Should I pull the trigger? Would you if you were me?

[tofer]

Should I pull the trigger and retire? What do you think? Here is our situation: Age 53, married, no kids. Total net worth $3m PLUS the house worth $1.3M that is paid off. Annual expenses are between $110-$130K, depending on how much we choose to travel, remodel, or upgrade our cars. Plus taxes that will vary because about 1/3 of our savings are already post-tax. I've been in my current job for 15 years and I can do it in my sleep. I work from home, full time, in the tech industry, and can get the job done in about 25 hours per week, leaving my afternoons free. I don't hate the work, but I'm not motivated to do more in this job. I am underpaid for the tech industry, but would probably face age discrimination if I went looking. DW also works, from home, and is paid well but she is ready to quit as soon as I am. I'm happy with my lifestyle, and have time for my hobbies, but wish we could take long road trips in our RV. I also wish I could do more long (all day) bike rides. When not traveling, cycling, or working, I'm not sure what I could fill the days with. I fear boredom. One of my hobbies is researching and spending on big things like remodels and cars, so I also fear not having money to do that.

 

[Lewis Clark]

Have you considered taking road trips and working from the RV instead of the house? If your work takes about 25 hours per week you could easily do both.

 

[njhowie]

Yes do it. Also, reduce your expenses to under $100k/year. There's certainly fat in your budget.

Folks like yourself should be doing better things with their time - enjoying it, and/or doing independent "work" that will bring them satisfaction. Don't waste your talent for the employer.

I was in a similar position (also tech industry) before hanging it up. Work became a boring routine. Since leaving, I've been free to do my own "work" projects, where I knew the value which megacorp never really appreciated. Now instead of making money for megacorp, I make it for myself - on my schedule, when I feel like doing it. The level of satisfaction is unmeasurable.

 

[MarieIG]

Re-visit the issue in July; post Covid (I hope).

And then look at post #2.

You two are both close to age 55 (for the 72t option) which is something you should look into before pulling the plug.


You may find your work a bit boring, but there is a whole lot worse out there (such as being stressed out of your mind or downright abused, not to mention being paid minimum wage for miserable jobs). You also may be underpaid for the tech industry, (and I understand that being underpaid is annoying to say the least) but could you get similar money elsewhere or doing something different entirely? And - 25 hours per week. (So that we're clear about this - I'm jealous.)

From your post, you also want to be able to spend on your cars/remodels; and don't really want to HAVE to cut your budget.

So, if I were you, I would: a) pat myself really hard on the back for getting myself into such good shape financially at 53; b) know that if you lost your job or things get ugly - you can go at any time; c) start working on lifestyle while still employed (bike trips over the weekend, setting up the RV and practicing small trips while working remotely; and d) continue to plot your financial glide-path. (Reading and research.)

Also plug your numbers into FireCalc. I did - but just used the 3 million for 40 years - without considering SS or the house value. (You may want to keep the home equity value in your back pocket to fund admission and payments in a CCRC way in the future, for you and DW, if necessary.)

And finally I know you have some of the information, but this is a very good list to review: https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

 

[flyingaway]

You could retire, especially you have social security for the extras.

However, I am not sure that you want to retire or you are ready to retire.

If I were you, I would wait until the pandemic is over, and see if I could do the things I want to do with a 25 hour job that I could do at home.

 

[Masquernom]

You didn't mention if either of you will have pensions when you retire. If not, I'd say work till you're 55.
Also, how will you handle health insurance? It's a long time to medicare at that age.

 

[jollystomper]

Have you considered taking road trips and working from the RV instead of the house? If your work takes about 25 hours per week you could easily do both.

+1

Perhaps for the next two years, until you are 55, you can try this. You have the ability to to "glide" into a retirement-like lifestyle before you actually have to retire.You would not be sacrificing that much time and effort for your job, given how you describe your current job effort. It gives you a couple of years to build up more assets, if desired, and have a higher retirement budget. It also aligns with the 72t option.

 

[jimbee]

I pulled the trigger with less savings, at nearly the same age. So I'd quit.

 

[HI Bill]

You two are both close to age 55 (for the 72t option) which is something you should look into before pulling the plug.

I think you may be confusing the IRS "Rule of 55" with the 72(t) provision. The Rule of 55 effectively says that if you retire in the year to you turn 55, up until 59.5, you can take 401(k) distributions penalty-free (paying only taxes, but no 10% penalty). IRS rule 72(t)(2)(A)(iv) allows one to take penalty-free withdrawals from IRA prior to age 59 ½ by making ‘substantially equal periodic payments’ (SEPP) based on one of 3 methods as long as payments continue at least 5 years, or until 59.5, whichever is later. Rule 72(t) has draconian penalties if you don't follow your SEPP distributions precisely, or don't follow the time requirement.

 

[DayVee B]

Don't know where you live. But I'd sell the $1.3M house. My guess is you could find a REALLY nice, comfortable house, including some land or out building for your hobby of car restoration, with a lower taxes/costs for $300K and it would give you an extra $1M retire on. Since you've got the RV you could have a residence anywhere and just take the RV if you wanted to wake up on the coast or in a lush national forrest, even if you kept working remotely a while longer this could really help in building your pool of $$ for retirement.

 

[pb4uski]

A $3m portfolio plus SS should easily support $110-130k of annual spending, so you already "have enough" financially. Since ~$1m is already post tax, you will presumably be in a low tax bracket for the first 10-15 years and will be able to do a Roth conversion ladder at low tax cost and then use the maturing tranches of the ladder for some of your spending if your taxable account funds run dry.

I worked 50% part-time for many years before retiring. Change is hard, particularly when you are giving up a six-figure income that would be hard to replicate if it ends up that you later decide that you made the wrong decision.

Jump right in... the water is fine.

 

[pacergal]

How much flexibility do you haven your job? If it truly takes you only 25 hours, shorten your work week to 3 -10 hour days, and have 4 days free for biking, travel in the RV.
Or, what's to stop from taking long trips anyway and work along the way?
It seems that you have enough to retire if you are ready.
If not, maybe reconfiguring how/when you get your work done might give you some satisfaction and more time to do what you want now while you work a few more years?

 

[someguy]

Perhaps challenge yourself to cut the 25/week down to something less, say 15? Make your job seeing what you can automate, delegate or abnegate. If you get terminated, it'll probably be a layoff with severance (since you're in a protected class) and who cares as you're FI, or you may find you're more valuable and effective than ever

 

[Gotadimple]

Should I pull the trigger and retire? ... I am underpaid for the tech industry, but would probably face age discrimination if I went looking. DW also works, from home, and is paid well but she is ready to quit as soon as I am. I'm happy with my lifestyle, and have time for my hobbies, but wish we could take long road trips in our RV. ... When not traveling, cycling, or working, I'm not sure what I could fill the days with. I fear boredom.

You will probably be just fine, but until you work the numbers you won't know that - that's Part 1.
Part 2 is making sure you will be happy doing something different (which does not mean working for money).

I suggest both of you read How to Retire Happy Wild & Free by Ernie Zelinski. You can find it at most books stores, esp. Amazon or B&N. It isn't about finances. It's about everything else in your life and what you want to fulfill - just those same issues you discuss in your original post.

- Rita