Author Topic: Progress and "Lessons Learned" on Pending FIRE  (Read 34143 times)

DoubleDown

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Progress and "Lessons Learned" on Pending FIRE
« on: July 24, 2013, 09:24:42 AM »
I'm getting ready to retire in about 3 months when I will have just turned 47. I thought I'd create this thread as a place to post updates, keep track of progress, note anything I learn along the way, and invite feedback or suggestions. MODERATORS -- if you feel this would more appropriately belong in the Journals section, please feel free to move it. I put it here for now because I want it to be more of a feedback and tips post than a "my personal journey" kind of story.

Background: Age = 46, divorced 7 years ago with 2 kids, now remarried with a stepdaughter (3 kids total, 2 in grade school and 1 in junior high). I have shared custody of my kids and pay child support. The divorce set back my net worth by at least $700k at the time, plus ongoing child support and other costs.

Finances: Live in a high cost of living area, earn over $150k, wife earns about $55k. Been at my current employer for 17 years. At age 60 I will get a small-ish, highly guaranteed pension that will be split with my ex. My share will equal about $17,000 annually in today's dollars, indexed for inflation. Social security is currently estimated at $25,000 annually at age 67. Don't know wife's SS, probably about $15,000 annually. So, old age fixed income (barring changes to SS) should be ~$57,000.

Otherwise, we've got $650k in 401k's, $190k in taxable accounts, $170k in home equity, and $120k equity in a non-cash flowing rental house that I expect to sell next summer. If you add it all up it's somewhere around $1.1mm.

Expenses: $6150/month, of which $3200 is housing (PITI + Utilities + Maintenance). I'd love to move to a lower cost area with a paid off house, but that's a different topic

What I've done so far: This week I had a conversation with my boss and HR about taking a year-long sabbatical, but really will be just a quiet exit. It keeps my health insurance and life insurance in place, and gives me a guaranteed position for one year if I wanted to return (I don't foresee that). It's a nice safety net as I see it.

The usual challenges I foresee:
- Making the "young man" money last long enough until the old man money is accessible
- Relying on market returns to be high enough such that the old man money is what I forecast it to be when I'm older
- Health insurance
- Walking away from a lucrative career, finding the "enough" point (I feel like I've hit it)

Other: My wife is not a spendthrift at all, but she's definitely in the "why would you want to retire this early?" camp. I do have a great, high earning job with awesome benefits, so she sees leaving early as pretty dumb and throwing away a great opportunity. She's also generally pessimistic and prone to all the typical naysaying you'd see in MMM comments (What about insurance?! We'll go broke! What would you do all day, you'll become lazy!). So that will be a challenge, I wish she was more on board with this kind of major life goal. She intends to keep working, which keeps us in a high cost of living area, but also provides income to cover the housing costs.

I'll post updates along the way, but please feel free to offer suggestions or poke holes in my planning.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #1 on: July 24, 2013, 09:36:39 AM »
So my first lesson learned: As already mentioned 1,000 times on this site, don't get divorced! It's very expensive, and can keep you paying many years in child support and until your death in alimony. But if you do get divorced, take heart: You CAN recover and still retire early. I'm grateful I was able to rebuild and can still retire relatively early at the respectable age of 46/47.

My divorce also coincided with the market/housing crash, so it was a double whammy. After paying alimony and child support, I literally had $100/month left in my paycheck to feed, clothe, and house me and my kids. That's not an exaggeration -- I was left $100 per month for everything, while having to pay my ex thousands.

Thank God I had saved. I could have gone into my assets, but because the markets crashed at the same time, I chose to live on credit rather than sell at large losses, knowing I had the assets to back up the borrowing if push came to shove. In retrospect it was the right call. I lived frugally, and the markets recovered so that I have now rebuilt and can retire early.

On a related note, any high earner living with a "stay at home" spouse better understand what they're getting themselves into from the legal standpoint. You are at a huge disadvantage when it comes to custody, alimony, and child support decisions if you end up divorcing, whether you initiate the divorce or your spouse does.

SwordGuy

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #2 on: July 24, 2013, 09:42:45 AM »
I suggest you pretend, from a financial point of view, that you've retired - but keep working for another year or so.

Put 100% of your takehome pay on the house to pay it off (or at least, way, way down).  Your cost of living will drop dramatically once that mortgage is paid off - which reduces the risk of you running out of money too fast.

Plus, you get to find out whether you really can spend at the level you think you can - before you have to.  :)


MissStache

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #3 on: July 24, 2013, 09:43:29 AM »
I am in a similar financial situation as your wife- where my SO is the major breadwinner and my salary alone (while quite respectable) would NEVER allow us to live our currenty lifestyle in a high COL area. 

Luckily, we are mustacian- me especially- and are able to live well below our means.

But I will say this, if I wasn't mustacian and my SO up and quit the job that was allowing us to live like we do, I would be SEETHING with anger and resentment about it.   Is HER lifestyle going to have to change when you retire?  If so, you better get her on board before you do this. 

If nothing is going to change for her except having hubby home more often, then more power to you!

TrulyStashin

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #4 on: July 24, 2013, 09:46:25 AM »
How deeply in debt were you post-divorce/ crash?   

I ask because I'm just a few years younger than you (44) and a recent law school graduate staring down massive student loan debt.  I've adopted some pretty hardcore mustachian ways over the last three months (found MMM in May) and by September should be able to live on less than 40% of my take home pay with 60%+ going to debt. 

Sometimes it feels incredibly overwhelming, like I'll never make progress and be free.  But, if you were deeply in debt just a few years ago, it would give me hope.

So . . . how deep was the hole?

aaronpct

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #5 on: July 24, 2013, 10:16:40 AM »
So my first lesson learned: As already mentioned 1,000 times on this site, don't get divorced! It's very expensive, and can keep you paying many years in child support and until your death in alimony. But if you do get divorced, take heart: You CAN recover and still retire early. I'm grateful I was able to rebuild and can still retire relatively early at the respectable age of 46/47.

My divorce also coincided with the market/housing crash, so it was a double whammy. After paying alimony and child support, I literally had $100/month left in my paycheck to feed, clothe, and house me and my kids. That's not an exaggeration -- I was left $100 per month for everything, while having to pay my ex thousands.

Thank God I had saved. I could have gone into my assets, but because the markets crashed at the same time, I chose to live on credit rather than sell at large losses, knowing I had the assets to back up the borrowing if push came to shove. In retrospect it was the right call. I lived frugally, and the markets recovered so that I have now rebuilt and can retire early.

On a related note, any high earner living with a "stay at home" spouse better understand what they're getting themselves into from the legal standpoint. You are at a huge disadvantage when it comes to custody, alimony, and child support decisions if you end up divorcing, whether you initiate the divorce or your spouse does.

Some people dont have the option NOT to get divorced.  Now-a-days lots of marriages (surprisingly even ones with kids) have a very cavalier dating attitude towards making them last.  Once one person is dead set on it, there is nothing the other day do...even if it means financial ruin.  I personally went through a divorce and had to start over from ZERO 2 years ago.  I've since made a rip roaring comeback and i've never been happier. 

The whole divorce system is archaic as they come, where the only winners are the attorney's.  It's amazing how breaks in the relationship can cause someone whom would never be nasty to someone whom feels entitled to everything in the world. 

Fortunately I have found love again and will marry again, but I will take precautions that will not give the courts power over me again in that regard...should it ever happen again.  (Hopefully not!)

/end rant

jrhampt

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #6 on: July 24, 2013, 10:36:04 AM »
I am in a similar financial situation as your wife- where my SO is the major breadwinner and my salary alone (while quite respectable) would NEVER allow us to live our currenty lifestyle in a high COL area. 

Luckily, we are mustacian- me especially- and are able to live well below our means.

But I will say this, if I wasn't mustacian and my SO up and quit the job that was allowing us to live like we do, I would be SEETHING with anger and resentment about it.   Is HER lifestyle going to have to change when you retire?  If so, you better get her on board before you do this. 


Not sure I understand this.  Why would you feel entitled to that standard of living as the lower earner?  Having him work longer, even though he's earned the majority of the income over the past several years?  Seems like if lower earners wanted to maintain that higher standard of living, they should find a way to earn more themselves.  After all, it's not really fair that the lower earner had been mooching off the higher earner and enjoying what some could argue was an undeserved, inflated standard of living for many years.

MissStache

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #7 on: July 24, 2013, 10:57:38 AM »
I am in a similar financial situation as your wife- where my SO is the major breadwinner and my salary alone (while quite respectable) would NEVER allow us to live our currenty lifestyle in a high COL area. 

Luckily, we are mustacian- me especially- and are able to live well below our means.

But I will say this, if I wasn't mustacian and my SO up and quit the job that was allowing us to live like we do, I would be SEETHING with anger and resentment about it.   Is HER lifestyle going to have to change when you retire?  If so, you better get her on board before you do this. 


Not sure I understand this.  Why would you feel entitled to that standard of living as the lower earner?  Having him work longer, even though he's earned the majority of the income over the past several years?  Seems like if lower earners wanted to maintain that higher standard of living, they should find a way to earn more themselves.  After all, it's not really fair that the lower earner had been mooching off the higher earner and enjoying what some could argue was an undeserved, inflated standard of living for many years.

I'm not and never have been married, but it seems to me that the vast majority of marriages tend to treat finances as a whole and the amount put in by one partner or the other doesn't seem to matter much.  Most marriages merge finances- for better or worse.  I would think she would feel entitled to the standard of living because it is what she is used to.  Having that yanked out from under you because your husband was making a big decision that you didn't undertand and thought was "pretty dumb" would be jarring. 

We don't do that in my household- we each have and keep our own money and contribute the same percentage of our finances to joint expenses- but we are a mustacian household and I've always valued financial independence. 

I was just trying to put myself in the shoes of the wife who doesn't seem to get why he is doing this and doesn't seem to understand the philosophy of living this life.  Seems to me like it has the potential to cause friction.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #8 on: July 24, 2013, 01:33:29 PM »
I suggest you pretend, from a financial point of view, that you've retired - but keep working for another year or so.

Put 100% of your takehome pay on the house to pay it off (or at least, way, way down).  Your cost of living will drop dramatically once that mortgage is paid off - which reduces the risk of you running out of money too fast.


Thanks for the suggestion. Actually, I have been doing exactly that for the past year or so. I'd say I hit FI 1-2 years ago, and have been working since then just to build up that extra safety margin. So, I hope you'll give me a pass on another year! Unfortunately paying off the mortgage (or even coming close) where we currently live is not feasible in anything less than a decade or more (home value of about $650k with $440k owed). But once kids are out of school and we're comfortable with packing up and moving to a lower cost of living area, then I definitely expect to buy a home that costs around $150 - 200k.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #9 on: July 24, 2013, 01:45:59 PM »

I was just trying to put myself in the shoes of the wife who doesn't seem to get why he is doing this and doesn't seem to understand the philosophy of living this life.  Seems to me like it has the potential to cause friction.

I think you and jrhampt are both right and both make good points. There is definitely the potential for friction, and there is also room for debate over how to align different goals from each partner or what kind of expectations come built in for a higher earner. Fortunately I don't anticipate any significant change in the standard of living for both of us. I've hopefully planned this well enough where we can sustain our existing lifestyle.

I do already feel the friction in not having my spouse on board with this life goal, so I have to work with her on how to find a win-win solution or compromise for us both. I think we've reached a decent compromise so far, though I wonder if there's potential for unseen trouble down the road. I mean, from her perspective, she'd be thrilled if I just kept bringing home that big paycheck forever, adding to the stash and having lots of $ left over for frivolous purchases if she wanted. But I'm counting down the days until I can walk.

The general compromise is that I will retire, she wants to continue to work. Her take home pay will cover the housing costs where we live so that we can stay (I would be happy with both of us retiring and moving to a lower cost area where our savings would sustain us indefinitely). But I'm fine with staying if she doesn't mind working -- makes it easy for me. Another potential point for friction I see is she "jokingly" makes lots of comments about all the house work and cooking and cleaning I can do now that I'll be retired, where I definitely don't plan on trading in my full time day job for a full time house husband job! What do you think of this compromise/arrangement?

oldtoyota

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #10 on: July 24, 2013, 01:59:06 PM »
My divorce also coincided with the market/housing crash, so it was a double whammy. After paying alimony and child support, I literally had $100/month left in my paycheck to feed, clothe, and house me and my kids. That's not an exaggeration -- I was left $100 per month for everything, while having to pay my ex thousands.


I find it disturbing that a court would only leave you that much to live on. My neighbor (the wife) has to pay alimony to her ex while he lives with the gf he cheated on the wife with.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #11 on: July 24, 2013, 02:01:55 PM »
How deeply in debt were you post-divorce/ crash?   

I ask because I'm just a few years younger than you (44) and a recent law school graduate staring down massive student loan debt.  I've adopted some pretty hardcore mustachian ways over the last three months (found MMM in May) and by September should be able to live on less than 40% of my take home pay with 60%+ going to debt. 

Sometimes it feels incredibly overwhelming, like I'll never make progress and be free.  But, if you were deeply in debt just a few years ago, it would give me hope.

So . . . how deep was the hole?

Definitely don't give up hope! If you stay at it, you will see rapid progress. And it just gets faster over time, compounding interest truly is amazing.

I'd say in total I accrued about $40,000 in debt to cover my living expenses over three years. Things got progressively easier for me over the years as my support payments to my ex were gradually reduced. So I borrowed heavily at first, then less later on. Once support payments went down to where I had a positive cash flow again, I repaid debt like crazy. I'm fortunate, I had good credit and high income, so I could borrow money cheaply, and when the markets recovered my assets grew again nicely.

But if I had not had prior savings (well, the remaining half of my net worth) to back up that borrowing, it would have been a much more stressful and difficult time. The "spend significantly less than you earn" mantra works every time.

MissStache

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #12 on: July 24, 2013, 02:02:14 PM »
Another potential point for friction I see is she "jokingly" makes lots of comments about all the house work and cooking and cleaning I can do now that I'll be retired, where I definitely don't plan on trading in my full time day job for a full time house husband job! What do you think of this compromise/arrangement?

LOL!  Well, I ALMOST put in my first post that she would probably be happy that you were home and taking on a large portion of the housework, so I guess those would be expectations that you should probably chat about, too :)  I would say that generally when people are frequently "joking" about something like that, they may be smiling, but they certainly aren't kidding!

I'm all for both partners contributing to the daily chores around the house, but if I was the one retiring, I would fully expect to take on the lion's share of those duties- and I know my SO would do the same.   

I don't know.  It sounds like you are in a good place financially, but it seems like you've got a lot of stuff to iron out with regards to your wife's opinion.  That's assuming that you want/need her to be on board with this, of course.

For what it is worth, if I were in your position, I'd be doing the exact same thing.  Maybe with more cooking :)

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #13 on: July 24, 2013, 02:03:24 PM »
<snip>


You said it man! You are preaching to the choir, I could not have said it better.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #14 on: July 24, 2013, 02:08:05 PM »

I'm all for both partners contributing to the daily chores around the house, but if I was the one retiring, I would fully expect to take on the lion's share of those duties- and I know my SO would do the same.   


Oh yeah, I should have said I definitely intend to pick up more of the house work and chores, I've told her that, and I told her she could expect some nice home cooked meals awaiting her when she returns from work. I just don't want there to be a built-in expectation that I'd do all the work, trading my day job for full time house husband duties. Otherwise, I might as well continue to go to work at an office all day where they pay me $160k and hire a maid! I think I've made that clear to her now ;-)

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #15 on: July 24, 2013, 02:16:41 PM »
My divorce also coincided with the market/housing crash, so it was a double whammy. After paying alimony and child support, I literally had $100/month left in my paycheck to feed, clothe, and house me and my kids. That's not an exaggeration -- I was left $100 per month for everything, while having to pay my ex thousands.


I find it disturbing that a court would only leave you that much to live on. My neighbor (the wife) has to pay alimony to her ex while he lives with the gf he cheated on the wife with.

It is disturbing. Anyone expecting to find justice at a court better think again.

As I mentioned, I discovered I had put myself at a serious disadvantage by being the sole high earner, with my ex staying at home to raise kids (per her choice, which I was fine with). Doing that creates a significant built-in advantage for the stay at home mom, and it didn't take my (then bitter) ex long to figure that out with the help of her attorney. She used that advantage to demand full custody of my kids, extracting payment in return for an agreement on shared custody. It was worth it to me to fork over the $ to keep the kids in my life.

As far as the courts are concerned, whatever standard of living and childcare arrangements that were in place prior to the split will generally be continued post-divorce. So, stay at home mom will continue to be stay at home mom with primary care of the kids and keeping the house, and going-to-work-dad will continue to go to work and send payments to stay-at-home-mom while finding somewhere else to live. Unfortunately it gave my ex no incentive whatsoever to find employment, not as long as I was footing the bill. Miraculously she got a job the very day alimony expired.

Coneal

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #16 on: July 24, 2013, 05:50:40 PM »
Out of curosity how long does alimony last?  If you had it to do all over again how would you protect yourself from divorce before you were married?  I hear a pre nup does not always hold up.

TrulyStashin

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #17 on: July 25, 2013, 07:48:45 AM »
Alimony is very case-specific so it will vary depending on the facts of a particular situation.  Nowadays, it is typically a short-term provision to allow one party to go back to school or get training or otherwise get on his/ her feet after being out of the job market.   I have a friend who had alimony through law school (she had been a SAHM) but upon graduation, it ended.  That's pretty typical.   Of course, parties are free to contract for whatever they want and often in an emotional and stressful situation like divorce one party will sign a settlement agreement that is really unfair, and sadly, they're usually stuck with that.

A pre-nup will hold up if it is negotiated well ahead of time without any last-minute pressure and with each party having its own lawyer (in law, we call that "arms-length" dealing) so that each party is protected and there is no duress.   If a pre-nup includes a severance clause, then even if one paragraph is stricken for some reason, the remainder of it will be valid and enforced.

If I get married again, I'll have a pre-nup, without doubt.

eyePod

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #18 on: July 25, 2013, 10:09:54 AM »
This is great.  I appreciate your insight and comments.  I'm married now and never plan on getting divorced (I'm sure you didn't either), but seeing how this all plays out will definitely be interesting!  I'm sure you can do it, and I'm also betting you'll pick up some other side hustle to keep you busy but also bring in some cash.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #19 on: July 25, 2013, 03:33:49 PM »
Out of curosity how long does alimony last?  If you had it to do all over again how would you protect yourself from divorce before you were married?  I hear a pre nup does not always hold up.

Hey there -- I have since remarried, and did get a prenup with my new wife. As TrulyStashin pointed out, we each had attorneys representing us and had lots of lead time to get everything reviewed. It might not be 100% bullet proof (nothing ever is), but it's likely very close. They're rarely ignored by a court if everything is done properly. Also as TrulyStashin pointed out, alimony is very much dependent on the circumstances, at least in my state (Virginia). Here in Virginia, it generally lasts no longer than half the length of the marriage, but once you've crossed a certain threshold (20 years IIRC) it will generally be ordered for life (yours or theirs, whichever ends first).

The other thing I would do is not set up a huge income or wealth disparity, at least not without knowing what you're getting into. No matter what kind of agreement you and your spouse reach, it's important to understand that courts are not likely to leave one spouse destitute while the other walks away with tons of money and income. So that's another potential way parts of a prenup could be tossed, and probably rightly so.

Hamster

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #20 on: July 25, 2013, 05:08:40 PM »
I'm getting ready to retire in about 3 months when I will have just turned 47...

At age 60 I will get a small-ish, highly guaranteed pension that will be split with my ex. My share will equal about $17,000 annually in today's dollars, indexed for inflation. Social security is currently estimated at $25,000 annually at age 67. Don't know wife's SS, probably about $15,000 annually. So, old age fixed income (barring changes to SS) should be ~$57,000...

Otherwise, we've got $650k in 401k's, $190k in taxable accounts, $170k in home equity, and $120k equity in a non-cash flowing rental house that I expect to sell next summer. If you add it all up it's somewhere around $1.1mm...

Expenses: $6150/month, of which $3200 is housing (PITI + Utilities + Maintenance). I'd love to move to a lower cost area with a paid off house, but that's a different topic...
I don't want to sound like a naysayer/complainypants, as I think what your planning is completely doable if you reduce expenses. But, I'm curious how you plan to make it work if your wife isn't interested in moving to lower COL area. Will you be able to pull out the equity in your primary residence? If not, I wouldn't include it in your retirement stache.

I inferred (maybe incorrectly) that your wife would cover the housing costs with her after-tax income and you'd cover the rest of expenses with your savings? With most of your savings in 401k and home equity, what is your strategy to cover "your portion" - about $36,000 in non-housing expenses from age 47 until pension kicks in at age 60, and then $19,000 (after pension) between age 60 and 67? Will your wife work that whole time? Or are you planning on a fairly high withdrawal rate initially, and if so, what is your mechanism for accessing your 401k money early?

Also, it may be worth revisiting the SS assumptions. Maybe I calculated wrong, but based on the SS retirement online calculator, even if you'd earned $150,000 every year from 1996 to 2013, then earned nothing after that, you'd get $~22k annually (today's dollars) at 67 years. There is a better, downloadable calculator, but I can't install it on my work computer.

Christof

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #21 on: July 26, 2013, 04:01:02 AM »
As far as the courts are concerned, whatever standard of living and childcare arrangements that were in place prior to the split will generally be continued post-divorce.

In Germany this has changed fives years ago. The rule now is that payments compensate any disadvantages  due to the marriage. The court attempts to determine what the partner could have made in income without a marriage and what they could possibly make today after the marriage ended. The difference needs to be paid by the partner up to a certain amount.

rubybeth

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #22 on: July 26, 2013, 11:55:28 AM »
Also, it may be worth revisiting the SS assumptions. Maybe I calculated wrong, but based on the SS retirement online calculator, even if you'd earned $150,000 every year from 1996 to 2013, then earned nothing after that, you'd get $~22k annually (today's dollars) at 67 years. There is a better, downloadable calculator, but I can't install it on my work computer.

That assumes the only job he's ever had is the one he's held for the last 17 years. His calculation probably includes all of his other working years (assuming he started work at age 18 or 22 or something) prior to 1996, so he'd have earned a benefit for those years, as well.

DoubleDown: I think you need to discuss all of this with your wife. Especially the cost of living where you are in order for her to keep working. If it costs $50k/year to live where you do, and she earns $50k a year, her income is kind of canceled out. It's just like women who find that it will cost more to put their child in day care than they earn--what's the point of working? You could move to a lower COL area and she could find a new job, maybe part-time or start a business doing something she loves so she could enjoy being 'retired' as well.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #23 on: July 26, 2013, 01:09:29 PM »

I don't want to sound like a naysayer/complainypants, as I think what your planning is completely doable if you reduce expenses. But, I'm curious how you plan to make it work if your wife isn't interested in moving to lower COL area. Will you be able to pull out the equity in your primary residence? If not, I wouldn't include it in your retirement stache.

I inferred (maybe incorrectly) that your wife would cover the housing costs with her after-tax income and you'd cover the rest of expenses with your savings? With most of your savings in 401k and home equity, what is your strategy to cover "your portion" - about $36,000 in non-housing expenses from age 47 until pension kicks in at age 60, and then $19,000 (after pension) between age 60 and 67? Will your wife work that whole time? Or are you planning on a fairly high withdrawal rate initially, and if so, what is your mechanism for accessing your 401k money early?


Yes, thank you for pointing out the potential pitfall! I really did gloss over the plans in my OP, as they turned out to be somewhat complicated on what categories of savings I'd be going into at various times. But it probably deserves some explaining.

In effect, I'll be spending the taxable savings down to $0 for approximately 9-10 years. As you correctly deduced, that withdrawal rate covers all the non-housing expenses for us (housing covered by my wife's take-home pay). Then I'll start on 401k 72(t) withdrawals/etc. until my pension kicks in at 60, then I'll take 401k + pension + SS at age 67, etc, then wife's SS. I have estimated that if I don't touch the 401k for 9 years, then at 5% average return it should grow to about $1.1 Million at age 56, which makes me comfortable. Once we're old and drawing on all the sources, then the annual income (at 4% SWR on the 401k's) totals up to $110k annually (in 2013 dollars), which seems obscene. So we'd probably have a much lower SWR.

Also, home equity in our primary residence would be building up while we're remaining in the high cost area, which will add an additional big safety net (could easily hit $400 - 500k equity in 9 years). So once kids are grown up and we can move from this area, we'd easily be able to pay off a smaller house and have plenty left over.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #24 on: July 26, 2013, 01:11:20 PM »

That assumes the only job he's ever had is the one he's held for the last 17 years. His calculation probably includes all of his other working years (assuming he started work at age 18 or 22 or something) prior to 1996, so he'd have earned a benefit for those years, as well.

DoubleDown: I think you need to discuss all of this with your wife. Especially the cost of living where you are in order for her to keep working. If it costs $50k/year to live where you do, and she earns $50k a year, her income is kind of canceled out. It's just like women who find that it will cost more to put their child in day care than they earn--what's the point of working? You could move to a lower COL area and she could find a new job, maybe part-time or start a business doing something she loves so she could enjoy being 'retired' as well.

You are correct, I did have earnings prior to my current job. I started full time professional work 23 years ago. I used the detailed calculator on the SSA's website, putting in "0's" for all the years between now and the withdrawal date, and used that figure (knowing full well it may be revised downward if there are changes made by Congress).

And boy, did you nail the issue on my wife effectively working just so she can hand over her paycheck to live in a place so she can go to that work. I have pointed out the circularity of that situation to her numerous times, she is completely aware of it, and still chooses to do it! I really don't get it! But as I mentioned, she sees the early retirement thing as pretty outrageous, and doesn't understand why I'd even want to consider leaving my job. So, for her it's what she wants and chooses to do. It's also a security thing for her -- she is all scared about my quitting and thinks we're going to be living on the streets within a month, so it's a security blanket. Maybe she'll eventually recognize the circularity of the situation, that the sky isn't falling, and that we wouldn't be homeless after all if she quit and we reduced housing expenses.

oldtoyota

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #25 on: July 29, 2013, 08:45:53 AM »

If it costs $50k/year to live where you do, and she earns $50k a year, her income is kind of canceled out. It's just like women who find that it will cost more to put their child in day care than they earn--what's the point of working?

1. Why just women?

2. The point of working is not always what one earns now but also what one will earn in the future. An exit from the work world can cost more than the salary not received in the present. That choice can also adversely affect future earnings (and the ability to invest) over a long period of time.

I never understand the comparison of women's salaries to daycare if the men's salaries are not also being compared to the cost of daycare.

Simple Abundant Living

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #26 on: July 29, 2013, 08:59:35 AM »
I suggest you pretend, from a financial point of view, that you've retired - but keep working for another year or so.

Put 100% of your takehome pay on the house to pay it off (or at least, way, way down).  Your cost of living will drop dramatically once that mortgage is paid off - which reduces the risk of you running out of money too fast.


Thanks for the suggestion. Actually, I have been doing exactly that for the past year or so. I'd say I hit FI 1-2 years ago, and have been working since then just to build up that extra safety margin. So, I hope you'll give me a pass on another year! Unfortunately paying off the mortgage (or even coming close) where we currently live is not feasible in anything less than a decade or more (home value of about $650k with $440k owed). But once kids are out of school and we're comfortable with packing up and moving to a lower cost of living area, then I definitely expect to buy a home that costs around $150 - 200k.

I don't quite understand how you can't pay off your home for a decade.  If you followed the above advice- worked for three more years and put all your salary toward the mortgage, it would be paid off.  That would be my suggestion.  Then you could continue to live where your wife works, in the home she probably enjoys.  I get that you are excited to retire, but three years more isn't that much if you can stand your job.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #27 on: July 29, 2013, 09:40:06 AM »

I don't quite understand how you can't pay off your home for a decade.  If you followed the above advice- worked for three more years and put all your salary toward the mortgage, it would be paid off.  That would be my suggestion.  Then you could continue to live where your wife works, in the home she probably enjoys.  I get that you are excited to retire, but three years more isn't that much if you can stand your job.

I guess the answer boils down to these 3 things:

1. My own take-home pay after taxes, etc. is about $100k. So, it would take 4.5 years of 100% of my pay to wipe out our mortgage of $440k. I definitely do not want to work that long. I guess I originally said it would take a decade because I wasn't envisioning putting 100% of pay to the mortgage, but technically it's true it would not take a decade.

2. It raises the question of what is "enough." With almost $1.2M net worth + pension + SS, I feel like I've hit enough already. Having a net worth of $1.7M (through paid off house) + even higher pension + SS is probably way more than we need -- or so I keep telling my wife!

3. The old "pay off your mortgage or invest" debate. I could pay off the mortgage today by selling investments, and then some would probably say "Okay, now you're ready to retire because you don't have a mortgage." I'm just choosing to carry a low interest mortgage while investing the balance. And one day when the time is right, selling this home and being able to buy a much less expensive one with no mortgage if we choose.

meadow lark

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #28 on: July 29, 2013, 09:50:50 AM »
Yeah, when I hit enough  3.5 more years of work will not seem like "not that much" to me!  Congratulations.  Very impressed!

jrhampt

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #29 on: July 29, 2013, 01:58:10 PM »

If it costs $50k/year to live where you do, and she earns $50k a year, her income is kind of canceled out. It's just like women who find that it will cost more to put their child in day care than they earn--what's the point of working?

1. Why just women?

2. The point of working is not always what one earns now but also what one will earn in the future. An exit from the work world can cost more than the salary not received in the present. That choice can also adversely affect future earnings (and the ability to invest) over a long period of time.

I never understand the comparison of women's salaries to daycare if the men's salaries are not also being compared to the cost of daycare.

Absolutely this.  Not only present salary and future earnings, but also 401k match, access to retirement accounts, SS contributions...there's a lot at stake.  I think often there's a tendency to compare the lower earner's salary to daycare and that frequently this lower earner is the woman, but yes, it does seem like a double standard at times.

Simple Abundant Living

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #30 on: July 29, 2013, 05:08:49 PM »

I don't quite understand how you can't pay off your home for a decade.  If you followed the above advice- worked for three more years and put all your salary toward the mortgage, it would be paid off.  That would be my suggestion.  Then you could continue to live where your wife works, in the home she probably enjoys.  I get that you are excited to retire, but three years more isn't that much if you can stand your job.

I guess the answer boils down to these 3 things:

1. My own take-home pay after taxes, etc. is about $100k. So, it would take 4.5 years of 100% of my pay to wipe out our mortgage of $440k. I definitely do not want to work that long. I guess I originally said it would take a decade because I wasn't envisioning putting 100% of pay to the mortgage, but technically it's true it would not take a decade.

2. It raises the question of what is "enough." With almost $1.2M net worth + pension + SS, I feel like I've hit enough already. Having a net worth of $1.7M (through paid off house) + even higher pension + SS is probably way more than we need -- or so I keep telling my wife!

3. The old "pay off your mortgage or invest" debate. I could pay off the mortgage today by selling investments, and then some would probably say "Okay, now you're ready to retire because you don't have a mortgage." I'm just choosing to carry a low interest mortgage while investing the balance. And one day when the time is right, selling this home and being able to buy a much less expensive one with no mortgage if we choose.

I still don't see where your cash flow is coming from until you hit 60-67?  You've laid out your home expenses to be upwards of $38,000/year. If your wife's take home pay is less than 55k with taxes,etc.-what else are you living on? 

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #31 on: July 30, 2013, 08:18:20 AM »

I still don't see where your cash flow is coming from until you hit 60-67?  You've laid out your home expenses to be upwards of $38,000/year. If your wife's take home pay is less than 55k with taxes,etc.-what else are you living on?

Here's the breakdown I'm using (I'm assuming in all my projections that investments return an average of 7-8% annually, with 2-3% inflation; so about 5% real return):

Age 47 - 56:

Taxable Investments: $310k = 44k/year for 9 years
Wife's Take-home pay ~ $38k/year
Total = $82k/year (not counting any part-time income I might make)

(Our total expenses are less than this, even with the giant housing payment)

Age 56 - 60:

401k Investments = $1.1M = $81k/year for 5 years, leaving a balance of $945k after 5 years
Meanwhile, home equity = $570k, so I might sell the home and draw on this instead of 401ks
Total = $81k/year

Age 60 - 67:

Pension = $16.5k/year
401k = $945k = $65k/year for 7 years, leaving a balance of $800k after 7 years
Total Income = $80k/year

Age 67+:

Pension = $16.5k/year
Soc. Sec. = $43k (combined for me and my wife)
401k = $800k (at 4% SWR this would be $32k/year)
Savings from original home equity = $500k+ ??? (at 4% SWR would be $20k+/year)
Total Income = $102k+/year without drawing down principal?!

Note on the $80k/year income: This is extravagant. There's lots of wiggle room in all of this, I anticipate we'll be adjusting things along the way depending on how investments are actually doing and what life brings us in general. Once we give up this house and high cost area, I really can't imagine needing a budget of $80k/year. That's just lavish in my opinion. I only leveled it at $80k/year for the future to give my wife some comfort that we won't be "living like poor people", that we could continue our current standard of living. I know, it's silly, but that's the mindset I'm working with here -- just call me "The Return of Joet" ;-)

Also of course kids will be grown and gone in 10 years, so our expenses there will drop dramatically. And I will be free of child support on one child in 5 years, the other in 7 years. So overall our expenses should be going down pretty drastically, and I'd like to believe there's lots of safety net in the figures above even if Social Security doesn't pay out exactly as projected, and so on. There's no way I could image spending $100k/year or more, just my wife and I, in our old age. I'd be comfortable with half of that, assuming we don't land some catastrophic and expensive illness or something.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #32 on: July 30, 2013, 08:37:11 AM »
The most recent question about covering expenses just made me think of another thing I've learned along the way, which is pretty much a "duh" statement for this blog since it's one of the basic premises. I'd say I'm one of those people who has overdone it, and could have ER'ed much earlier had I thought more carefully about it. I always had the mindset of retiring early, but for me that meant somewhere around age 50 with anticipated savings of somewhere around $2 million. Others around me were already ridiculing the notion of retiring at that age and with "that little."

Once I discovered MMM and learned that not only was my plan feasible, but that others have done it much earlier and with much less, I had the realization that I was already FI and could retire at any time. Had I lived more frugally when I was younger and avoided some bad decisions or outcomes (like divorce), I could have made it much earlier.

So, I hope everyone on this blog/forum considers themselves fortunate for at least having their eyes opened to the possibilities (and reality). Everyone's situation is different, but FIRE is available to anyone, and those with lower incomes shouldn't be discouraged. As has been repeated 1000 times, all that matters is your expenses relative to your income, not your absolute income. I'm more of an example of excess and high cost of living. I'm more than content with, and grateful for, my path, but anyone making more sensible/frugal choices earlier in life will leave me in the dust!

frugaldrummer

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #33 on: August 05, 2013, 05:44:21 PM »
A couple questions and comments:

 - you don't mention college expenses - with three kids, those could really add up (I know, I've got 3 in college!).  How do you plan to handle that?

 - you say you're ready to retire, but I haven't heard what your motivation and plans are.  I could understand your wife's concerns if she thinks you're just going to be underfoot.  Are you just suffering from burnout in your job, or do you have something that you're itching to do in retirement? 

 - is it a possibility to cut your work hours to half time?  Would that allow you to still enjoy your job and keep the wife happy?

 - And a caveat - I participated on a divorce message board when trying to save my own marriage years ago.  Lots of women whose husbands became househusbands, seemed to grow to resent them and ended up cheating on their husbands, often with co-workers.  Right or wrong, many women seem to equate a man being the "provider" with sexiness and have trouble dealing with it when they (the women) become the primary breadwinner - no matter how much financial sense it may make.  Guess we're not as liberated as we want to think we are.

 - You could perhaps offset some of the above complaints by not retiring, exactly, but "starting a new business". Or "writing a novel". Or some other such endeavour that she could recite to her friends when they ask her what you're doing. It doesn't mean you have to be SUCCESSFUL at said endeavour ;)

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #34 on: August 06, 2013, 06:55:08 PM »
Really great insights and questions frugaldrummer, thanks for your thoughts...

- you don't mention college expenses - with three kids, those could really add up (I know, I've got 3 in college!).  How do you plan to handle that?

One positive thing that came out of the divorce settlement with my ex is that we will each share half of the college expenses for my 2 biological kids. If she keeps up her end of the bargain, I think I'll be in good shape to cover the other half. My stepdaughter's dad will be on the hook to cover her college expenses. Also as noted often on this site, ironically my kids will likely qualify for pretty good financial aid based on my retirement income.

- you say you're ready to retire, but I haven't heard what your motivation and plans are.  I could understand your wife's concerns if she thinks you're just going to be underfoot.  Are you just suffering from burnout in your job, or do you have something that you're itching to do in retirement? 

Yes, both. I am burnt out on my job, and I have a list of about 40+ things I'd like to do in retirement. None of them are any big life dream or anything, just some things I'd like to do. Some of them could bring in some small income, some would make no money at all, and some could likely turn into profitable businesses if I was willing to invest the time and effort. Initially I think I'll likely follow the path I've read others have, which is to do just about nothing but relax and decompress for the first 2-3 months. Then I'll likely be itching to take on the next venture, whatever it may be. Your observation about my wife being concerned about me being underfoot is right on the money I'd say -- the "I don't plan to do anything for 2-3 months" part of the plan doesn't generate a lot of enthusiasm from her ;-)


- is it a possibility to cut your work hours to half time?  Would that allow you to still enjoy your job and keep the wife happy?

I have thought and thought about that. I've concluded that I'm burnt out, and I just want to be done. But since I'll initially be on a Leave of Absence, if I change my mind I could always go back part time or full time. It would be great if I had the motivation to keep it up even half time, but I don't. All the same workload, politics, bullsh*t, deadlines, performance reviews, mandatory training, etc. would still be there, just crammed into half the time to do it all.

- And a caveat - I participated on a divorce message board when trying to save my own marriage years ago.  Lots of women whose husbands became househusbands, seemed to grow to resent them and ended up cheating on their husbands, often with co-workers.  Right or wrong, many women seem to equate a man being the "provider" with sexiness and have trouble dealing with it when they (the women) become the primary breadwinner - no matter how much financial sense it may make.  Guess we're not as liberated as we want to think we are.


Sorry to hear about your own divorce. I agree 100% with what you've said, and I'm keen on watching out for any changes in the marriage dynamic. I'm hoping at least the situation will be a little different since rather than being a househusband or stay at home dad living off the wife's earnings, I'd like to think of it more like "I've made it, now I've earned the next phase in life."

- You could perhaps offset some of the above complaints by not retiring, exactly, but "starting a new business". Or "writing a novel". Or some other such endeavour that she could recite to her friends when they ask her what you're doing. It doesn't mean you have to be SUCCESSFUL at said endeavour ;)


You've got it! Yeah, I am really counting on taking on those next things with enthusiasm once I've had some time to do nothing at all. I wish my wife was not as concerned about what others think, but alas she is. Once again you've nailed it -- she said almost verbatim what you said: "What am I going to tell them you're doing all day when they ask?"

I said, "How about, 'He retired from <supposedly prestigious career>, and now he's volunteering at <organization I intend to do some volunteer work>?' " It seemed to pacify her, but in general she's much more of a pessimist that looks for the pitfalls in life rather than all the optimistic outlook. We can blame her mother for that!

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #35 on: August 06, 2013, 06:56:46 PM »
Yeah, when I hit enough  3.5 more years of work will not seem like "not that much" to me!  Congratulations.  Very impressed!

You said it Meadow Lark, and thanks! You will be there very soon yourself I am certain.

Christof

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #36 on: August 06, 2013, 11:07:21 PM »
she said almost verbatim what you said: "What am I going to tell them you're doing all day when they ask?"

Since you have money invested, how about "He is an investor", or since you might tackle different projects, she could declare you an "independent consultant".

In German we have the term "Privatier" that can be used as sort of a business description. It describes a person who lives off their own (private) money and does not depend on any employer, customer or the government to make a living.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #37 on: August 07, 2013, 06:08:03 PM »
Since you have money invested, how about "He is an investor", or since you might tackle different projects, she could declare you an "independent consultant".

Ha, I really like both of those! I'm going to suggest to my wife to use those if she mentions it again.

rubybeth

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #38 on: August 12, 2013, 09:29:15 AM »

If it costs $50k/year to live where you do, and she earns $50k a year, her income is kind of canceled out. It's just like women who find that it will cost more to put their child in day care than they earn--what's the point of working?

1. Why just women?

2. The point of working is not always what one earns now but also what one will earn in the future. An exit from the work world can cost more than the salary not received in the present. That choice can also adversely affect future earnings (and the ability to invest) over a long period of time.

I never understand the comparison of women's salaries to daycare if the men's salaries are not also being compared to the cost of daycare.

Absolutely this.  Not only present salary and future earnings, but also 401k match, access to retirement accounts, SS contributions...there's a lot at stake.  I think often there's a tendency to compare the lower earner's salary to daycare and that frequently this lower earner is the woman, but yes, it does seem like a double standard at times.

Well, geez, it was an offhanded example without enough caveats, I guess. It can go both ways, obviously, with either parent, but typically women do earn less than their husband, or health benefits come via his job, so it's a given that the husband will continue working. I'm just always surprised by women who don't realize the cost of daycare when they get pregnant, and then later realize that their earnings don't even cover the cost of daycare. The loss of 401k match, SS credits, etc. are very important--those are the major reason my DH is going to continue working through grad school starting this fall, because otherwise, getting his degree would literally not be worth the cost of lost income, 401k matches, benefits, SS credits, etc.  Taking three years out of the workforce at this point in his life to do an advanced degree would not pay off by the time we want to retire.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #39 on: August 13, 2013, 11:10:29 AM »
I don't have a lesson learned on this (yet), but my latest talk with my wife has raised an interesting challenge. It may be unique to my situation, but hearing some of the other posters' discussions on this forum, maybe it's not so unique after all. And I think it boils down to optimism and pessimism. I'm going to post a separate discussion about this and I hope folks will weigh in with their own experiences or thoughts.

http://www.mrmoneymustache.com/forum/welcome-to-the-forum/sig-other-who-is-pessimistic-incompatible-with-fire/

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #40 on: September 10, 2013, 01:37:19 PM »
Today I submitted my request to take a year off from work without pay, as the stepping stone to permanent retirement. It's a cool safety net where I can come back a year later (if I wanted) and be guaranteed a job at my level. I also get to continue employer health coverage during that year, so it's a great no-lose proposition for me (assuming my request is approved). I figure one year later I can always evaluate how I'm enjoying FIRE and whether to continue it indefinitely, or perhaps go back for a short time (say, 3-6 months) for a quick way to save up some extra funds.

As of right now, my motivation to stay at my job is getting less and less with each passing day, so I'll be giving my best effort until then to not be a "short timer"! Perhaps with an entire year off, I'll have some motivation to return or -- more likely -- the taste of the good life will convince me to make retirement permanent.

CommonCents

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #41 on: September 10, 2013, 03:32:17 PM »
The divorce set back my net worth by at least $700k at the time, plus ongoing child support and other costs.

I'm curious about this statement because I read variants on it on so many online boards.  Do you mean by 700K more than half of your shared net worth pre-divorce?  If so, I understand and wow, that's really unfortunate.  If you simply mean 700k was her half (and 700K your half), then it doesn't really make sense to me to blame the divorce.  2 people had approx 1.4M before the divorce, which is 700k each, and 2 people have 700k each after the divorce (minus the lawyers fees).  It seems more that more appropriately, we all need to rearrange what we think of as the pot of "MINE" when married.


kkbmustang

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #42 on: September 10, 2013, 06:26:31 PM »
Congrats on your accomplishments! And as to the issue of what to tell people, you can also say that because of your previous business success you have found it necessary to spend more time managing your investments (since there are so many of them). That ought to shut just about anyone up.

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #43 on: September 10, 2013, 08:51:38 PM »
Another potential point for friction I see is she "jokingly" makes lots of comments about all the house work and cooking and cleaning I can do now that I'll be retired, where I definitely don't plan on trading in my full time day job for a full time house husband job! What do you think of this compromise/arrangement?

How big is your house?  We have a 1500+ square foot home. With an hour's worth of effort each day, I keep it clean.  Granted, we have no pets and don't wear shoes inside, but unless you're having frat parties in the evenings, upkeep should not be that hard. 

Cooking isn't a big deal (when you don't have toddlers clinging to your legs, that is).  Breakfast is a very easy meal.  You'll be alone for lunch, so you'll probably just make yourself something quick and light.  Most dinners usually require about 30-60 minutes of actual work.  You might have something sitting in the oven or on the stove for a few hours, but you won't be actively involved with the cooking process at that point. Occasionally, you could do something fancy that takes more time, but I don't think that's what your wife is expecting on a daily basis.

Modern appliances make cooking and cleaning pretty easy. Yay! That's not the hard part of being a housewife or househusband.  Being a stay-at-home-parent is exhausting when children are tiny and depend on your constant care and attention.  Being a homeschooling parent is demanding because you need to prepare lessons, teach lessons, possibly reteach lessons, help with schoolwork questions, and encourage.  If there are no children in the house during most of the day, I don't think it's too much to ask an at-home partner to be responsible for the cooking and cleaning. 

These are my feelings on the situation:  You have worked hard in your career for 20+ years and should definitely feel proud of the stash that you've accumulated.  It allows you to have an easier life.  Why not use it to give your wife an easier life, too?  Show her that your retiring can be a gift to you both.  She may not want to personally retire and move to a lower COL area right now, but I bet she would still like to breathe a little more easily. If she is working at a job all day, wouldn't she love to come home and just relax?  With an hour or two of effort on your part, she can feel carefree once she leaves the office.  That's a pretty great feeling, and you can give it to her!

All work is valuable.  I don't bring any money to the table, but my husband still honors my contribution to our relationship and to the family.  You honored you ex-wife when she did the same.  You may not want to work for money anymore, and that's completely understandable.  But your wife will still want to feel that you are regularly putting forth effort into bettering the family, and passive income probably won't be enough to make your wife feel that way.  (I'm sorry if that sounded kind of harsh.  I don't know a better way to say it.)

2527

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #44 on: September 11, 2013, 03:31:34 AM »
Regarding house work, pick a number of hours a week you want to spend house-husbanding, and do that much.  After your time is up for the week, let other solutions be found.

meadow lark

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #45 on: September 11, 2013, 06:22:08 AM »
Am hour of cleaning every day?  I guess that's why my house isn't as clean as I wish it were... 

MissStache

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #46 on: September 11, 2013, 08:17:35 AM »
Am hour of cleaning every day?  I guess that's why my house isn't as clean as I wish it were...

I thought the exact same thing!

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #47 on: September 11, 2013, 08:58:59 AM »
The divorce set back my net worth by at least $700k at the time, plus ongoing child support and other costs.

I'm curious about this statement because I read variants on it on so many online boards.  Do you mean by 700K more than half of your shared net worth pre-divorce?  If so, I understand and wow, that's really unfortunate.  If you simply mean 700k was her half (and 700K your half), then it doesn't really make sense to me to blame the divorce.  2 people had approx 1.4M before the divorce, which is 700k each, and 2 people have 700k each after the divorce (minus the lawyers fees).  It seems more that more appropriately, we all need to rearrange what we think of as the pot of "MINE" when married.

No, my ex did not get more than half the assets. They were split 50-50 with about $600k as her share. Then I paid another $100,000 in alimony over the next three years, plus child support and attorney fees, etc. The split in assets was fair. The ongoing alimony, on the other hand, was not so fair in my opinion, but that's the way it goes. I did not intend to blame anyone or the divorce, just noting that when you split your assets in half, it's obviously a giant setback to FIRE. Since we had already accumulated a fair amount, splitting it was a big setback. Also a frustration for me was that I had proposed a 50-50 split on day one of our separation, but she balked at that, demanded way more and demanded full custody of our kids as well, using it as a weapon. So only after a gigantic, drawn out battle with tons of unnecessary lawyer fees for us both, we ended up at the same result of a 50-50 split.

To be clear, I wasn't fighting over the money, I was fighting over custody. She demanded everything (the house, the money, the kids full time, gigantic alimony payments forever (way, way more than the $100,000 that I ended up paying), and so on. It was a completely unnecessary fight, but one I had no choice in taking since it was being handed to me and giving up my kids wasn't an option I would consider. And no, I didn't cheat on her or anything that would cause her to have a vendetta.

DoubleDown

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #48 on: September 11, 2013, 09:13:48 AM »
Another potential point for friction I see is she "jokingly" makes lots of comments about all the house work and cooking and cleaning I can do now that I'll be retired, where I definitely don't plan on trading in my full time day job for a full time house husband job! What do you think of this compromise/arrangement?

How big is your house?  We have a 1500+ square foot home. With an hour's worth of effort each day, I keep it clean.  Granted, we have no pets and don't wear shoes inside, but unless you're having frat parties in the evenings, upkeep should not be that hard. 

Cooking isn't a big deal (when you don't have toddlers clinging to your legs, that is).  Breakfast is a very easy meal.  You'll be alone for lunch, so you'll probably just make yourself something quick and light.  Most dinners usually require about 30-60 minutes of actual work.  You might have something sitting in the oven or on the stove for a few hours, but you won't be actively involved with the cooking process at that point. Occasionally, you could do something fancy that takes more time, but I don't think that's what your wife is expecting on a daily basis.

Modern appliances make cooking and cleaning pretty easy. Yay! That's not the hard part of being a housewife or househusband.  Being a stay-at-home-parent is exhausting when children are tiny and depend on your constant care and attention.  Being a homeschooling parent is demanding because you need to prepare lessons, teach lessons, possibly reteach lessons, help with schoolwork questions, and encourage.  If there are no children in the house during most of the day, I don't think it's too much to ask an at-home partner to be responsible for the cooking and cleaning. 

These are my feelings on the situation:  You have worked hard in your career for 20+ years and should definitely feel proud of the stash that you've accumulated.  It allows you to have an easier life.  Why not use it to give your wife an easier life, too?  Show her that your retiring can be a gift to you both.  She may not want to personally retire and move to a lower COL area right now, but I bet she would still like to breathe a little more easily. If she is working at a job all day, wouldn't she love to come home and just relax?  With an hour or two of effort on your part, she can feel carefree once she leaves the office.  That's a pretty great feeling, and you can give it to her!

All work is valuable.  I don't bring any money to the table, but my husband still honors my contribution to our relationship and to the family.  You honored you ex-wife when she did the same.  You may not want to work for money anymore, and that's completely understandable.  But your wife will still want to feel that you are regularly putting forth effort into bettering the family, and passive income probably won't be enough to make your wife feel that way.  (I'm sorry if that sounded kind of harsh.  I don't know a better way to say it.)

Wonderful thoughts avonlea, thanks for that. I completely agree.

Our house is about 2000 sq. ft, with the five of us, so not hard to keep up. I agree that even small efforts during the day make a big difference. I have always assumed that I would pick up more of the chores around the house during the day, and preparing some meals, etc. I think the nuance here with my wife is the expectation, and the value she places (or doesn't) on my ER. I react (maybe unnecessarily but I do nonetheless) to things when it felt like my ER plans are being devalued, that now I have "nothing better to do all day than be a full time maid, cook, etc." She didn't say those words, it's just how the nuance of her repeated "jokes" and suggestions started to wear thin with me. That's what I meant about not trading a full time paid job for a full time take care of the house job -- I do have other plans.

In her view, ER = sitting on the couch all day in a bathrobe watching TV and playing video games, which is clearly not what I have in mind and have repeatedly tried to assure her. But this is an ongoing challenge. It is becoming more and more clear how much value she places on my current high-paying position, and how she feels a loss of "status" and "what will the neighbors think" -- all things I clearly could care less about.

avonlea

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Re: Progress and "Lessons Learned" on Pending FIRE
« Reply #49 on: September 11, 2013, 11:08:17 AM »
I think the nuance here with my wife is the expectation, and the value she places (or doesn't) on my ER. I react (maybe unnecessarily but I do nonetheless) to things when it felt like my ER plans are being devalued, that now I have "nothing better to do all day than be a full time maid, cook, etc." She didn't say those words, it's just how the nuance of her repeated "jokes" and suggestions started to wear thin with me. That's what I meant about not trading a full time paid job for a full time take care of the house job -- I do have other plans.

In her view, ER = sitting on the couch all day in a bathrobe watching TV and playing video games, which is clearly not what I have in mind and have repeatedly tried to assure her. But this is an ongoing challenge. It is becoming more and more clear how much value she places on my current high-paying position, and how she feels a loss of "status" and "what will the neighbors think" -- all things I clearly could care less about.

DoubleDown, I am sorry to hear that. :(   Apologies for my misinterpreting the situation. 

I can understand a partner being anxious about finances when discussing ER.  However, worrying about "what the neighbors think" is pretty silly.  And if she does care about their opinion, why not show you off?  "Hey, check out the incredibly savvy man I married that beat the system!"  She should definitely be proud of you.