What's the deal with 45?

[kgtest]

I chose 50. I have been working part time for a while... 10 of the 12 months a year at best the past half-decade.

That was the most surprising part to me. I spent half the year "unemployed," even though we are financially independent, I still considered it unemployed.

My job is cake. I should never complain, but I do usually when I am unemployed. That's how I know 45 is not the right time.

I also want a larger cushion with 3 smart kids, I want to be able to support their dreams in different ways that were not available when I was young.

Time is our greatest asset, so trying to spend as much time around the kids without getting in their way.

Life is a balance.

 

[Diogenes]

...the optimization problem always seems to end in a OMY infinite loop:

We have closer to $4MM, and it will take N years to reach $5MM or $6MM. We'll be N years older then, having spent N more years working away what are the N healthiest remaining years of our lives. Small values of N imply SORR likely wasn't a problem, and large values of N mean we're right back to OMY until the 'RE' part of FIRE falls off entirely.

Yes, that is the core dilemma. But there are solutions:

1. Are you fundamentally disaffected by the idea of full-time work, or is it more a case of wishing to feel like a classical aristocrat, for whom employment is a gentleman's occasional hobby? If the former, then retire as soon as pecuniary considerations allow. If the latter, then OMY isn't so nettlesome.

2. Are you already settled in your eventual retirement location? If so, then again OMY is fine. Why? Because you are already "there", where you're going to be. Contrast that with say a petroleum engineer who made his career in Houston, but who hates the heat and humidity... and yearns to move back to, say, the Pacific NW. For this person, retirement isn't just cessation of full-time work.. it's a long-desired change in lifestyle. OMY means delay of that change.

3. Do you foresee any future scenario where you'd like to return to work? If so, then OMY makes sense, while we mull options and consider what might motivate our future selves. If instead you feel that work is only a paycheck, and if the money stays vibrant then one can foreswear working completely... then go ahead and retire now.

4. Have you formed an engaging life outside of work? If not, do OMY while you figure that out.

Here's the best part: you're only 50! You can spin the OMY hamster wheel for another 5-7 years, and still be able to proudly say that you've retired early!

 

[A Bird In Hand]

Yes, that is the core dilemma. But there are solutions:

First, thank you for the thoughtful reply. If any of my responses below look like rebuttals, I'm not trying to be argumentative. This is just the method that I often use for grappling with challenging questions.

1. Are you fundamentally disaffected by the idea of full-time work, or is it more a case of wishing to feel like a classical aristocrat, for whom employment is a gentleman's occasional hobby? If the former, then retire as soon as pecuniary considerations allow. If the latter, then OMY isn't so nettlesome.

Mostly we're starting to feel burned out, and stressed about w*rk more frequently. I could easily imagine taking on some sort of low-stress PT w*rk in the future to stave off boredom (should that manifest), ease concerns about a prolonged down market, get health insurance if ACA goes sideways, etc. I could also imagine pursuing a small side hustle related to one of my hobbies.

2. Are you already settled in your eventual retirement location? If so, then again OMY is fine. Why? Because you are already "there", where you're going to be.

We are very likely where we intend to stay indefinitely. Future state tax policy changes could cause us to reconsider, but otherwise we're happy where we are. This doesn't seem like a good reason to OMY to me though. It's frustrating to have our time constrained by j*bs, regardless of where we are.

3. Do you foresee any future scenario where you'd like to return to work?

Full-time? I really don't think so. The only way I see that happening is if I find a passion project that turns into something I get paid for. But regular, full-time employment where I don't have nearly full autonomy? That's the opposite of what I want.

4. Have you formed an engaging life outside of w*rk? If not, do OMY while you figure that out.

Not really, but I put a lot of the blame for that on my j*b for leaving me stressed out and tired even when I'm not w*rking. I can think of a thousand things I'd rather be doing than w*rking, from puttering around the garden, to hiking with my wife and/or kids, to baking a loaf of sourdough every day, to tackling my backlog of unread books, to going out for a coffee and a stroll on a nice day, to continuing my heretofore fruitless pursuit of playing guitar halfway decently before arthritis makes it too painful, to finally organizing the garage and basement...etc. Maybe that doesn't sound particularly engaging to some people, but I guess I'm mostly satisfied with simple things.

Here's the best part: you're only 50! You can spin the OMY hamster wheel for another 5-7 years, and still be able to proudly say that you've retired early!

I acknowledge that retiring well before sixty, likely with top 1 percentile retirement assets, is still an excellent result. Yet to me the opportunity cost is wasting of my remaining prime years. I view hanging on until 55 for easier access to pre-tax savings as the worst realistic case scenario for us.

 

[HI Bill]

We have closer to $4MM, and it will take N years to reach $5MM or $6MM. We'll be N years older then, having spent N more years working away what are the N healthiest remaining years of our lives.

I get it. But to me, it's about the ability to maximize spending in a meaningful way, if you want a better house, more travel, higher quality of hotels, fancy cars or hobbies. If you are set on ER now, go for it. Another path to $5M+ would be to simply live off less for now and allow your investments to continue to grow. I ER'd with $3.2M, with a 4.3% WR. It bumped to $5M in just 3 years, even with spending!

 

[tulak]

The last 3 years have been phenomenal.

If I knew the next 3 would be the same, I’d be gone real quick.

 

[A Bird In Hand]

The last 3 years have been phenomenal.

If I knew the next 3 would be the same, I’d be gone real quick.

Same. I'd invest more aggressively too. Alas, my nagging suspicion that we're more likely to experience a correction instead makes the decision much harder.

 

[Koolau]

Job well done! Personally, at your age, I'd shoot for $5-6M, depending on your desired lifestyle. More always provides more possibilities. I think the answer to why 45? is that about 20-24 years is typically what it takes most to achieve FI if working actively and effectively towards that goal and living way below one's means, or earning an outsized income.

I think that's a very good point HI Bill. Had I had any idea what I was doing financially, I could have retired at around 45. Instead, I flailed about, seeing what w*rked and what didn't. So by the time I figured it all out, I was 51 (when I reached FI). I will admit that part of the age-51 number is that's when my pension/retiree HI vested - so there's that.

BUT basically, 20 to 24 years "should" be enough to become FI if you do it right! I got the "saving" thing right, but the investing? Not so much! That took a "few" years.

 

[AZsniper]

Way back, I chose 42, but actually retired at 46 after a few "one more year" situations. I could have retired at 42 but as I got closer I realized the retirement life that I wanted to live was not including having kids at home. So we waited until our youngest graduated HS last year and retired. Looking back, I feel that was the right decision for me. I think it's great to set a goal that is 5,10,20 years out but when you get closer, feel free to adjust things because there are a lot of other factors that come into play that you may not consider today. I am glad I stayed at work those last few years because I grew in a lot of ways from some leadership opportunities that made me a better father, husband and better human. Just my experience.

 

[Montecfo]

Same. I'd invest more aggressively too. Alas, my nagging suspicion that we're more likely to experience a correction instead makes the decision much harder.

Why? Corrections happen. every 1-2 years. So anytime you choose you are months away from one, potentially .

I think you want to find an AA and stick with it.