Race from $2M to $4M...and Beyond!

[deborah]

Do you want to come back to Australia? As the government has recently severely limited the numbers being repatriated, many people are being bumped from their flights. There are still enormous numbers of people wanting to come back. The media are saying that bumping is happening because the airlines are getting people paying for more expensive fares, and because they can only have 30 or 50 people on a plane (due to the government repatriation limits), they’re bumping those in economy class. As this is illegal, the appropriate regulatory authority is looking into it, but they probably can’t do much as many of the fares are paid overseas.

Actually, I suppose it’s irrelevant to you because you won’t be flying in economy. So you might be bumping others.

[Fomerly known as something]

I do have a journal thread, which this thread is not. I go into more detail about my life over there! This thread is just the race to $4MM :P

This thread kinda became the hangout for Mustachians that hit 2M and found themselves going higher.  The 'and beyond' and 'race' part evolved a bit to just mean, this is a good place for folks to discuss how they are enjoying their FI and what the future holds.  There is a 4M and beyond thread that might be more appealing to you, if 4M+ is your goal.  I'll check out your journal, but please throw in more to this thread than what is typical in a 'race to' thread because it kinda detracts from those of us just hanging out here enjoying our FI.  Not sure if you've really read the full thread, but you'll understand us better if your TSLA stock slows down and/or you realize you have enough to already accomplish stuff 90+% of the world can only dream of (like ER, dream home location, dream pursuits that don't pay as well, helping others, self actualization, etc).  Glad to have you here, sorry to go all 'hall monitor' on you.

That’s why I like it here even though I only qualify right now using fuzzy math due to my pension.  I find the $1-2 million boring since it’s just people reporting numbers.

[Bateaux]

I do have a journal thread, which this thread is not. I go into more detail about my life over there! This thread is just the race to $4MM :P

This thread kinda became the hangout for Mustachians that hit 2M and found themselves going higher.  The 'and beyond' and 'race' part evolved a bit to just mean, this is a good place for folks to discuss how they are enjoying their FI and what the future holds.  There is a 4M and beyond thread that might be more appealing to you, if 4M+ is your goal.  I'll check out your journal, but please throw in more to this thread than what is typical in a 'race to' thread because it kinda detracts from those of us just hanging out here enjoying our FI.  Not sure if you've really read the full thread, but you'll understand us better if your TSLA stock slows down and/or you realize you have enough to already accomplish stuff 90+% of the world can only dream of (like ER, dream home location, dream pursuits that don't pay as well, helping others, self actualization, etc).  Glad to have you here, sorry to go all 'hall monitor' on you.

That’s why I like it here even though I only qualify right now using fuzzy math due to my pension.  I find the $1-2 million boring since it’s just people reporting numbers.

I posted here as an imposter initially.   I kicked in some pension and real estate.   Then just pension that now has a cash value as of August 1st.  Now, finally, stand alone stocks, bonds, REITs meet the 2 million.  Add all the crap up and it's approaching 3 million.  I felt the same way, wanted out of the 1 to 2.  CarJack reached out a hand, dropped the tailgate and I jumped in a little early.

[Bateaux]

I was at 1.8M putting everything in one basket.  Builds quick.  Less than 3 years ago.

Picture you're racing a bicycle and I'm on the back of a pickup, laying down in the bed with my arm outstretched.  Come on.....you can do it!!!

[tooqk4u22]

I do have a journal thread, which this thread is not. I go into more detail about my life over there! This thread is just the race to $4MM :P

This thread kinda became the hangout for Mustachians that hit 2M and found themselves going higher.  The 'and beyond' and 'race' part evolved a bit to just mean, this is a good place for folks to discuss how they are enjoying their FI and what the future holds.  There is a 4M and beyond thread that might be more appealing to you, if 4M+ is your goal.  I'll check out your journal, but please throw in more to this thread than what is typical in a 'race to' thread because it kinda detracts from those of us just hanging out here enjoying our FI.  Not sure if you've really read the full thread, but you'll understand us better if your TSLA stock slows down and/or you realize you have enough to already accomplish stuff 90+% of the world can only dream of (like ER, dream home location, dream pursuits that don't pay as well, helping others, self actualization, etc).  Glad to have you here, sorry to go all 'hall monitor' on you.

That’s why I like it here even though I only qualify right now using fuzzy math due to my pension.  I find the $1-2 million boring since it’s just people reporting numbers.

I posted here as an imposter initially.   I kicked in some pension and real estate.   Then just pension that now has a cash value as of August 1st.  Now, finally, stand alone stocks, bonds, REITs meet the 2 million.  Add all the crap up and it's approaching 3 million.  I felt the same way, wanted out of the 1 to 2.  CarJack reached out a hand, dropped the tailgate and I jumped in a little early.

Uuuhhhggg!   Here I was living blissfully in the $2-4M club (with a little beyond for good measure) and now I find out there is a $4M and beyond.   WTF! Now I feel exceptionally poor and must return to work to race ever higher,  for that is what we do. 

That seems like a lot of work, nevermind. 

[Dicey]

IMO, if you're at that level and still working, you're doing it wrong.

[JoJoP]

@MaybeBabyMustache , in spite of the naysayers predicting an eminent RE crash, I think SF real estate is and remains a strong investment.  And you're living there, right?  So you get to enjoy your cool vibe neighborhood.   I think you need to ask yourself questions more along the line of "Are we ready to move?  Downsize? Relocate?"  Then base your choices on those answers.   There's no wrong answer.  It's glorious to buy low and sell high, especially if you're lucky enough to catch both the trough and the peak-- oh, in SF real estate those numbers are mindboggling--but I wouldn't rush the decision based on what the RE market might do in the future. 

We've just bought 4 rental houses along the Oregon Coast, but their performance as an investment merely duplicates what we were able to do closer to home 12 years ago.  Now, prices have doubled in our area and we had to cast a wider net or accept a much smaller return.   Hind sight is 20/20.    In other words, if it's not broke, don't fix it.   If you're looking for a good investment, look no further than your front door.  It is a good investment and you already own it.  Stay until you're ready to go.  Then move on with confidence and a fat wallet toward your next life chapter.

[Dancin'Dog]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

[MaybeBabyMustache]

@MaybeBabyMustache , in spite of the naysayers predicting an eminent RE crash, I think SF real estate is and remains a strong investment.  And you're living there, right?  So you get to enjoy your cool vibe neighborhood.   I think you need to ask yourself questions more along the line of "Are we ready to move?  Downsize? Relocate?"  Then base your choices on those answers.   There's no wrong answer.  It's glorious to buy low and sell high, especially if you're lucky enough to catch both the trough and the peak-- oh, in SF real estate those numbers are mindboggling--but I wouldn't rush the decision based on what the RE market might do in the future. 

We've just bought 4 rental houses along the Oregon Coast, but their performance as an investment merely duplicates what we were able to do closer to home 12 years ago.  Now, prices have doubled in our area and we had to cast a wider net or accept a much smaller return.   Hind sight is 20/20.    In other words, if it's not broke, don't fix it.   If you're looking for a good investment, look no further than your front door.  It is a good investment and you already own it.  Stay until you're ready to go.  Then move on with confidence and a fat wallet toward your next life chapter.

@JoJoP - this was really helpful, and I agree. I need to be happy with where we are & enjoy. Things may shift around here & there with pricing, but this is where we'll be until (at least) the kids are done with school.

Would love to know more about where you own on the Oregon coast, if you are comfortable sharing. It's our house, but primarily for family usage (don't really rent), but I've never had so many people ask to use it, thanks to COVID. It's in hot demand right now. :-) We were there in June for three weeks & loved it, and expect to spend more time there due to flexible work options.

[LightTripper]

Ahh well, I didn't realise pension and real estate didn't count.  I'm still safely in the fold on a USD basis I think.

I am talking to my big boss about going onto a flexible contract on Friday.  I have a big project I need to finish that should be done by mid January at latest, but if it wraps up earlier (it's a legal process that may settle out of court if I'm lucky) then I'll drop my hours and ask to switch to the flexible contract sooner than that.

I really think I may just fully walk.  I always assumed I would at least finish off the projects I've started (there are a couple of things that may pop back up over the coming years), and I'd still like to do that ideally - but the working environment is feeling very toxic right now, and if I can't finish up my ongoing projects without feeling exposed to that then I am increasingly thinking I'm ready to just cut all ties and go.

Scary, but good to finally have that clarity, after a long time of feeling (I now realise) very stressed and unmoored by the idea of just "stopping".

It's so weird, 2020 was going to be my amazing year of working less, going out in the evenings, having some "me time" and generally wrapping my head around the idea of retirement.  It's been quite the opposite (working more, staying in, no "me time" whatsoever since February)!  But still, I've made some progress towards where I need to be mentally.  So that's all good I guess.  And certainly I have a lot less to complain about than most.

[Dicey]

Ahh well, I didn't realise pension and real estate didn't count.  I'm still safely in the fold on a USD basis I think.

Dicey chuckles and asks, "Sez who?" It's not like anybody's checking portfolios at the door.

Funny, the more I have, the less I include in my (mostly mental) net worth calculations. The value of cars, household gioods, tools, etc. are just the beginning of a list of things I rarely bother to think about, much less count anymore. Post-FIRE, a spitball estimate works just fine for me. Pre-FIRE, I tracked everything.

[Exflyboy]

Ahh well, I didn't realise pension and real estate didn't count.  I'm still safely in the fold on a USD basis I think.

Dicey chuckles and asks, "Sez who?" It's not like anybody's checking portfolios at the door.

Funny, the more I have, the less I include in my (mostly mental) net worth calculations. The value of cars, household gioods, tools, etc. are just the beginning of a list of things I rarely bother to think about, much less count anymore. Post-FIRE, a spitball estimate works just fine for me. Pre-FIRE, I tracked everything.

What assets are counted to get you into this club is a bit like the difference between good sex and bad sex.... There is no bad sex..:)

Like you though in the beginning it was like.. "I'm sure I could get another couple hundred if I sold my aging computer"..

Now its "if its not in an account its not counted", except maybe a hand wave at pension and house value.

[Exflyboy]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

There are these little blue pills you can get..:)

[tooqk4u22]

Ahh well, I didn't realise pension and real estate didn't count.  I'm still safely in the fold on a USD basis I think.

Dicey chuckles and asks, "Sez who?" It's not like anybody's checking portfolios at the door.

Funny, the more I have, the less I include in my (mostly mental) net worth calculations. The value of cars, household gioods, tools, etc. are just the beginning of a list of things I rarely bother to think about, much less count anymore. Post-FIRE, a spitball estimate works just fine for me. Pre-FIRE, I tracked everything.

Yeah, my mental NW is way different than my actual NW, in reality my mental NW is only my investments that I will be living off of at 3-4% WR.   My actual NW also has house, college funds, HSA accounts, and a few sinking fund accounts for home/auto repairs and auto replacement and vacation funds.   I never include any personal property.   

BTW - Those sinking funds have grown quite large as I have put in about $750/month for a long time but then never transferred money out of them as I incurred those expenses. Now that I am FIRE though I still send the $750/mo but will start withdrawing as consumed. 

[SeattleCPA]

@Buffaloski Boris - I was uncomfortable with the price tag when we bought it, and we've invested money in the house, plus the market has continued to rise steadily. So... I'd say I'd really have to close my eyes at the idea of ever spending that kind of money on a house (even more than we paid before). Realistically, while property values might drop a bit, this is where we want to be for the next five years at least, and it's hard to predict what will happen in that time.

Sounds to me like you’ve made up your mind. If you’d buy today, eyes closed or shut, then you have your answer. Something you might think about is refi or cashing out given current interest rates. IIRC, real estate debt is non recourse in California.

Except for the mistake I fixed, I pretty much agree with BB's thoughts. Bonus is that I'm in the Bay Area, too. OMG, I can't believe how much we paid for our house and what we've spent to maintain it for the last seven years. I also can't believe how much it's gone up in value. If you're going to continue to work, I think I'd ride the Real Estate Pony until you're ready to saddle up and get out of Dodge.

I really, really like BB's suggestion to re-fi and pull some of your equity out, but be careful of IRS limits on deductibility. Just for fun, let's ping some experts. Are @Cpa Cat, @SeattleCPA, or @seattlecyclone still in the house? Anyone else who knows is welcome to chime in.

The interest on the "extra money" you take out at a refi isn't qualified mortgage interest and so may not produce an itemized deduction. I think that's your question...

[LWYRUP]

Ahh well, I didn't realise pension and real estate didn't count.  I'm still safely in the fold on a USD basis I think.

Dicey chuckles and asks, "Sez who?" It's not like anybody's checking portfolios at the door.

Funny, the more I have, the less I include in my (mostly mental) net worth calculations. The value of cars, household gioods, tools, etc. are just the beginning of a list of things I rarely bother to think about, much less count anymore. Post-FIRE, a spitball estimate works just fine for me. Pre-FIRE, I tracked everything.

Yeah, my mental NW is way different than my actual NW, in reality my mental NW is only my investments that I will be living off of at 3-4% WR.   My actual NW also has house, college funds, HSA accounts, and a few sinking fund accounts for home/auto repairs and auto replacement and vacation funds.   I never include any personal property.   

BTW - Those sinking funds have grown quite large as I have put in about $750/month for a long time but then never transferred money out of them as I incurred those expenses. Now that I am FIRE though I still send the $750/mo but will start withdrawing as consumed.

I just distinguish between net worth and "FIRE stash."

Net worth includes home, emergency fund, 529s, etc.  I don't bother counting cars or personal property because it's not spendable money unless I am willing to sell them, and if I am willing to sell them then I should probably just get on with it, so everything I own other than my house is pretty much earmarked to be used until its worn down and unusable.

My "FIRE stash" excludes all of those items.  It's basically retirement funds plus taxable investment accounts. 

If you own rental property, I think you either calculate it based on NOI and leave out the equity or you calculate the equity and ignore the NOI.  Because you can't get at the equity unless you give up the NOI.  I'd probably use NOI personally and treat rental property as an income source and ignore the equity. 

[JoJoP]

It's time for me to step in, right on cue, and wave my little "rentals count in NW tallies" flag.  Net worth is... NET WORTH. 

Reminder:  Not everybody takes the same path.  If I inherited the Hope Diamond or an original Banksy or the Mona Lisa, it would count.   Does my wedding ring count?... no, of course not, because I don't plan on selling it as an asset.    We have more rentals than I can count on my fingers, they're all paid for.  Like @SwordGuy, we also have farmland.  It's not a backyard garden with a few tomato plants.   We don't live in all these houses, they are liquid assets.  We're pretty far into the "and beyond" category and it's about 90% RE equity.   

[LWYRUP]

It's time for me to step in, right on cue, and wave my little "rentals count in NW tallies" flag.  Net worth is... NET WORTH. 

Reminder:  Not everybody takes the same path.  If I inherited the Hope Diamond or an original Banksy or the Mona Lisa, it would count.   Does my wedding ring count?... no, of course not, because I don't plan on selling it as an asset.    We have more rentals than I can count on my fingers, they're all paid for.  Like @SwordGuy, we also have farmland.  It's not a backyard garden with a few tomato plants.   We don't live in all these houses, they are liquid assets.  We're pretty far into the "and beyond" category and it's about 90% RE equity.

Of course rentals count for net worth.  But the equity for net worth shouldn't count for the 4% rule because you cannot unlock that equity unless you sell, and if you sell you can't count the income. 

[JoJoP]

It's time for me to step in, right on cue, and wave my little "rentals count in NW tallies" flag.  Net worth is... NET WORTH. 

Reminder:  Not everybody takes the same path.  If I inherited the Hope Diamond or an original Banksy or the Mona Lisa, it would count.   Does my wedding ring count?... no, of course not, because I don't plan on selling it as an asset.    We have more rentals than I can count on my fingers, they're all paid for.  Like @SwordGuy, we also have farmland.  It's not a backyard garden with a few tomato plants.   We don't live in all these houses, they are liquid assets.  We're pretty far into the "and beyond" category and it's about 90% RE equity.

Of course rentals count for net worth.  But the equity for net worth shouldn't count for the 4% rule because you cannot unlock that equity unless you sell, and if you sell you can't count the income.

Correct, I wouldn't use equity for the 4% rule, I'd use rental income return.  Our rents serve like your 4% draw down.  In both cases, the asset is left alone to earn its money.   

[SwordGuy]

Net Worth is what it is.   Don't muck with it to turn it into something else.

FI Income is what it is.   Don't confuse it with Net Worth.   They are two different measurements that are used for two different purposes.

I started up a fun poll for people to track their Race to 100% FI a while back.  I included examples of what counts and what doesn't.

https://forum.mrmoneymustache.com/throw-down-the-gauntlet/race-to-100-fi!/

[Bateaux]

With no clue as how to turn this jumbled mess into a paycheck replacement, I'm going to move the goal posts out another 500K and see if that brings more clarity.   1.5 million was gonna be it.  Silly me.  Then 2 million.  Nope not a clue yet.  Then 2.5 million.  Nope, if anything I'm more nervous than ever.  Moving on to 3 million. That's got to be it right?  We'll see.  Probably more an age now than a number. Everthing gets easier taxwise at 55.  1077 days to go.

[SwordGuy]

With no clue as how to turn this jumbled mess into a paycheck replacement, I'm going to move the goal posts out another 500K and see if that brings more clarity.   1.5 million was gonna be it.  Silly me.  Then 2 million.  Nope not a clue yet.  Then 2.5 million.  Nope, if anything I'm more nervous than ever.  Moving on to 3 million. That's got to be it right?  We'll see.  Probably more an age now than a number. Everthing gets easier taxwise at 55.  1077 days to go.

@Bateaux ,
How about entering a case study that shows your expenses, income streams as you understand them, and your assets?  Plus any goals you have that are relevant.

Pop a link to it here and I know most of us would be more than happy helping you understand how to turn it into sustainable income.

[Buffaloski Boris]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

There are these little blue pills you can get..:)

That’s not mustachian.  You don’t get blue pills that cost $40, you get white pills for $1.

[Bateaux]

With no clue as how to turn this jumbled mess into a paycheck replacement, I'm going to move the goal posts out another 500K and see if that brings more clarity.   1.5 million was gonna be it.  Silly me.  Then 2 million.  Nope not a clue yet.  Then 2.5 million.  Nope, if anything I'm more nervous than ever.  Moving on to 3 million. That's got to be it right?  We'll see.  Probably more an age now than a number. Everthing gets easier taxwise at 55.  1077 days to go.

@Bateaux ,
How about entering a case study that shows your expenses, income streams as you understand them, and your assets?  Plus any goals you have that are relevant.

Pop a link to it here and I know most of us would be more than happy helping you understand how to turn it into sustainable income.

There is just too much chaos in the system.  Maybe at the end of the year we'll try and come up with a plan.  I appreciate the offer and when the time comes, I'll be very open to opinion.  I value your experiences far more than talking to some dimshit at Edward Jones or Ameritrade.  The changes have to be made internal first.  We'll see what January brings and go from there.

[Dancin'Dog]

With no clue as how to turn this jumbled mess into a paycheck replacement, I'm going to move the goal posts out another 500K and see if that brings more clarity.   1.5 million was gonna be it.  Silly me.  Then 2 million.  Nope not a clue yet.  Then 2.5 million.  Nope, if anything I'm more nervous than ever.  Moving on to 3 million. That's got to be it right?  We'll see.  Probably more an age now than a number. Everthing gets easier taxwise at 55.  1077 days to go.

@Bateaux ,
How about entering a case study that shows your expenses, income streams as you understand them, and your assets?  Plus any goals you have that are relevant.

Pop a link to it here and I know most of us would be more than happy helping you understand how to turn it into sustainable income.

There is just too much chaos in the system.  Maybe at the end of the year we'll try and come up with a plan.  I appreciate the offer and when the time comes, I'll be very open to opinion.  I value your experiences far more than talking to some dimshit at Edward Jones or Ameritrade.  The changes have to be made internal first.  We'll see what January brings and go from there.

1077 day isn't all that long.  It'll fly by. 

[soccerluvof4]

With no clue as how to turn this jumbled mess into a paycheck replacement, I'm going to move the goal posts out another 500K and see if that brings more clarity.   1.5 million was gonna be it.  Silly me.  Then 2 million.  Nope not a clue yet.  Then 2.5 million.  Nope, if anything I'm more nervous than ever.  Moving on to 3 million. That's got to be it right?  We'll see.  Probably more an age now than a number. Everthing gets easier taxwise at 55.  1077 days to go.

@Bateaux ,
How about entering a case study that shows your expenses, income streams as you understand them, and your assets?  Plus any goals you have that are relevant.

Pop a link to it here and I know most of us would be more than happy helping you understand how to turn it into sustainable income.

There is just too much chaos in the system.  Maybe at the end of the year we'll try and come up with a plan.  I appreciate the offer and when the time comes, I'll be very open to opinion.  I value your experiences far more than talking to some dimshit at Edward Jones or Ameritrade.  The changes have to be made internal first.  We'll see what January brings and go from there.

1077 day isn't all that long.  It'll fly by.

I missed something, y does turning 55 make taxes easier? Just making sure since I'm in that category I am not missing something! I also agree the 1077 days will fly buy

[Dicey]

No way would I work a thousand extra days I didn't need to. You could spend 77 days learning how turn your "jumbled mess into a paycheck replacement" and get the hell out of the rat race. Isn't that the whole point? It kinda sounds like you feel trapped, which might just be an illusion of your own making.

[pecunia]

I had a checkup at the doctor yesterday.  It was the first checkup since retiring.  He told me that of the people he has seen that retire 75 percent see their health improve.  The other 25 percent have worked physical jobs and are either worn out or take time to slow down without compensating in other ways.

Hard to put a value on all the hiking and other stuff you guys have been talking about.  The hiking and other stuff can have secondary benefits to be considered.

I want to be in the majority the doctor spoke of.

[rmorris50]

NW is kinda useful to feel good about progress in success, but I would not recommend using it to determine FI readiness. I have found lifetime net household cash flow projections much more useful. So I don’t even use the 4% rule, too simplistic.

And I am also trapped at work, due to my own making. It’s the whole “downsize and retire now” or “just work three more years and keep current lifestyle”. Plus I also have a lot of change/chaos going on in life. Will be more settled in three years. Choices, choices.


Sent from my iPhone using Tapatalk

[Exflyboy]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

There are these little blue pills you can get..:)

That’s not mustachian.  You don’t get blue pills that cost $40, you get white pills for $1.

I had no idea what they cost.. I will bow to your considerable expertise on the matter..:)

[Bateaux]

No way would I work a thousand extra days I didn't need to. You could spend 77 days learning how turn your "jumbled mess into a paycheck replacement" and get the hell out of the rat race. Isn't that the whole point? It kinda sounds like you feel trapped, which might just be an illusion of your own making.

I guess I'm grasping for excuses.  August 1st 2020 is the day I became pension eligible.   In 2012 the company robbed most of the pension and extended employee medical insurance coverage to minimum age 55.  Also if you work till 55 then you can get your 401K without the 10 percent penality.  No need for 72T calculations.

[Bateaux]

I had a checkup at the doctor yesterday.  It was the first checkup since retiring.  He told me that of the people he has seen that retire 75 percent see their health improve.  The other 25 percent have worked physical jobs and are either worn out or take time to slow down without compensating in other ways.

Hard to put a value on all the hiking and other stuff you guys have been talking about.  The hiking and other stuff can have secondary benefits to be considered.

I want to be in the majority the doctor spoke of.

Having the body for an active lifestyle is important.

[lhamo]

I missed something, y does turning 55 make taxes easier? Just making sure since I'm in that category I am not missing something!

Most employer-managed retirement plans allow you to take penalty-free (but not tax free) disbursals if you "separate from service" in the year you turn 55 or later.  You have to check the details of your plan to see what type of disbursals are allowed -- some only allow a single lump sum withdrawal.  The rule does not apply to IRA rollovers.

https://tickertape.tdameritrade.com/retirement/rule-of-55-withdrawals-15977

[Bateaux]

NW is kinda useful to feel good about progress in success, but I would not recommend using it to determine FI readiness. I have found lifetime net household cash flow projections much more useful. So I don’t even use the 4% rule, too simplistic.

And I am also trapped at work, due to my own making. It’s the whole “downsize and retire now” or “just work three more years and keep current lifestyle”. Plus I also have a lot of change/chaos going on in life. Will be more settled in three years. Choices, choices.


Sent from my iPhone using Tapatalk

Those golden handcuffs are coated in kid leather at times.   At 28 years working for one company, going to work is like brushing your teeth.  You don't really have to think all that much about it. My Arkansas bikepacking trip next month and October backpacking trip are a hell of a lot harder.  Some vacation.

[Buffaloski Boris]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

There are these little blue pills you can get..:)

That’s not mustachian.  You don’t get blue pills that cost $40, you get white pills for $1.

I had no idea what they cost.. I will bow to your considerable expertise on the matter..:)

Lulz. I really do think I should briefly hijack the thread and have a fireside chat about Erectile Dysfunction and how darn near 100% of guys have it. That’d be fun.

[Exflyboy]

IMO, if you're at that level and still working, you're doing it wrong.

As in running the wrong race. 


I think "winning" is present tense, and "won" is past tense.  Winning is pleasurable to the ego, while retirement presents the fear of dealing with unknowns without a safety net or a familiar roadmap.  And there's also the fear of being with your mate 24/7, without the hormones of a newly wed couple.  ;)

There are these little blue pills you can get..:)

That’s not mustachian.  You don’t get blue pills that cost $40, you get white pills for $1.

I had no idea what they cost.. I will bow to your considerable expertise on the matter..:)

Lulz. I really do think I should briefly hijack the thread and have a fireside chat about Erectile Dysfunction and how darn near 100% of guys have it. That’d be fun.

Yeah, seriously, I'm sure its one of those dirty little secrets that isn't talked about.

[pecunia]

I had a checkup at the doctor yesterday.  It was the first checkup since retiring.  He told me that of the people he has seen that retire 75 percent see their health improve.  The other 25 percent have worked physical jobs and are either worn out or take time to slow down without compensating in other ways.

Hard to put a value on all the hiking and other stuff you guys have been talking about.  The hiking and other stuff can have secondary benefits to be considered.

I want to be in the majority the doctor spoke of.

Having the body for an active lifestyle is important.

I'm sure most of those people were older than 55.  That looks like a magic number when you can bid them adieu.  Working a little longer may buy you some great value for the next 30 years after you retire.

[secondcor521]

No way would I work a thousand extra days I didn't need to. You could spend 77 days learning how turn your "jumbled mess into a paycheck replacement" and get the hell out of the rat race. Isn't that the whole point? It kinda sounds like you feel trapped, which might just be an illusion of your own making.

I guess I'm grasping for excuses.  August 1st 2020 is the day I became pension eligible.   In 2012 the company robbed most of the pension and extended employee medical insurance coverage to minimum age 55.  Also if you work till 55 then you can get your 401K without the 10 percent penality.  No need for 72T calculations.

When I was at your stage, I was combing through HR policies and benefits looking for any way to shorten my time at work.  It doesn't sound like you're too fed up from work yet, so that's a difference between my situation and yours.

However, you can maybe shave off some of those 1,077 days.

As lhamo pointed out, the no-penalty 401(k) rule is separation from service in the year in which you turn 55.  So depending on when your birthday is, you could retire on January 1st at 54-something and still use that rule.  If you haven't already, it would also behoove you to check your 401(k) plan documents to ensure that they will allow you to access your money on the schedule that works for you.  While federal law says they have to allow penalty-free withdrawals, some plans restrict the timing and amounts of your withdrawals.

You could also use up all your vacation and maybe even do a FMLA or personal leave in the months prior to the January 1st of the year in which you turn 55 to shorten it even more.  I did something like that where I did a personal leave of absence 10 weeks prior to my last juicy stock option vest.  I was still employed so the stock options were still intact.  You could do a similar thing with your 401(k) plan.

While 72(t) plans aren't common, the calculations are literally fifth grade math.  Maybe even fourth grade.  If you don't want to do the 72(t) for other reasons, that would make sense, but doing literally two minutes of calculations once a year doesn't seem like much of a reason.

[pecunia]

I've known people to use time just before retirement to get work done on themselves like knee replacements, etc.  They were not only able to take advantage of the good insurance while they still had it, but they were also not there as they were healing up.  Perhaps, this could be an option to use some of the pre-55 time.

[Dicey]

I've known people to use time just before retirement to get work done on themselves like knee replacements, etc.  They were not only able to take advantage of the good insurance while they still had it, but they were also not there as they were healing up.  Perhaps, this could be an option to use some of the pre-55 time.

I like the way you think...

[soccerluvof4]

I've known people to use time just before retirement to get work done on themselves like knee replacements, etc.  They were not only able to take advantage of the good insurance while they still had it, but they were also not there as they were healing up.  Perhaps, this could be an option to use some of the pre-55 time.

I like the way you think...

Ditto-makes alot of sense!

[rmorris50]

I've known people to use time just before retirement to get work done on themselves like knee replacements, etc.  They were not only able to take advantage of the good insurance while they still had it, but they were also not there as they were healing up.  Perhaps, this could be an option to use some of the pre-55 time.

Unless your spouse keeps working and provides insurance :-P

[Bateaux]

No way would I work a thousand extra days I didn't need to. You could spend 77 days learning how turn your "jumbled mess into a paycheck replacement" and get the hell out of the rat race. Isn't that the whole point? It kinda sounds like you feel trapped, which might just be an illusion of your own making.

I guess I'm grasping for excuses.  August 1st 2020 is the day I became pension eligible.   In 2012 the company robbed most of the pension and extended employee medical insurance coverage to minimum age 55.  Also if you work till 55 then you can get your 401K without the 10 percent penality.  No need for 72T calculations.

When I was at your stage, I was combing through HR policies and benefits looking for any way to shorten my time at work.  It doesn't sound like you're too fed up from work yet, so that's a difference between my situation and yours.

However, you can maybe shave off some of those 1,077 days.

As lhamo pointed out, the no-penalty 401(k) rule is separation from service in the year in which you turn 55.  So depending on when your birthday is, you could retire on January 1st at 54-something and still use that rule.  If you haven't already, it would also behoove you to check your 401(k) plan documents to ensure that they will allow you to access your money on the schedule that works for you.  While federal law says they have to allow penalty-free withdrawals, some plans restrict the timing and amounts of your withdrawals.

You could also use up all your vacation and maybe even do a FMLA or personal leave in the months prior to the January 1st of the year in which you turn 55 to shorten it even more.  I did something like that where I did a personal leave of absence 10 weeks prior to my last juicy stock option vest.  I was still employed so the stock options were still intact.  You could do a similar thing with your 401(k) plan.

While 72(t) plans aren't common, the calculations are literally fifth grade math.  Maybe even fourth grade.  If you don't want to do the 72(t) for other reasons, that would make sense, but doing literally two minutes of calculations once a year doesn't seem like much of a reason.

 I knew that the year you turn 55 is what makes you qualified.  But for my company medical coverage I must work till 55.  My 7 weeks a year of paid time off can make that easier.

[Fomerly known as something]

I’m in the same boat as Bateaux, but with my Federal special category pension with lifetime health insurance, my age is 47.  I have 59 months to go.

 I could FIRE now in theory, but my inner bag lady says no way.  I ran the numbers a few years ago and the difference in pension and benefits is like giving away $1.5. Million.   In reality, I likely won’t do much at work in 2025 so it’s more like 53 months.  I won’t be expected to take on any long term projects because they would just need to be passed onto someone else.  I also could take leave without pay for my last 6 months plus I’ll have unused leave for at least another month that I may or may not take.  (Unused leave gets paid out).  I’m currently working through logistics of a change in scenery to make the life side more interesting for the next few years in order to make the months pass quicker.

[soccerluvof4]

Nibbled me some more to put in cash this morning but still 25% below my yearly set withdrawal. With Nasdaq and S&P hitting new highs and only 25 stocks hitting new highs made sense to sell some VTI now. Goes Higher still have room to take. This market it crazy. End of the shortest Bear ever. A lot of cash still on the sidelines so market could in reality still go a lot higher. Interesting times to say the least.

[Bateaux]

Nibbled me some more to put in cash this morning but still 25% below my yearly set withdrawal. With Nasdaq and S&P hitting new highs and only 25 stocks hitting new highs made sense to sell some VTI now. Goes Higher still have room to take. This market it crazy. End of the shortest Bear ever. A lot of cash still on the sidelines so market could in reality still go a lot higher. Interesting times to say the least.

We still have about a million exposed to this market.   FOMO and greed keeps me in.  This economy will not stand on it's own anytime soon.  It's all about more stimulus (debt).  Who is gling to be the adult and take the punch bowl away?  Will the Biden administration put on big boy pants and focus on debt?  I doubt it.   So this works as long as it works.

[Dancin'Dog]

Nibbled me some more to put in cash this morning but still 25% below my yearly set withdrawal. With Nasdaq and S&P hitting new highs and only 25 stocks hitting new highs made sense to sell some VTI now. Goes Higher still have room to take. This market it crazy. End of the shortest Bear ever. A lot of cash still on the sidelines so market could in reality still go a lot higher. Interesting times to say the least.

After watching how slow VTI has recovered I can't help but reconsider the reasoning for choosing it over something like VUG or QQQ.  It seems like the bigger players have done so much better recently, actually the past 10 years according to portfoliovisulizer.com.

[tooqk4u22]

Nibbled me some more to put in cash this morning but still 25% below my yearly set withdrawal. With Nasdaq and S&P hitting new highs and only 25 stocks hitting new highs made sense to sell some VTI now. Goes Higher still have room to take. This market it crazy. End of the shortest Bear ever. A lot of cash still on the sidelines so market could in reality still go a lot higher. Interesting times to say the least.

We still have about a million exposed to this market.   FOMO and greed keeps me in.  This economy will not stand on it's own anytime soon.  It's all about more stimulus (debt).  Who is gling to be the adult and take the punch bowl away?  Will the Biden administration put on big boy pants and focus on debt?  I doubt it.   So this works as long as it works.

Nobody will be focusing on the debt or deficit any time soon.   Republicans will keep taxes lower or take them even lower and fund more stimulus (money for nothing) and money shall continue to print to the sky.  If democrats take over then they will raise taxes across the board to fund about 30% of their agenda and more stimulus (money for nothing) so the other 70% will also require printing money to the sky. 

As an investor and FIRE person I have mixed feelings about each, on one hand low taxes and stimulus is good for markets so my stash will be ever larger (until its not), on the other the tax proposals from the dems will be bad for markets but if I get lower or even free expanded health care AND college for everyone (I have 3 kids 11-15) AND the tax rates only go up for really wealthy then maybe for me individually I actually do about the same from a WR view point.  Plus all that money I set aside for college is now mine again so maybe I end up with more, haha.

Crystal Ball Dream scenarios
Republicans Win - move all to equities, reps win and lower taxes even more and provides stimulus, markets get to even crazier levels.

Democrats Win - move all to bonds/cash, dems win, taxes go up, markets go down but still crazy levels bc just lost 16% of income to taxes, then buy back in.  Also get free health care and my kids get free college.   That all sounds nice.

Of course, I wouldn't be all stocks or all bonds/cash so I can't participate in the dreams.  But my portfolio is the most conservative its ever been so I am fairly hedged either way I suppose. 

BTW, I fully expect Biden to win and the house will certainly remain democrat but I am not sure (nobody is) about what will happen in the senate.   Personally I would like Biden to win and the senate to stay republican as I think some balance or discourse is good for everyone.   

[tooqk4u22]

Nibbled me some more to put in cash this morning but still 25% below my yearly set withdrawal. With Nasdaq and S&P hitting new highs and only 25 stocks hitting new highs made sense to sell some VTI now. Goes Higher still have room to take. This market it crazy. End of the shortest Bear ever. A lot of cash still on the sidelines so market could in reality still go a lot higher. Interesting times to say the least.

After watching how slow VTI has recovered I can't help but reconsider the reasoning for choosing it over something like VUG or QQQ.  It seems like the bigger players have done so much better recently, actually the past 10 years according to portfoliovisulizer.com.

Hindsight is a bitch, but really its all about a handful of companies driving it, all of which are in VTI too and most are in SP 500 - really those handful of companies are 25% of SP 500

[Dicey]

No way would I work a thousand extra days I didn't need to. You could spend 77 days learning how turn your "jumbled mess into a paycheck replacement" and get the hell out of the rat race. Isn't that the whole point? It kinda sounds like you feel trapped, which might just be an illusion of your own making.

I guess I'm grasping for excuses.  August 1st 2020 is the day I became pension eligible.   In 2012 the company robbed most of the pension and extended employee medical insurance coverage to minimum age 55.  Also if you work till 55 then you can get your 401K without the 10 percent penality.  No need for 72T calculations.

When I was at your stage, I was combing through HR policies and benefits looking for any way to shorten my time at work.  It doesn't sound like you're too fed up from work yet, so that's a difference between my situation and yours.

However, you can maybe shave off some of those 1,077 days.

As lhamo pointed out, the no-penalty 401(k) rule is separation from service in the year in which you turn 55.  So depending on when your birthday is, you could retire on January 1st at 54-something and still use that rule.  If you haven't already, it would also behoove you to check your 401(k) plan documents to ensure that they will allow you to access your money on the schedule that works for you.  While federal law says they have to allow penalty-free withdrawals, some plans restrict the timing and amounts of your withdrawals.

You could also use up all your vacation and maybe even do a FMLA or personal leave in the months prior to the January 1st of the year in which you turn 55 to shorten it even more.  I did something like that where I did a personal leave of absence 10 weeks prior to my last juicy stock option vest.  I was still employed so the stock options were still intact.  You could do a similar thing with your 401(k) plan.

While 72(t) plans aren't common, the calculations are literally fifth grade math.  Maybe even fourth grade.  If you don't want to do the 72(t) for other reasons, that would make sense, but doing literally two minutes of calculations once a year doesn't seem like much of a reason.

 I knew that the year you turn 55 is what makes you qualified.  But for my company medical coverage I must work till 55.  My 7 weeks a year of paid time off can make that easier.

Hey @Bateaux, all of my comments were based solely on the fact that you clearly have a big-ass 'stache. This pension/benefits situation sheds a whole new light on things. I totally understand the importance of healthcare and the unwillingness to walk away from something you've worked so long to earn, i.e. the pension. My husband's in the same boat. I'm going to change my response from now on and I solemnly swear to stop nagging you about retiring. I encourage you to do everything in your power to make the next 1000+ days as carefree as possible.

Tl:Dr - No more RE shit from Dicey. I get it.