Making hay while the sun shines

[JoJo]

I've heard this phrase a couple times lately.

If you made really good money (think the ability to put away about $140K per year, after taxes and expenses), ample paid time off (6 weeks for sick & vacation) would you stay with the status quo and "make hay while the sun shines" even though you don't love your life? 

While I have a good amount saved (around $1.2M at age 40), working a few more years would certainly put me in a much more comfortable ER position, and able to enjoy more luxuries later.

[CarDude]

Only you can answer that. It completely depends on where your "enough" is. By the 4% rule, 1.2M is 48k a year, which is about what the average entire *family* makes in the US. If I were in your shoes, I'd have retired yesterday.

[JoJo]

To answer the questions - I live fairly mustachian - spend about $21,500 per year but that includes property taxes, insurance, hoa, etc.  My biggest spend/luxury is traveling which is about $8,000 of that - visiting family and pleasure trips.   The problem is I like to go to exotic places and it costs a lot to fly there but then I travel very frugally otherwise.

[dragoncar]

I would do it until I didn't want to do it any more.  You are FI enough that if you don't like what you are doing, you can take risks to make it more enjoyable (ask for half-time, or whatever floats your boat).

[Gray Matter]

Yeah, that's a hard one.  I would probably work two more years, but your expenses are so low, I'm not sure it's worth it.  But if you just "don't love" your life and opposed to "hate" your life, I'd still probably stick it out, even with your expenses, for that extra cushion.  I'm in a similar situation (except my expenses are way higher and my savings way lower, so really not all that similar), but I have chosen to first go part-time at my current job to see if that is increasing my overall life satisfaction.  It helps, but it still doesn't feel like enough, so now I am contemplating (and applied for!) a job that (I hope) will be more intrinsically rewarding, but pays less. 

For me, the ultimate goal is not to stop working as soon as possible, but to get to the point where I do the kind of work I want, for as much as I want, in order to cover expenses while my savings grows untouched until such time as I no longer want to work at all.  It's a nice stepped-down (up?) approach to retirement.

[JoJo]

My ultimate goal is to live outside the country for awhile.  Maybe teach, peace corps, tour guide for some time.  I just have fear that if I get out there and don't like that it might be harder to come back to my current career in my mid-40s.  Also, my parents are getting up in age and health and I worry about being out of the country if they need me.

I did take a 20 month sabbatical at age 31 and loved it - probably the happiest time of my life.  But it was super easy to come back and find a job at that age.  I'm the first to admit that my technical skills are starting to become stale so finding a job with the great PTO & salary might be tough later.

[Jon_Snow]

This thread is a great idea.

This is something that I'm constantly struggling with. My wife and I are increasing our net worth at an epic pace right now - probably close to the 140k annually the OP mentioned. If I could muster the will to work another two years we would obviously be in a much stronger position before I quit my job.

But I don't think I can make it. In the last 5 years I've almost been killed on the job twice. Enough.

[GoldenStache]

Bird in the hand is worth two in the bush..

I would stay with it for a few more years.. Make sure that you have plenty so you will not have to ever worry about it for the rest of your life.  I would enjoy my fun time more if I did not have the fear that I quit a bit too soon and might be screwed. 

[frugalmom]

I would continue to work.

The cost of healthcare is something you can not predict.  One high dollar lingering illness could put a serious dent in your cushion.  I'm not saying you stay forever, but 2-3 more years could really help the bottom line.

Also my husband and I are looking at a more conservative draw down rate of 2% to allow for as many options as possible.  Since your only 40 your 25 years from getting a social security boost.  We are nearly the same age, and we want our pot to be bigger. YMMV

[mxt0133]

With your current expenses and assets you are already FI.  The only thing that could mess up your plans is if you plan to live in a really expensive place compared to where you are now.  I think your pretty much at the one more year syndrome.  I would recommend either setting an actual target, where you crunch the numbers on how much you will realistically spend, how much you think can earn on your current assets and then have a back-up plan if it doesn't work out.  That might ease your mind a bit instead of just relying on the magical 4% withdrawal rate.

Also I think if you had something to retire too, that you desperately wanted to do this would be a much easier decision.  So take a sabbatical and figure it out or work as a contractor and work for half the year until you finally figure it out.  I think you are giving yourself false options. That if you "don't like it out there" it will be hard to come back to your current career.  You won't really know until you try and why do you have to go back to your current career?  Why don't you apply for another job and see if you can match your current pay and PTO.  I do that every year to make sure my skills are marketable and to find out if my current pay is at market value.  It might not be as hard to get back into your current career as you think.  Either way you are in a really good position right now and i'll leave you with this http://zenpencils.com/wp-content/uploads/road-not-taken.jpg.

[RealCanadianSavings]

But I don't think I can make it. In the last 5 years I've almost been killed on the job twice. Enough.

Are you commuting from the gulf islands to the oil patch? Because you couldn't possibly pay me enough to work at a job that seriously endangered My LIFE. I'd quit tomorrow and find work in Victoria that's much more friendly.

[MrsPete]

It totally depends on your spending needs and how much you enjoy luxuries.  You don't tell us how much you spend.

Or how much you enjoy security.  If you set a date -- maybe two years from now -- you'd have the emotional plus of knowing you have a definite end date AND you'd walk away with a good buffer against inflation.

[NeverWasACornflakeGirl]

There are so many variables... but at this point you can really do whatever your gut tells you.  If you're not happy, do something else!  You have more than enough money.  And sometimes the possibilities surprise you when you are open to something new. 

Just an example:  this week on Tuesday I announced that I was retiring as of June 2.  I mean "retiring" in the mustachian sense (taking on part time work when the mood strikes or I want some extra funds).  I put it on Facebook and within a couple of hours a consultant I had worked with four years ago started asking me would I want some part-time, work at home, in my field work.  I could work as many or as few hours as I wanted, it would be flexible, I could do occasional travel if I wanted (since it's to Jamaica and Trinidad, I might actually want to), and the pay is outstanding.  I'm not counting on it, even though it looks like it's going to happen, but it made me see that there are lots of possibilities out there is you're willing to be open to them.
Good luck, whatever you decide!

[Thegoblinchief]

Considering your core expenses and even a large travel budget and health insurance, you could easily make 1.2M fit a 3% SWR, which is quite safe.

I'd pull the plug to PT work and transition from there.

Do less exotic travel in the first few years. That way you will be reachable when your parents may need you, and you won't have to touch as much principal early on - avoiding sequential negative return risk.

[smalllife]

Why are you staying somewhere that you don't like when you have the means to not have to put up with it?  Transition to part time, reduce responsibilities, etc. etc.  What is it giving you that is worth more than your freedom?  Personally I would have retired yesterday with that nest egg.

[hobbes1]

I'd stick it out a couple more years if I could. Maybe part time if that were an option, as has been suggested....then bail out completely and find some other interesting ways to spend the rest of my life :)

[JoJo]

My employer provides the health insurance now so that would be a new expense.  I figure my annual expenses would rise to $30,000 a year once I become a nomad - and that would be sticking to inexpensive countries - Central and South America, South Asia, Eastern Europe and Caucasus.

Does anyone know how the ACA works for someone who only spends a fraction of their year in America?  After ER, I will likely only spend 1-2 months in the US per year.  Any links would be useful.  Thanks.

[JohnGalt]

$30,000 / year spending with $1.2 million in assets... sounds like you already have a pretty good margin built in.  If you don't love your job, I don't see any reason to stay at it. 

Just putting those numbers into firesim - the worst case scenario after 30 years still ended up with over $900,000 in inflation adjusted portfolio value.  The lowest inflation adjusted value it reached in any scenario was just under $450,000.  Those are the absolute worst scenarios that occurred over any given 30 year periods starting between 1870 1983. 

50% of the time, you would have ended up with just over $3 million after 30 years. 

If that $30,000 spending is realistic to let you do what you want to do - there is absolutely no reason for you to keep working unless you like it.

[RetiredAt63]

Wouldn't it depend on which country and which America? i.e. South, Central or North?  Apart from those 1-2 months in the U.S., that is.

Does anyone know how the ACA works for someone who only spends a fraction of their year in America?  After ER, I will likely only spend 1-2 months in the US per year.  Any links would be useful.  Thanks.

[Mr. Frugalwoods]

In many ways, this is the question for a lot of folks around here.

On the one hand, life can be short and unpredictable and there's always a chance we won't make our actuarially predicted lifespan.  I'd hate to look back and know I had a couple of good years of health but wasted it on an extra safety margin.

On the other hand, sh#t happens.  Major expenses can crop up and won't necessarily happen at advantageous times to liquidate assets.  Think of any retiree who needed a new roof in spring of 2009 and sold stock to fund it.  Some people on this board are content to cut it real close when it comes to needed withdrawal rates.  Others are less inclined to throw the dice.

For me, since I expect to have several income producing ventures in FIRE, I'm not so super worried about cutting it close on SWR at the moment I retire.

[JoJo]

Wouldn't it depend on which country and which America? i.e. South, Central or North?  Apart from those 1-2 months in the U.S., that is.

Does anyone know how the ACA works for someone who only spends a fraction of their year in America?  After ER, I will likely only spend 1-2 months in the US per year.  Any links would be useful.  Thanks.

The plan is nomadic for awhile - maybe I'll spend 9 months making my way thru central America (most countries you can stay up to 90 days up to 6 months) - settle in some places for awhile.  If I really like a place maybe stay longer.  At minimum I'd need travel insurance for emergencies, but that wouldn't cover cancer, etc.  Would I be forced to buy insurance in the USA, or pay the obamacare tax, even though only spending a little time there (but no permanent address in another country either). 

[JoJo]

Wow.  I just saw this posting I made almost 1.5 years ago.

Lots has happened since then.  My job changed in January.  It's more pay, more stress, more interesting work, more responsibility.  I'm getting great respect & reputation from the execs.  I've lost about 50 pounds & generally happier.  Net worth is over 1.5M.  I'm getting travel perks from the job change (FF miles & hotel points).  Have most of my vacation & holidays left for this year so will be off almost 50% from now to the end of the year which is the best thing ever!

So now the "making hay" is even stronger than ever and making me stay longer - not sure if that makes me happy or sad.

I'm still curious what nomads are doing for health insurance.  I don't want to have to double up on ACA + travel medical if I don't have to.

[Gerard]

My grandfather was a hay farmer (among other things). It's pointless to make more hay than your cows will need, or than you can fit in your barn or share/sell. More time spent haying takes time away from other useful activities, and increases your chances of getting hurt by the machinery, especially if you're over-tired. So hay like crazy when the sun shines, get everybody to pitch in, and stop when you're done.

There's a literal answer for you. I leave it to the readers to turn it into metaphors. :-)