Retire at 58 w/ $4M or retire at 60 w/ $5M?

[dmpi]

If you enjoy your job and the people you work with I would stick it out. But if works a drag I would go in heartbeat.

 

[NoiseBoy]

Since your basic financial situation appears to be really solid, I think you should ask yourself what you would use the extra $1M for? If I were in your shoes, I think that I would only want to continue working for specific things or to fund specific experiences. For instance, I flew business class for the first time last year on two of my trips and it is better than flying economy, so perhaps you could work a few months to fill up a luxury travel bucket. You mentioned that you and DW have some strong hobbies; do any of them require toys? Maybe you work a couple of months to buy some new toys, a new car, or a home improvement. Spend it, don't save it Saving is a habit most of us find hard to break.

 

[Aerides]

Your choice is not:
4m at 58 vs. 5m at 60. That's incomplete math.

If you retire at 58, now, with $4M, there's an exceedingly good chance that's at least 4.1 or 4.2 or more by the time you reach 60, even after you spend per your plans. So that gap is going to close from growth on your investments. So, compare the two version of you at 60. One that's just retiring with 5m, vs. one that retired at 58, travelled and relaxed, and still has 4.2m.

Or, compare the version of you at 70, looking back and reflecting on the decision. Or at 75, would you have rather had those two years or the money?

 

[Koolau]

Your choice is not:
4m at 58 vs. 5m at 60. That's incomplete math.

If you retire at 58, now, with $4M, there's an exceedingly good chance that's at least 4.1 or 4.2 or more by the time you reach 60, even after you spend per your plans. So that gap is going to close from growth on your investments. So, compare the two version of you at 60. One that's just retiring with 5m, vs. one that retired at 58, travelled and relaxed, and still has 4.2m.

Or, compare the version of you at 70, looking back and reflecting on the decision. Or at 75, would you have rather had those two years or the money?

Well said.

You'll never reclaim the time you spent w*rking longer than you really need to. Time to seriously consider walking! But YMMV.

 

[Route246]

I have a slightly different take. Grew up modest in a very upscale neighborhood, one of the wealthiest enclaves in California, let alone the US. I saw how higher income families lived. We had enough to live, eat and get along but parents saved for our education and their own financial security. Children of the Depression often live this way. I started with nothing, including no student loan debt so I was quite fortunate. At 67 I am at peak earnings and with my package of salary, bonus, RSU it is about $1.1M/year right now due to RSU which slowly decays. We have way more than we could ever need. A bunch more but something inside of me plus words from my late father in his dying days was he told me never quit your job, make them force you to quit if necessary. He left this earth with that attitude and I respect him like nobody else. I worked so hard trying to stay relevant as an engineer, I never let myself enter a comfort zone where I would obsolete my skills and value. I take great personal pride in this as nobody else does so it is personal. I'm not working for the money anymore and our charitable contributions reflect this. I have a nice role, challenging with corporate frustrations but nothing to cause me to hate working. I have activities lined up for when I retire later this year. Travel seems to be a common goal but I hate travel due to burnout as a road warrior in my career. I've been everywhere many times for work and I've seen sights that I would have never seen otherwise. Wife came with me on some of those trips so she has also had a fair amount of travel before. I guess you can just call me a workaholic. We just bought a home in original condition (built in 1958, remodeled in 1975) in an upscale area that is going to require $2M in facelift and upgrades so that is going to be a formidable project to finish in the next 2 years due to Prop 19 limits. It will be worth $5.5M when we are done according to comps in the area. $5.5M may sound like a lot but the median sales number is about $4.3M in this area. I feel like we stole this home in a very tight market as the lot is quite larger than most of the surrounding homes. This was an asset allocation move and having a nice house when complete is a bonus.

That said, I agree with many here. Do what your instinct tells you to do. If you have a travel itch then scratch it and scratch it well until it feels really good. That's not our thing. We are still savers although I convinced the wife we should end that mentality. We still shop for bargains at Costco and online. I don't think we could ever stop being that way. We drive Toyotas, no Lexus or Benz as my wife doesn't want to project any image of wealth. We live very comfortably but in a very stealth manner. The neighborhood we are moving to has a lot of retired MD, DDS, attorneys, executives, pilots and legacy high-income people left. I guess we fit in well with their level of wealth and income but unlike them we came very late to this neighborhood. We plan to be very low-key and quiet. Our remodel will maintain the mid-century character of the neighborhood and won't be some monster two-story pink elephant like the neighboring cities, in fact two stories are not allowed anymore in the city by the planning department. There are only about 3% of the homes in the city that are two-stories and those happened more than 20 years ago before the new planning standards were enacted.

Go for it. It sounds like you have no qualms about leaving your job, just need a nudge to make it happen.

 

[Flieger]

I have a slightly different take. Grew up modest in a very upscale neighborhood, one of the wealthiest enclaves in California, let alone the US. I saw how higher income families lived. We had enough to live, eat and get along but parents saved for our education and their own financial security. Children of the Depression often live this way. I started with nothing, including no student loan debt so I was quite fortunate. At 67 I am at peak earnings and with my package of salary, bonus, RSU it is about $1.1M/year right now due to RSU which slowly decays. We have way more than we could ever need. A bunch more but something inside of me plus words from my late father in his dying days was he told me never quit your job, make them force you to quit if necessary. He left this earth with that attitude and I respect him like nobody else. I worked so hard trying to stay relevant as an engineer, I never let myself enter a comfort zone where I would obsolete my skills and value. I take great personal pride in this as nobody else does so it is personal. I'm not working for the money anymore and our charitable contributions reflect this. I have a nice role, challenging with corporate frustrations but nothing to cause me to hate working. I have activities lined up for when I retire later this year. Travel seems to be a common goal but I hate travel due to burnout as a road warrior in my career. I've been everywhere many times for work and I've seen sights that I would have never seen otherwise. Wife came with me on some of those trips so she has also had a fair amount of travel before. I guess you can just call me a workaholic. We just bought a home in original condition (built in 1958, remodeled in 1975) in an upscale area that is going to require $2M in facelift and upgrades so that is going to be a formidable project to finish in the next 2 years due to Prop 19 limits. It will be worth $5.5M when we are done according to comps in the area. $5.5M may sound like a lot but the median sales number is about $4.3M in this area. I feel like we stole this home in a very tight market as the lot is quite larger than most of the surrounding homes. This was an asset allocation move and having a nice house when complete is a bonus.

That said, I agree with many here. Do what your instinct tells you to do. If you have a travel itch then scratch it and scratch it well until it feels really good. That's not our thing. We are still savers although I convinced the wife we should end that mentality. We still shop for bargains at Costco and online. I don't think we could ever stop being that way. We drive Toyotas, no Lexus or Benz as my wife doesn't want to project any image of wealth. We live very comfortably but in a very stealth manner. The neighborhood we are moving to has a lot of retired MD, DDS, attorneys, executives, pilots and legacy high-income people left. I guess we fit in well with their level of wealth and income but unlike them we came very late to this neighborhood. We plan to be very low-key and quiet. Our remodel will maintain the mid-century character of the neighborhood and won't be some monster two-story pink elephant like the neighboring cities, in fact two stories are not allowed anymore in the city by the planning department. There are only about 3% of the homes in the city that are two-stories and those happened more than 20 years ago before the new planning standards were enacted.

Go for it. It sounds like you have no qualms about leaving your job, just need a nudge to make it happen.

He says he has $4MM and $100k annual spending. Ridiculous to continue to work unless he LOVES his JOB.

Flieger

 

[Koolau]

He says he has $4MM and $100k annual spending. Ridiculous to continue to work unless he LOVES his JOB.

Flieger

Right. If someone actually enjoys their j*b more than retirement, then why not w*rk? BUT don't w*rk just for the extra money if you don't need it.

 

[Route246]

He says he has $4MM and $100k annual spending. Ridiculous to continue to work unless he LOVES his JOB.

Flieger

For me it is a little deeper. My job, my professional reputation and my profession itself is something I spent my entire adult life building. It wasn't easy, it was definitely not comfortable and it is something that I can look back on now with a small amount of self-pride. Whether you're in the trades and you are the best electrician or auto technician, in the service sector and you're the best physician or nurse, in any generic white collar sector and you are the best attorney or accountant, a certain amount of effort went into building that. It was about the money when you're first starting out but once you reach financial critical mass the money is just an add-on and something else is driving this. I can't really explain it. It is very visible with professional athletes but it happens in all sectors of work.

I believe it is more like pride of ownership and drives people to continue working. I have a friend who is a professional pilot. He went through the military because he grew up modest and that was his path to becoming a pilot. He avoided commercial airlines because he didn't want the emotional burden of being responsible for so many lives. He ended up flying jumbo jets in the cargo industry. He flies 747s today which to him is the absolute pinnacle of his goal in life, that is to be paid to fly 747s. He told me that if he had sufficient wealth he would do his job for free, just for the privilege of being able to fly a 747, something he aspired to do since childhood. He keeps himself very fit and will fly until he can't anymore. He just loves flying since childhood. I asked him about retirement. It absolutely terrifies him as he would have to give up something he is so passionate about, he absolutely loves flying 747s and he said he has to pinch himself that he actually gets paid to do something that he would gladly pay to have that privilege.

I understand his feeling. He spent his entire life attempting to reach this goal. He has sustained it for many decades now the the thought of retirement depresses him but he knows at some age he will have to give it up (he's 62 now). Don't misunderstand. His job can be mundane, something boring and sometime the bureaucracy and politics can be tiresome. At times he hates his job because of this but he thinks about the big picture and just copes with it. How lucky can a person be? I envy his career path. I have a small fraction of what he has and I do understand.

 

[wrigley]

Decision time for us. Wife and I just turned 58 and could retire this year with:

• ~$4M nest egg ($2.1M Taxable, 1.4M 401K, 300k Roth, 200k cash)
• No debt. Paid off $750k home in medium cost of living area.
• Kids all grown up and out of house
• At 62 we could get about $60k in SS. Not sure when we will file though.
• Yearly retirement expenses expected to be ~$120k (60-70k to pay the bills including healthcare, 50-60 to travel)

I have some financial incentives to work until 60 so would project us to have about a $5M nest egg if we work two more years. Our health is good and my company still likes me so I can stay if I like but leaning towards checking out now versus two more years.

Really struggling with this. My gut says go now.

Thoughts?

Show Off!

 

[Koolau]

For me it is a little deeper. My job, my professional reputation and my profession itself is something I spent my entire adult life building. It wasn't easy, it was definitely not comfortable and it is something that I can look back on now with a small amount of self-pride. Whether you're in the trades and you are the best electrician or auto technician, in the service sector and you're the best physician or nurse, in any generic white collar sector and you are the best attorney or accountant, a certain amount of effort went into building that. It was about the money when you're first starting out but once you reach financial critical mass the money is just an add-on and something else is driving this. I can't really explain it. It is very visible with professional athletes but it happens in all sectors of work.

I believe it is more like pride of ownership and drives people to continue working. I have a friend who is a professional pilot. He went through the military because he grew up modest and that was his path to becoming a pilot. He avoided commercial airlines because he didn't want the emotional burden of being responsible for so many lives. He ended up flying jumbo jets in the cargo industry. He flies 747s today which to him is the absolute pinnacle of his goal in life, that is to be paid to fly 747s. He told me that if he had sufficient wealth he would do his job for free, just for the privilege of being able to fly a 747, something he aspired to do since childhood. He keeps himself very fit and will fly until he can't anymore. He just loves flying since childhood. I asked him about retirement. It absolutely terrifies him as he would have to give up something he is so passionate about, he absolutely loves flying 747s and he said he has to pinch himself that he actually gets paid to do something that he would gladly pay to have that privilege.

I understand his feeling. He spent his entire life attempting to reach this goal. He has sustained it for many decades now the the thought of retirement depresses him but he knows at some age he will have to give it up (he's 62 now). Don't misunderstand. His job can be mundane, something boring and sometime the bureaucracy and politics can be tiresome. At times he hates his job because of this but he thinks about the big picture and just copes with it. How lucky can a person be? I envy his career path. I have a small fraction of what he has and I do understand.

I envy anyone with a passion for "something." If it's your occupation, that's fantastic. You are blessed, indeed. I felt that way for a while. The DAY I stopped feeling that way, I FIRE'd. I w*kred 7 years past FI because I loved what I was doing. When Megacorp "caught" me enjoying my j*b, they decided to change it. That's when I said Nope. I'm outta here" (the next Friday).

 

[BSBUK]

Decision time for us. Wife and I just turned 58 and could retire this year with:

• ~$4M nest egg ($2.1M Taxable, 1.4M 401K, 300k Roth, 200k cash)
• No debt. Paid off $750k home in medium cost of living area.
• Kids all grown up and out of house
• At 62 we could get about $60k in SS. Not sure when we will file though.
• Yearly retirement expenses expected to be ~$120k (60-70k to pay the bills including healthcare, 50-60 to travel)

I have some financial incentives to work until 60 so would project us to have about a $5M nest egg if we work two more years. Our health is good and my company still likes me so I can stay if I like but leaning towards checking out now versus two more years.

Really struggling with this. My gut says go now.

Thoughts?

Here’s my two cents: while having enough money to retire is obviously crucial, it’s even more important to think about how you’ll spend your time and shape your life for the next, hopefully, 40+ years. It’s as clear as night follows day—if you simply hunker down and spend your days couch surfing, your retirement might not last as long as you'd hope. Being active, exercise your brain and staying purposeful is the key to a fulfilling and lasting retirement.

 

[Cujet]

For me it is a little deeper. My job, my professional reputation and my profession itself is something I spent my entire adult life building. It wasn't easy,

I have a friend who is a professional pilot (would do it for free)

Like you, my career was "all in" tons of education/training and I reached the top. It was more than a bit concerning to give it all up, to throw it out. Looking back almost a year out now, none of it matters much anymore. Nobody cares, not even me. It was a good way to make a living.

I am now free to do certain projects that interest me. After flying around the globe in my Corporate Aviation job and working on various aircraft located all over the place, I enjoy being home, flying my Cessna and doing nerdy projects.

As for your pilot friend, many of these types find satisfaction in light aircraft ownership after retirement, if they still enjoy flying.

Yesterday over the sugar cane fields and lake Okeechobee, FL:

 

[CorporateSoldier]

Original poster here. Appreciate all the input from everyone. A couple of thoughts with some of the recent posts in mind.

While I grew up with very little and have ended up financially better off than most, I don't think I will have much of an issue walking away from the status and identity that comes from my job when I retire. The research I have done indicates none of that will matter in retirement and I actually find that attractive.

Wife and I have a long list of interests, hobbies and places/ways we want to travel. Not planning to stay home and just watch daytime TV.

Currently trying to get an idea what a severance package might look like and the best way to time that if I decide to go this year.

 

[rembrandt]

First world problems...

 

[Lorenzo]

I'm about the same age, have about the same expense budget--and interests in hobbies and travel--and have saved just a bit over one-half what you have saved. FIRECalc says I might just manage to not outlive my savings. It seems to me it comes down to risk tolerance. I do carry a small amount of anxiety that I might not have saved enough, but I believe that is offset by other, positive emotions, such as enjoyment of each day, the satisfaction of being in control and not beholden to any employer, etc. Except for those who are both very wealthy and very frugal, we all face this dilemma. If you work another two years, will you be satisified 5M is enough, or will you then suffer another bout of "one-more-year" (or two-more-years) syndrome?

 

[Car-Guy]

To reiterate my POV, I'm now in my mid 70's and ~15 years into retirement, rather than working two more years to save another million, I'd pay a million to get two more healthy/younger years back.

 

[Fermion]

Realistically you should think about how many "active" years you have left. I think most people really slow down on travel past 80, so either you retire with 20 travel years left or 22. Thus if you retire at 58, you are gaining 10% life for a cost of 25% increase in nest egg. Up to you if that life/money tradeoff seems worth it.

 

[Car-Guy]

Realistically you should think about how many "active" years you have left. I think most people really slow down on travel past 80, so either you retire with 20 travel years left or 22. Thus if you retire at 58, you are gaining 10% life for a cost of 25% increase in nest egg. Up to you if that life/money tradeoff seems worth it.

I wish.... Some (many?) of us may not even make it to 80, much less be traveling.

Life expectancy is the average number of years a person is expected to live. In the United States, life expectancy at birth in 2022 was 74.8 years for men and 80.2 years for women (or thereabouts)

 

[Fermion]

I wish.... Some (many?) of us may not even make it to 80, much less be traveling.

If you drop it to 70, it is then trading 20% travel life for 25% more nest egg, which is a no brainer to me, retire yesterday!

 

[rembrandt]

I wish.... Some (many?) of us may not even make it to 80, much less be traveling.

Life expectancy is the average number of years a person is expected to live. In the United States, life expectancy at birth in 2022 was 74.8 years for men and 80.2 years for women (or thereabouts)

Yes, 80 would qualify as one of the "no go", "Depends" years.

 

[Cujet]

Realistically you should think about how many "active" years you have left. I think most people really slow down on travel past 80, so either you retire with 20 travel years left or 22. Thus if you retire at 58, you are gaining 10% life for a cost of 25% increase in nest egg. Up to you if that life/money tradeoff seems worth it.

YES! By percentage of what's left, that's a "no brainer' for many of us. Especially those of us with health problems and no expectation of 80+.

I'm 61, dad made 70. Until last month I was worse than he was at 61.

I retired at 60. If I end up in a wheelchair before 65 like dad did, each additional year worked would be 20-25% of 'useful years', not 5%.

 

[Closet_Gamer]

OP - if you’re going to work another two years to add another $1m, make sure that million has a real, specific purpose and isn’t just moving forward on inertia because you’ve been so diligent all these years.

If I’d gone another 3 years, we’d have accumulated another $1m. That would have moved us from a beach house that is 600 feet from the beach to oceanfront.

I’m quite happy to spend these three years walking a bit to/from the beach rather than sitting in staff meetings earning money so that someday I didn’t have to walk at all to get on the beach.

A good friend’s sister just died of a stroke at age 51. She appeared healthy. Next day she was gone. DW almost died at 48 but thankfully recovered.

Life is not guaranteed.

If there isn’t something specific - nearly transaction - that keeps you working so you can get/do that thing … then punch out.

My $0.02.

 

[CorporateSoldier]

OP - if you’re going to work another two years to add another $1m, make sure that million has a real, specific purpose and isn’t just moving forward on inertia because you’ve been so diligent all these years.

If I’d gone another 3 years, we’d have accumulated another $1m. That would have moved us from a beach house that is 600 feet from the beach to oceanfront.

I’m quite happy to spend these three years walking a bit to/from the beach rather than sitting in staff meetings earning money so that someday I didn’t have to walk at all to get on the beach.

A good friend’s sister just died of a stroke at age 51. She appeared healthy. Next day she was gone. DW almost died at 48 but thankfully recovered.

Life is not guaranteed.

If there isn’t something specific - nearly transaction - that keeps you working so you can get/do that thing … then punch out.

My $0.02.

Very well said.

For us, the additional money would be more for peace of mind and not additional lifestyle.

We are both healthy and active at 58 but I expect to slow down a lot around 70 and not sure I will be here after 80. Just trying to be realistic and planning things based on data and averages.

 

[RetiredHappy]

Yes, 80 would qualify as one of the "no go", "Depends" years.

Not necessarily but I get it. Husband is 77 this year and still go-go, golfing 4 days a week, doing most of our driving and vacations 3 months a year, broken into 3 trips. We have several friends who are in their early 80s in similar fitness level and are also in great health.

I have come think of "Depends" years as when one is in their 90s.

 

[Car-Guy]

Not necessarily but I get it. Husband is 77 this year and still go-go, golfing 4 days a week, doing most of our driving and vacations 3 months a year, broken into 3 trips. We have several friends who are in their early 80s in similar fitness level and are also in great health.

I have come think of "Depends" years as when one is in their 90s.

"At this point", I still know a good number of people in their 60's, some in their 70's, a few in their 80's and none in their 90's. I've known a lot of 80 and 90 year old folks over the years and I never met one yet that I would aspire to be like if/when I reach that age. YMMV