, and opened the internet, this was the first thing I saw. If this isn't a sign that it might be time to retire, I don't know what is!

 

[teej1985]

Thought I'd just add this real quick. When I got into the office yesterday, fired up the laptop, and opened the internet, this was the first thing I saw. If this isn't a sign that it might be time to retire, I don't know what is! View attachment 51447

Did you retire?

 

[Andre1969]

Did you retire?

Nah, still working. It's hard to describe why, but even though I know logically I can do it, mentally I'm just not ready yet. Plus, now that summer's basically over, my desire is fading a bit. I've noticed that about myself, that the cravings are cyclical, much like the seasons. I think mentally, I'm still in that childhood cycle of getting excited for spring, the longer days, nicer weather, and summer vacation looming on the horizon. But then once the middle of July passes, it just seems like, just as I feel summer vacation slipping away, I also feel the urge to put the workforce behind me slipping away.

I've gotten myself into a routine, a rut, but it's a routine that I'm comfortable with. Finance-wise, I'm still above the $3.3M mark. I actually broke $3.4M on 7/16, and was just barely above it on 8/30. So financially, I'm more than fine. Just mentally, not quite ready to let the job go, just yet.

I am starting to get to the point where I'm feeling the stress of the workplace easing up. For awhile, knowing that I could quit on a whim was actually having a bad effect on me. I was starting to let little things annoy me much more than they should, almost like I was looking for an excuse to get mad and quit. But, I'm past that now, and I'm more like "eh, it's not worth getting annoyed over."

One little experiment I am going to try, to give myself a glimpse of what it might be once retired, is that I'm going to take the entire week of Thanksgiving off, but have no plans whatsoever...other than the typical Thanksgiving Day, itself. Any of the other days, I'll just find stuff to do, on the spot. By that time of year the days are pretty short, it's usually kind of cold and dreary out, etc. So I figure it might give me a little bit of an idea of what retirement might be like, during the late fall/winter. That's the time I worry about the most, since the seasons affect me a bit.

I actually did get a taste of being out of work back in late 2018/early 2019, when the gov't shut down and we went on furlough for five weeks. However, at the time, I had only been in the new house a few months, so there was a lot to keep me busy. And, we had no idea of when we were going back to work. It could have been any day. So rather than feeling like I was getting a taste of requirement, it felt more like every day was a Sunday!

So, for the time being, I'm still shooting for April 2025, around the time of my 55th birthday. I think the only thing that would make me move it up would be if something happened with work that really made me mad. Off the top of my head, there's only two possibilities there. First, if they try to start making us come into the office more often. Right now it's 1 day per week, and they're not even that strict about that. Second, my supervisor is finally thinking about retiring. She's pretty useless, but for the most part, harmless, and leaves me alone. If she was to retire and get replaced by some micromanager that I could not tolerate, I'd be gone in a heartbeat.

 

[The Cosmic Avenger]

So, for the time being, I'm still shooting for April 2025, around the time of my 55th birthday. I think the only thing that would make me move it up would be if something happened with work that really made me mad. Off the top of my head, there's only two possibilities there. First, if they try to start making us come into the office more often. Right now it's 1 day per week, and they're not even that strict about that. Second, my supervisor is finally thinking about retiring. She's pretty useless, but for the most part, harmless, and leaves me alone. If she was to retire and get replaced by some micromanager that I could not tolerate, I'd be gone in a heartbeat.

Same. I'm currently going into the office a handful of times a year, mostly for office parties or lunch with my long-time coworkers. If I had to go in, say, more than once a quarter I'd probably just retire.

 

[Time2]

Maybe this isn't the right forum, since I'm going to be 54 in a couple months, so maybe that's not exactly a "young" dreamer anymore. Anyway, this morning I added up my figures, and just barely popped the $3M mark. $3,000,521

What you have is enough money that you no longer need to work for money. Nothing more. Since you still owe $432k on the house, I would base withdrawals on $2.7M. Since you are only 54, a safe withdrawal rate is 3.5%, or $94,500 a year, that has a 2.5% failure rate over 40 years. This is using FireCalc and it's criteria. You need to decide if you want to work where you are, someplace else, or not at all. EDIT: I just read you work for the government, you may be able to increase your withdrawal rate, because you will get a pension from the government at 59.5, 65 ? Using the tabs in FireCalc will allow you to put in all the variables to your situation.
“If you have a million and live like a millionaire, you won’t have a million for very long.”

 

[tulak]

Since you still owe $432k on the house, I would base withdrawals on $2.7M. Since you are only 54, a safe withdrawal rate is 3.5%, or $94,500 a year, that has a 2.5% failure rate over 40 years.

Why?

I would based withdrawals on 3.3M. The mortgage is just another expense, just like property taxes, insurance, etc. And in this case, I’m guessing a low cost expense, since it’s likely a 3% rate with around 25 years left on the balance.

 

[Andre1969]

Here's a few more financial updates, and things I might have inadvertently left out.
Total financial assets as of 9/13/2022: $3.373M
Outstanding balance on mortgage: $427K.
Original mortgage terms: 30 year fixed, $468K, 2.875%. Principal/interest: $1941.70/mo.
26 years left on the mortgage. I bought the house in 2018, but refinanced in 2020 when rates were nice and low.

I'm actually a government contractor, not federal gov't. So apologies for any confusion. No pension. Last time I checked, SS would be around $20K/yr, if I take it at 62.

The last time I ran some FireCalc simulations was using July 15, 2024 numbers, or about $3.396M. It gave me a 100% chance of success, if I was already retired at 54, planning to take SS at 62, living to 100, and having a yearly withdrawal up to $120K per year. At $130K per year, it dropped to 96.3%.

Living to 100 is probably a bit optimistic. And since that's a 46 year period, then the most recent time-tested period would be roughly 1977-2023. So I also tried 40 and 30 year timeframes, to get a taste of how more recent history might play out, and the results aren't much different.

I also ran the numbers, assuming an apocalypse scenario of no SS at all. Numbers weren't much different. If I was already retired, it gave me 100% at $100K per year, 99.1% at $110K per year, 95.4% at $120K per year, and 85.2% at $130K per year. In the past I used to shoot for $60K per year to consider myself comfortable, but with inflation, and having a more expensive home these days I figure more like $80K/yr. So anything above that, I think of as icing on the cake.

 

[pacergal]

You have done very well, congratulations!
With that low mortgage rate, I would not plan to pay off early, unless it bothers you to head into retirement with a mortgage.
We did the same thing, having a mortgage does not bother me in the least. Our budget includes it, and it will go away eventually (did a 15 year).

Does your 80K include taxes and medical insurance? If so, you more than OK! 100k would give even more for travel and still 100% in Firecalc.
Many here are comfortable with 95% success. I also looked for 100%, simply for safety reassurance.

 

[teej1985]

One little experiment I am going to try, to give myself a glimpse of what it might be once retired, is that I'm going to take the entire week of Thanksgiving off, but have no plans whatsoever...other than the typical Thanksgiving Day, itself. Any of the other days, I'll just find stuff to do, on the spot. By that time of year the days are pretty short, it's usually kind of cold and dreary out, etc. So I figure it might give me a little bit of an idea of what retirement might be like, during the late fall/winter. That's the time I worry about the most, since the seasons affect me a bit.

I would challenge you to think outside that box a little bit.

In retirement, you will not be confined to spend year round in your current home. You're a multi millionaire. You have enough money to chase longer days. For example, In Sydney Australia, the sun starts going down at 7 pm on October 6th.

I am 6 years into my government career and there's not a chance that I could do this for 20 years even if I had to only go in once per week. When I ran the Fidelity retirement calculator, if I worked until minimum retirement age when the pension starts and I continue to spend what I currently spend, I will die with like 7 million dollars or something.

When we were mandatory teleworking during covid, I was content because society was shut down and there was nowhere to go, nothing to do. And my assets weren't quite where I wanted them to be. The projections say that I'll hit 25x my assets in about 3 years, but I'm thinking of pulling the plug anyway at the end of the year, because I'm tired of waiting around and hoping that I'll meet someone special to retire early with.

Check out Login • Instagram from @brydanger for inspiration - You have the $$$ to go to so many beautiful places when the weather sucks where you live. Short winter days should not be the reason to be content to keep working.

 

[TickTock]

Nah, still working. It's hard to describe why, but even though I know logically I can do it, mentally I'm just not ready yet.

<snip>

So, for the time being, I'm still shooting for April 2025, around the time of my 55th birthday. I think the only thing that would make me move it up would be if something happened with work that really made me mad. Off the top of my head, there's only two possibilities there. First, if they try to start making us come into the office more often. Right now it's 1 day per week, and they're not even that strict about that. Second, my supervisor is finally thinking about retiring. She's pretty useless, but for the most part, harmless, and leaves me alone. If she was to retire and get replaced by some micromanager that I could not tolerate, I'd be gone in a heartbeat.

If you're not ready, you're not ready. Don't force it. You're FI, and *can* RE - it's now in your control. Koolau kept w*rking while FI until the job changed for the worse.

Being in control of your financial destiny is wonderful!

 

[Andre1969]

You have done very well, congratulations!
With that low mortgage rate, I would not plan to pay off early, unless it bothers you to head into retirement with a mortgage.
We did the same thing, having a mortgage does not bother me in the least. Our budget includes it, and it will go away eventually (did a 15 year).

Does your 80K include taxes and medical insurance? If so, you more than OK! 100k would give even more for travel and still 100% in Firecalc.
Many here are comfortable with 95% success. I also looked for 100%, simply for safety reassurance.

Thanks, Pacergal! Concerning the mortgage, I'll be the first to admit, I don't like having it. But, it just doesn't make financial sense to pay it off. So, my plan is to just let it run its course.

And yeah, with $80K/yr, that would take into account taxes and health insurance. As for success rates, with the calculations I've been running, I figure I'll be happy with 95% and up. If it's 80-95%, I considered only going one of those routes if absolutely necessary. Such as, if the workplace became so toxic I couldn't deal with it anymore, having to take care of a sick loved one, and so forth. And a situation where I'd cut back on expenses, if need be. Of course, if it was a scenario where the success rate came in at around 93-94%, and I was raring to go, I'd probably consider that close enough for government work! Anything below an 80% chance of success, I'd think of as too risky.

 

[Andre1969]

I would challenge you to think outside that box a little bit.

In retirement, you will not be confined to spend year round in your current home. You're a multi millionaire. You have enough money to chase longer days. For example, In Sydney Australia, the sun starts going down at 7 pm on October 6th.

I am 6 years into my government career and there's not a chance that I could do this for 20 years even if I had to only go in once per week. When I ran the Fidelity retirement calculator, if I worked until minimum retirement age when the pension starts and I continue to spend what I currently spend, I will die with like 7 million dollars or something.

When we were mandatory teleworking during covid, I was content because society was shut down and there was nowhere to go, nothing to do. And my assets weren't quite where I wanted them to be. The projections say that I'll hit 25x my assets in about 3 years, but I'm thinking of pulling the plug anyway at the end of the year, because I'm tired of waiting around and hoping that I'll meet someone special to retire early with.

Check out Login • Instagram from @brydanger for inspiration - You have the $$$ to go to so many beautiful places when the weather sucks where you live. Short winter days should not be the reason to be content to keep working.

That's one thing I'm going to have to get re-adjusted to...traveling. I used to go to Aruba somewhat often, and usually in November. Most times it was just for a week, although I went for two weeks in 2014 and 2016. It was a nice way to keep those dark, dreary months at bay for a bit longer. However, the last time I went was in November of 2019. I know those apocalyptic days of Covid are long past us, but in general, I just don't like the idea of getting on an airplane to go anywhere, anymore. But, I'm sure I can be coaxed.

I do think that once I actually retire, I won't feel so chained to the house anymore. That's the only downside from working from home. While I'm not chained to the cube farm, I'm still chained to the house. If I have some down time at work it does make it easier to run a quick errand, squeeze in a doctor's appointment, knock out some quick yard/house work or whatever. And it frees up some time because there's no commute. And management is cool with us doing that, as long as we have coverage when it's busy, and we make up the hours and don't commit timecard fraud. So, while there's more freedom compared to working in the office, it's still not total freedom.

The whole working from home thing has turned me into a bit of a recluse, and a homebody. But, I think I'll snap out of it, once I actually retire.

 

[teej1985]

The whole working from home thing has turned me into a bit of a recluse, and a homebody. But, I think I'll snap out of it, once I actually retire.

I can relate to that. I feel like Covid isolation really normalized being a homebody.

 

[MarieIG]

It sound as if you are doing very well. I do like the plan of an "experimental" week off. I did that myself. Initially I was not (mentally) ready, but there came a time that I was.

I would keep an eye on where you stand as far as your qualifications to take 72-t withdrawals, as you may not want to wave that by a few weeks.

 

[Diogenes]

...now that summer's basically over, my desire is fading a bit. I've noticed that about myself, that the cravings are cyclical, much like the seasons. I think mentally, I'm still in that childhood cycle of getting excited for spring, the longer days, nicer weather, and summer vacation looming on the horizon. But then once the middle of July passes, it just seems like, just as I feel summer vacation slipping away, I also feel the urge to put the workforce behind me slipping away.

Appetite is greatest in the anticipation. Once some long-desired experience actually begins, we may come to question the intensity of our fervor, and indeed, the wisdom of our decision. On a personal note, I was vastly more excited about potential retirement when I was in my 40s, than now, in my 50s. Back then, retirement meant freedom, self-determination, not having to get up early each weekday morning, not worrying about a poorly phrased e-mail, or what to say in my annual self-assessment. It meant focusing on my car-projects rather than putting out some fire at work. Now, retirement means... well, I don't know what, actually. Still struggling with that.

It's fashionable to beat ourselves up, over OMY. But why? If we don't have to justify to anyone, why we're eager to retire early... by what reckoning do we have to justify, why we've delayed retirement?

In retirement, you will not be confined to spend year round in your current home. You're a multi millionaire. You have enough money to chase longer days. ...

"Multi" here means a tad over $3M. That may be perfectly fine to live a dignified life without having to work, but is it really enough to become a globetrotter chaser of joys and excitements?

 

[teej1985]

"Multi" here means a tad over $3M. That may be perfectly fine to live a dignified life without having to work, but is it really enough to become a globetrotter chaser of joys and excitements?

I certainly think that it is. Not if you want to stay in penthouse suites every night.

There are lots of people living a dignified life with some (and some times a lot of) travel on a lot less than $3,000,000.