The Money Mustache Community
General Discussion => Welcome and General Discussion => Topic started by: DoubleDown on July 24, 2013, 09:24:42 AM
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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.
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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.
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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. :)
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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!
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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?
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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
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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.
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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.
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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.
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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?
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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.
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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.
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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 :)
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You said it man! You are preaching to the choir, I could not have said it better.
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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 ;-)
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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.
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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.
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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.
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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.
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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.
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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 (http://www.ssa.gov/retire2/AnypiaApplet.html), 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.
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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.
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Also, it may be worth revisiting the SS assumptions. Maybe I calculated wrong, but based on the SS retirement online calculator (http://www.ssa.gov/retire2/AnypiaApplet.html), 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.
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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.
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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.
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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.
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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.
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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.
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Yeah, when I hit enough 3.5 more years of work will not seem like "not that much" to me! Congratulations. Very impressed!
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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.
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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?
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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.
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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!
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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 ;)
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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!
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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.
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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.
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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.
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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.
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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.
https://forum.mrmoneymustache.com/welcome-to-the-forum/sig-other-who-is-pessimistic-incompatible-with-fire/
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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.
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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.
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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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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.)
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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.
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Am hour of cleaning every day? I guess that's why my house isn't as clean as I wish it were...
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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!
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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.
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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.
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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.
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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.
That's hard to do when your values entirely base on being the best in the system, and suddenly by actions out of your control you are being pushed down to the bottom. Being outside the system isn't even an option, much less something to be proud of.
We might not agree with this view, but it's a legit and common position.
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That's hard to do when your values entirely base on being the best in the system, and suddenly by actions out of your control you are being pushed down to the bottom. Being outside the system isn't even an option, much less something to be proud of.
"Being pushed down to the bottom" is taking this situation to the extreme. OP has enough investments to generate a decent yearly income on his own. Wife's income remains the same and they can still afford to live in the same place they are now.
We might not agree with this view, but it's a legit and common position.
le·git·i·mate (l-jt-mt)
adj.
2. Being in accordance with established or accepted patterns and standards: legitimate advertising practices.
3. Based on logical reasoning; reasonable: a legitimate solution to the problem.
I guess it depends on how one defines legitimate. I think that this view is in accordance with established patterns, but I don't think that it is logical.
I have lost a lot of sleep this week and am kind of snippy, but I really cannot understand why grown adults think that following the crowd is a good excuse for making choices that can hurt their own happiness or the happiness of the ones they love. OP is easing into this transition by taking a sabbatical. Can't his wife lay off the jokes and just give it a trial run? After 6 months into it, that's the time to bring up true concerns...but, again, without the jokes.
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Of course it does sound extreme to you... ;-)
Neither of us knows OP's wife and my comments might be far off. However, in my imagination she is is envisioning sitting in a café sipping a latte macchiato or a glass of white wine after an extensive shopping trip with friends. One of her friend mentions how she noticed that OP isn't playing golf as frequently as he used to. Another throws in a rumor she has heard from a friend's husband about OP not working anymore. There has been talk, you know, about financial difficulties... and - just an advice from a good friend - your last contribution to the school charity was a bit lower than usual. And adding with a knowing smile: It's all purely gossip, of course!
That's why I think the two need to find a way to present this to the outside world as an improvement over the existing situation, such as being a freelance consultant or investor instead of a retiree. As illogical as it might be, it seems that going with the crowd, the opinion of others, being productive by working, belonging to a particular circle and having a certain amount in household income is very important to his wife.
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Avonlea, I think the jokes are because the wife may feel it "unfair" if the husband retires but is content to see nothing change for her. With no kids at home, keeping house shouldn't be very difficult, with a meal on the table most nights and a clean house, still leaving plenty of time for OP's other pursuits. It's not like staying home to raise kids. However, OP has said he is opposed to be locked into a househusband role. He intends to help some more than his share, but it doesn't sound like he intends to shoulder most of this burden. If I were his wife, I would not be thrilled that he is prioritizing himself over the shared family needs.
I always find it interesting when one half of a married couple FIREs and not both. To me, marriage is a team, finances a team effort. (I admit I am blessed by parents on the same financial wavelength as each other and a husband on the same financial wavelength, so this may be an unduly biased perspective. We spend about the same. We're also within a few years of each other.) It doesn't make sense to me why both partners wouldn't FIRE at roughly the same time (excepting circumstances as waiting a year longer for a pension). I do understand that fear keeps some partners in a job, or that one partner may genuninely love their job and enjoy continuing in it. But if it's fear, then I would think that both might work a little longer rather than just putting it onto the fearful one because it's their "problem." It's not. It's both parties problem.
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Great points, CommonCents!
With conflicts of any kind, I tend to initially side with one person's point of view, compensate later by over-sympathizing with the other person's point of view... and then eventually see the in-between/larger picture. Thanks for figuring that out for me! :)
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I think an hour is an overestimate of the time needed to keep a house clean per day:
5-10 minutes doing general put things away/tidy up type tasks that don't require actual cleaning supplies, maybe wipe bathroom counters down daily here too
5-10 minutes on a once-per-week task (dust one day, vacuum the next, clean the toilets and showers, clean windows, laundry)
and then 15 minutes cleaning the kitchen after dinner each night.
To someone who is home all day, 30 minutes is nothing, but to a person working (in the traditional definition, 9-5 with boss watching over you) all day I see how it could cause cause resentment. It feels unfair to you that she would expect it, but it feels unfair to her if she didn't know you already planned to do this.
I would also add that maybe there are other kinds of invisible household work that your wife would like some discussion on a new allocation of duties. If she is feels like she is picking up ALL OF THE SLACK (regards of if this is true or not, it may be "true" to her), she may just be looking for an acknowledgement of the work she does. The following list came out of an otherwise terrible article, but it might help with the discussion of how you will contribute (contribute by her definition) to the family without a traditional job (childcare stuff left in for completeness):
Childcare management and communication
Cooking and meal preparation
Dishwashing
Laundry, ironing and mending work
Grocery shopping
Home decorating (garage sales, picture hanging, etc.)
Yard work
Afterschool lessons, weekend activities, and summer camp planning and coordination (researching, driving to, waiting during, and equiping)
Communication with extended family (calling mom, mailing gifts, etc.)
General household cleaning (sweeping, vacuuming, garbage removal, window washing, etc.)
Making travel arrangements and packing
Party planning and holiday preparation (cards, meals, decorations, cleaning)
General social outreach (setting up playdates, interacting with neighbors, making plans with friends, etc.)
Monthly financial chores (bill paying, health claims and tax prep)
General shopping and consumer research (for clothing, gifts, technology, media, etc.)
Putting kids to bed and waking up with them in the middle of the night
Getting kids ready for school, dropping them off, meeting the bus in the afternoon
School-related tasks and communication (contacting teachers, delivering forgotten items, volunteering, attending conferences and shows)
Staying home with sick kids
General family scheduling
Coordinating and completing home and auto repairs
Documenting family history (taking and organizing photos)
Disciplining kids (establishing and enforcing consequences for misbehavior)
Managing and picking up the pieces after major upheavals (moves, home sales, funerals, job losses)
Pet care (walking the dog, checking out kennels, etc.)
Emotional work (resolving playground disputes, offering advice, proactively keeping the peace among siblings)
Long-term financial planning (for retirement, college tuition, etc.)
Obviously the whole list doesn't apply to everyone, it is just a starting point.
None of this speaks to the "what will the neighbors think" aspect, but it sounds like you need to have a discussion with your wife and without the jokes so you all can actually listen to what the other person is saying and take time to appreciate and value their perspective.
Congratulations on reaching the point where you can have this argument, you've clearly worked hard to get a point where you can retire/take a leave of absence.
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Great discussion. To me this is a tough, unresolved balance when you have two people with different value systems (such as caring what the neighbors think, or choosing to work many more years in order to stay in a high cost of living area). Or in our case adding to the mix, her as a naturally risk-averse and pessimistic person, and me the opposite.
If one party is ready to FIRE, and can in fact support both parties in the marriage based on their savings, but the other party does not value that and wants BOTH to keep working, that's a difficult situation. The person who wants to keep working might have all kinds of valid reasons for doing so (my wife does), but does that mean the other party has to work too? Does that set up an unbalanced partnership? Does the fact that I earn 3x my wife matter, or should it matter (meaning on the one hand maybe I have a greater responsibility in the financial dynamic for us both, but on the other hand I've earned retiring early and her choice to continue working is entirely her choice)?
At what point do you draw the line on staying in a high cost of living area and having to work to do so? 5 more years? 10 more years? 20 years? I guess the answer will be "it depends" for each couple or situation. In the case of my wife and me, I think we've found a good balance we're both satisfied with, but it may be a work in progress!
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For what it is worth, friends of mine who have retired at a conventional age have said that retirement was a work in progress for them. The friends I am talking about are people who had good careers that they enjoyed for the most part. It took time to get used to being retired and sometimes it took a year or so to get used to it. So yes it will be a work in progress with an early retirement too.
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Here's a fun hypothetical: You and your partner have saved twice what you need to FIRE. So if you decided you needed $1 million, imagine you've got $2 million, ensuring you have more than enough for a very comfortable and risk-free retirement (that's not the case with me, I just say double your number so any risk of not having enough is removed from the discussion).
But, your partner is averse to the social stigma, "What will the neighbors and friends think of a 46 year old (or insert your age here) high earner who doesn't work, who 'gives up' at such a young age???" They are opposed to your retirement because of that. What do you do??? Keep dragging yourself to your soul-crushing job with no end in sight to satisfy their need for status? Tell them to "get over it"? Somewhere in between?!
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For what it is worth, friends of mine who have retired at a conventional age have said that retirement was a work in progress for them. The friends I am talking about are people who had good careers that they enjoyed for the most part. It took time to get used to being retired and sometimes it took a year or so to get used to it. So yes it will be a work in progress with an early retirement too.
That's good to know, thanks!
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Great discussion. To me this is a tough, unresolved balance when you have two people with different value systems (such as caring what the neighbors think, or choosing to work many more years in order to stay in a high cost of living area). Or in our case adding to the mix, her as a naturally risk-averse and pessimistic person, and me the opposite.
If one party is ready to FIRE, and can in fact support both parties in the marriage based on their savings, but the other party does not value that and wants BOTH to keep working, that's a difficult situation. The person who wants to keep working might have all kinds of valid reasons for doing so (my wife does), but does that mean the other party has to work too? Does that set up an unbalanced partnership? Does the fact that I earn 3x my wife matter, or should it matter (meaning on the one hand maybe I have a greater responsibility in the financial dynamic for us both, but on the other hand I've earned retiring early and her choice to continue working is entirely her choice)?
At what point do you draw the line on staying in a high cost of living area and having to work to do so? 5 more years? 10 more years? 20 years? I guess the answer will be "it depends" for each couple or situation. In the case of my wife and me, I think we've found a good balance we're both satisfied with, but it may be a work in progress!
It depends. :)
I hear you on the virtues of saving money by living in a lower cost area, but from someone who has moved many times (grew up a military brat) - 17 different addresses to be specific (and even counting college as only 1), roots are important too, being near family and friends. So for me...only being able to retire if I leave my friends, family, and connections and move to a low cost area is not worth it. That to me is an unreasonable expectation.
I think each couple has to work it out together. Generally, my opinion is that if generally equal ages, then it seems reasonable both should be able to FIRE together. One shouldn't FIRE before another simply because they earn more, because both parties contribute to the marriage in different ways - by supporting each other, taking on household/family chores, in addition to bringing home paychecks. In my marriage, we've both had a turn at earning 2x what the other did, so this is maybe easier for me. One also shouldn't FIRE before the other because you think different sums are needed. (This can be really tough, because you have to work out together a sum sufficient to allay concerns. Maybe one way to approach it is agree ex ante on X times what is needed, then plug in figures for what is needed agreeing on them together, and then look at the results and stick to them. And if one refuses at the end of the exercise to what was agreed beforehand, then the other party can feel ok FIREing at that point still because the process was agreed on.).
Now, all that said, working longer for fear of neighbors opinions is ridiculous.
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Here's a fun hypothetical: You and your partner have saved twice what you need to FIRE. So if you decided you needed $1 million, imagine you've got $2 million, ensuring you have more than enough for a very comfortable and risk-free retirement (that's not the case with me, I just say double your number so any risk of not having enough is removed from the discussion).
But, your partner is averse to the social stigma, "What will the neighbors and friends think of a 46 year old (or insert your age here) high earner who doesn't work, who 'gives up' at such a young age???" They are opposed to your retirement because of that. What do you do??? Keep dragging yourself to your soul-crushing job with no end in sight to satisfy their need for status? Tell them to "get over it"? Somewhere in between?!
I wish I could tell them to get over it, but the reality is I couldn't. I would, however, explicitly state what my plans were and tell them that if they don't think it is working for the family in 6 months that we can re-evaluate. I would hope that in that period of time I would be able to demonstrate that ER doesn't mean sitting on the sofa doing nothing.
Of course, my definition of ER (like most here) is to pick and choose what I work on and when. I would also use that time to do things around the house. I'm hoping to hit that point by the time both of my little kids are in elementary school (another 5-6 years). I'm hoping I have some passive income and the company I am now starting will be able to pull in 6-9 months worth of work a year.
Good luck!
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For what it is worth, friends of mine who have retired at a conventional age have said that retirement was a work in progress for them. The friends I am talking about are people who had good careers that they enjoyed for the most part. It took time to get used to being retired and sometimes it took a year or so to get used to it. So yes it will be a work in progress with an early retirement too.
That's good to know, thanks!
See, sometimes it pays to have older people kicking around here bringing this kind of experience! Big LOL!!! I got here late and I am learning from you too!
Anyway, I'm not sure exactly what you are planning to do in ER but if you are volunteering you could call it "working at a non-profit"? Just a way of putting it to the neighbours.
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Thank you DoubleDown for one of my favorite threads on this forum. I've been reading the blog and forum for months now, but just getting registered today.
At my first read of this thread, I would have replied that I'm more alligned with your wife's view that it's too early to give up your salary. I think many here believe you are FI when you can live off your passive income plus SWR of your savings and are planning to never draw down their principle.
I understand your logic now after a second read through the comments. It's not for everyone.
Think of it as stepping off the side of a mountain with a hang-glider. Have you climbed high enough to fly into retirement?
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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.)
+1. I'd been thinking along these lines, but Avonlea has said it very well.
Sounds like the numbers are not the greatest challenge here. Helping your wife gradually become more comfortable with the idea is. Although in 2013 we think we have created a more free thinking gender equal society, I'm not sure its really always the case. Many of us still have some vestiges of traditional views about sex related roles in a marriage, that are now often suppressed because its not idealogically correct to express them. But they still emerge, when there is a situational challenge. Sounds like this could be happening for your wife.
I think you should take on the household chores/cooking, but do it efficiently as if it were a business task, so that doesn't it take over your life, since housework/home making can expand to fill all your available time if you let it. (I found this out the hard way in semiretirement this last 10 months).
While you are decompressing for a couple of months, declare yourself "on vacation". Could your wife take some leave also during that time, so you can be on vacation together? Once the vacation is over, find some projects for yourself and to benefit your household that you enjoy. I think I understand where you are coming from, you don't want to retire to end up the fulltime household messenger boy.
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Does anyone find that their expenses go down significantly when on FIRE? Like things you used to pay for you don't? I know the MMM is to pay for as little as possible anyway, but I got to thinking about our own situation and one of the things we pay for is lawn care. My allergies are horrible and if I were doing the lawn I'd have to take a Benedryl afterward. That would essentially wipe out a day and depending on the season, two days. While working, I'm not willing to do that, but after FIRE, I might get a tractor (used) and do it myself. That'd be almost a grand a year we wouldn't have to spend.
I'm sure from a DIY part people spent less cause they had time to do the work..
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Its commonly around here said that your expenses will reduce due to cessation of work related expenses and more time to avoid convenience spending.
Provided you don't take up really expensive hobbies:) Or shopping because now you have time :)
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This thread is really interesting and has been on my mind.
OP, I am at a loss to see how your wife could see that your status could be wiped out in your community if you are retired early.
I mean, I can see how this could be a POV, but it makes me question perception and expectations. Two words which come up frequently for us when we bend the rules and do not confirm to what is expected of us, MMM philosophy included.
I think it goes beyond money and status and boils down to what you expect of each other (in life and your marriage) and your perception of yourselves, others, what you project onto society via whatever means; like job, wealth, house, car...all those standard status symbols.
There is a really good book by Alain de Botton called Status Anxiety; the philosophy of society. It's an interested read.
Good luck OP. I am the wife on our marriage and it did take a while to get DH on board and we do have a much larger buffer than we need, but as far as our essential life values go, we are on the same page.
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+1. I'd been thinking along these lines, but Avonlea has said it very well.
Sounds like the numbers are not the greatest challenge here. Helping your wife gradually become more comfortable with the idea is. Although in 2013 we think we have created a more free thinking gender equal society, I'm not sure its really always the case. Many of us still have some vestiges of traditional views about sex related roles in a marriage, that are now often suppressed because its not idealogically correct to express them. But they still emerge, when there is a situational challenge. Sounds like this could be happening for your wife.
I think you should take on the household chores/cooking, but do it efficiently as if it were a business task, so that doesn't it take over your life, since housework/home making can expand to fill all your available time if you let it. (I found this out the hard way in semiretirement this last 10 months).
While you are decompressing for a couple of months, declare yourself "on vacation". Could your wife take some leave also during that time, so you can be on vacation together? Once the vacation is over, find some projects for yourself and to benefit your household that you enjoy. I think I understand where you are coming from, you don't want to retire to end up the fulltime household messenger boy.
Thanks so much for your insights happy, very helpful. Yes, I agree with everything you've said about some of the different factors at play, such as views on traditional roles, etc. Numbers are definitely only part of the challenge, related to my wife's general pessimism and risk-aversion, which is why it's sometimes hard to tease apart what's really going on. I'm going to follow your suggestions. Unfortunately my wife taking a few months off isn't an option she would even consider. I'll suggest it, but I'm certain she would think even asking for time off at work would be a career death sentence. And she has no interest in leaving, she absolutely wants to remain working.
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This thread is really interesting and has been on my mind.
OP, I am at a loss to see how your wife could see that your status could be wiped out in your community if you are retired early.
I mean, I can see how this could be a POV, but it makes me question perception and expectations. Two words which come up frequently for us when we bend the rules and do not confirm to what is expected of us, MMM philosophy included.
I think it goes beyond money and status and boils down to what you expect of each other (in life and your marriage) and your perception of yourselves, others, what you project onto society via whatever means; like job, wealth, house, car...all those standard status symbols.
There is a really good book by Alain de Botton called Status Anxiety; the philosophy of society. It's an interested read.
Good luck OP. I am the wife on our marriage and it did take a while to get DH on board and we do have a much larger buffer than we need, but as far as our essential life values go, we are on the same page.
I'll check out that book recommendation, thanks for that!
I recognize I have a role in the new, changed outlook thrust upon my wife. Retiring early was always on my radar and shared with her prior to us marrying, but I was always thinking somewhere around 50 - 55. Now that I've concluded I can do it much earlier, this wasn't what she bargained for exactly, so I've admittedly changed the ground rules a bit. She thinks 50 is a "respectable" age to retire, but earlier than that is laziness. She's probably right, I'm feeling lazier about full time employment every day ;-)
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Hey Doubledown, somehow I missed this thread until just now. Very interesting situation you have got yourself into, sir.
Looks like you have some selling to do for your wife. I would suggest the "incremental sell". Don't make her commit to this being your ER forever. Just get her to commit to giving the next year off a good honest try. Maybe schedule a formal evaluation with her at 6 months to see how it is going, and 9 months to see if she is ok with making the sabbatical permanent. That will give her an "out" and hopefully get her buy in that this isn't necessarily a permanent early retirement if it just absolutely doesn't work out for your family (for financial or emotional reasons). And obviously keep in tune with what she's thinking and feeling.
FYI, in case you want to prep a little bit for possible career re-entry down the road in a year or five, you may want to check out my response to a reader's question about retiring early but preserving the ability to go back to work someday:
http://rootofgood.com/sabbatical-mid-career-break-retired/
Hope that helps! And good luck! This can be a difficult process to navigate for yourself and for your spouse. Change is always hard, and fear of the unknown is a strong feeling.
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I am glad that my DW is on board with our plans. I personally don't give a happy monkey fuck what the neighbors think. I can't imagine why anyone else would.
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I am glad that my DW is on board with our plans. I personally don't give a happy monkey fuck what the neighbors think. I can't imagine why anyone else would.
Oh yeah, forgot to mention the neighbor's opinion. +1 to that Brewer. You phrased my feelings about that subject as artfully as anyone could.
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About 8 years ago, my friend's husband retired at 55. I was in my 40s at the time. I had recently returned to work after being a sahm for many years. I could not for the life of me fathom why someone would retire from a good, stable, well paying job at 55, without little kids to care for. I thought it was an incredible waste of talent and productivity. I also couldn't understand how my friend was okay with it. Then my own husband was laid off at the beginning of the recession, at 50. He had a good freelance gig for a while, but when that dried up, looking for work at 50+, in a very youth oriented profession, took such a toll on him, that I was really glad when he decided to try something new. His hobby became his business. Since I was so confused/judgmental about my friend's husband's ER, I am very aware that others have the same reaction to us. Reading this blog has really helped me see that what my friend's husband, and now mine, were able to achieve is something to be incredibly proud of. DoubleDown, you will be self employed, a consultant, actor, artist, writer, what ever you want, but you'll certainly find something satisfying to do that can be "named", for the sake of your DW, friends and neighbors. Best of luck to you and congratulations!
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Did your request for a LOA get approved? If so, when does it start?
I appreciate you sharing your insights and lessons learned. Congratulations on achieving your goal.
Look forward to hearing how it goes once you actually stop working!
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So my first lesson learned: As already mentioned 1,000 times on this site, don't get divorced!
The message should be DON'T GET MARRIED!!!
Especially if you are the man in the marriage. There is no other LEGALLY BINDING CONTRACT that any sane man would say "yes I agree to those terms.....where can I sign my name". In New York any marriage that is over 10 years will be considered "long term marriage" and the man may end up paying LIFE TIME ALIMONY. How could that ever be fair? What if you get divorced at 40 and she lives till 80? Marriage is one of those things that at the time felt like the right thing to do. In most cases if you are the man in the divorce it is a "guilty until proven innocent" mentality and all the divorce laws are geared towards the "poor poor woman". If you have children (and all you want to do is what is rite for them) you will still be put through hell if you are dealing with a vengeful bitter ex that is out to destroy you. If you have kids with a woman hell bent on ruining you then you are dead before it even began. In most cases the woman has way to much power if a divorce is to happen.
It is a proven fact that marriage is the leading cause of divorce.
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Well I don't want what has been a very useful thread to degenerate into bitter divorce cesspool. However I do think Doubledown has a point about high income earners ( no matter what sex) and divorce especially when there is a disparity in earnings. I don't live in US so its possible that US law is more "sexist", but Australian law makes decisions on the basis of income, not the sex of the partner earning it. For example, although my medical career had become pretty well decimated by interrupted employment and child raising, I was told "don't even think about spousal support since the courts will never award you anything since you are a doctor, even though you have had and will continue to have child raising responsibilities". One of my female colleagues worked full-time supporting her hubby to do his PhD: it took him a loooong time and the PhD just never quite got finished. The deal had been once he got the PhD she would take time off having kids. By the time the divorce came through she was earning a senior wage... and got lumbered with a large sum of spousal support, since he was still not earning.
What Doubledown made me appreciate was that being the higher income earner, if you get divorced, is actually a disadvantage...in many partnerships the high income earner appears to have more say or more power within a marriage in a traditional sense....kind of ironic this could become an achilles heel in divorce.
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Well I don't want what has been a very useful thread to degenerate into bitter divorce cesspool.
I couldn't have said it better myself.
Please don't let this thread derail.
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Agreed. This is a great thread with lots of good discussion.
I have a lot of perception issues related to FIRE in my family right now as well. I tried to get an early idea about where DW stands on the matter and she kinda brushed it off as near impossible. Granted, it certainly seems that way, but i would guesstimate that we could potentially be ER around 40 (currently 28).
I think she will be worried about what her parents and family would think. She comes from a family of hardworking lawyers and business owners so it may create a sense of 'what are y'all doing with yourselves?' attitude.
The other funny bit is how classes of jobs shape peoples perception. We often get a lot of......not quite pity but it is the closest word I can think of, from others because we are both 'poor struggling educators'. Everyone always seems to be in a rush to help us out because we are less fortunate. I always find myself thinking "thanks, but do you not realize that we make a little over 100K gross?" Pretty sure some of those people are in much, much worse financial shape than us.
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DoubleDown - thanks for sharing all of this. Just out of curiosity, has your wife read this thread? I'm guessing it may be a little difficult for her to read, but just wondering if you have thought about it.
I got really lucky - I told my wife about my goal of retiring in 10 years (at 51) a couple weeks ago and she is on board with it. In fact, she was pretty excited and told her co-workers and her mom. Her feeling (that I agree with) is that by making it public, it is that much more motivating to stick with it. It's been interesting reading this thread to see how non MMM folks respond to FIRE.
edit: Regarding different incomes/goals. This part is difficult. My wife still plans on retiring at 65. I'd really like her to give herself the option of retiring early, but I can't force the issue. I'm working on it though. I think FIRE would be a lot more fun with her.
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Thanks for posting this. I've really enjoyed reading your thread. I'm the same age as you and have about the same amount saved and I'm at the same point in my job. I feel the hitting point was accelerated in part knowing that I have enough to FIRE. I personally would downsize on the house. I'm not married but in a committed relationship and the house was paid off by my partner years ago and it was amazing how this speed up our savings rate. I would never tell anyone (including family) that I retired from work early. I would just tell people that I do computer work or consult from home.
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This thread has been interesting to read. There seems to be a lot of hand-wringing about "what will we tell people" and "what will people think". I'm probably one of the least confrontational people out there, but my attitude is that I don't give a flying fuck what people think of me retiring early! It won't be the first time that people don't agree with my decisions....and I'm sure it won't be the last! I take pride in being a little contrarian.
I do share the OP's position on trying to convince your SO that you're not going to be sitting around in your sweatpants all day - so I've framed it differently to my husband and instead talk about how I want my life to be when I no longer have to work at my Corp gig - this makes it much more palatable and something he can easily get on board with. Afterall, he knows I hate my job and wants to see me happy.
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This thread has been interesting to read. There seems to be a lot of hand-wringing about "what will we tell people" and "what will people think". I'm probably one of the least confrontational people out there, but my attitude is that I don't give a flying fuck what people think of me retiring early! It won't be the first time that people don't agree with my decisions....and I'm sure it won't be the last! I take pride in being a little contrarian.
I was worried about how to explain to friends and family that I was retired early (at 33). It hasn't really been an issue. For those that you want to tell, just tell them the truth. "I saved and invested a lot. Now I live off my investments and do what I want all day". Odds are they know you aren't a spendthrift and haven't been spending money drunken sailor style, so they may not be so surprised.
For other people, I cheat a little and say I work from home a little, do consulting, or something like that. I guess I kind of do. Dividends don't transfer themselves from my brokerage account into my checking account after all!
Of course I have 3 kids, so I'm also a "stay at home dad". Easy enough explanation too!
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I retired on Friday!
Yesterday (Monday) was my first regular day off from work, although it was a little unusual because kids also had the day off from school yesterday and today for "teacher work days." So, it seems more like an extended weekend for now. Tomorrow will be the first day off where it's just me.
But man, I am enjoying it already and literally laughed out loud at all the backups described in this morning's traffic report. And I smiled when I looked out my window while eating breakfast and saw my neighbor getting in his car to drive to work. I'll be going to vote in our state election in a little while when most everyone else will be at work, so there should be no lines. Much later today I'll be meeting my wife and some (former) coworkers for happy hour. I know I will enjoy meeting them when they are coming from work and I'm coming from my day off, but I will not gloat ;-)
I'm treating the next week or two as a "staycation" with no real plans other than to do whatever strikes me at the moment. That will likely include: sleeping in; reading the paper over breakfast; working out; taking a nap; and doing some small projects around the house. Although I do intend to have a margarita on the patio tomorrow when it's supposed to be warm, just so I can say I did.
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Congratulations :)
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I retired on Friday!
But man, I am enjoying it already and literally laughed out loud at all the backups described in this morning's traffic report. And I smiled when I looked out my window while eating breakfast and saw my neighbor getting in his car to drive to work. I'll be going to vote in our state election in a little while when most everyone else will be at work, so there should be no lines. Much later today I'll be meeting my wife and some (former) coworkers for happy hour. I know I will enjoy meeting them when they are coming from work and I'm coming from my day off, but I will not gloat ;-)
I'm treating the next week or two as a "staycation" with no real plans other than to do whatever strikes me at the moment. That will likely include: sleeping in; reading the paper over breakfast; working out; taking a nap; and doing some small projects around the house. Although I do intend to have a margarita on the patio tomorrow when it's supposed to be warm, just so I can say I did.
I started to cry reading this. This is what it is all about. So happy for you! Good luck and keep us updated on your projects so we can be inspired.
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DoubleDown: Congratulations! I am enjoying a quiet moment living vicariously through you.
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Congratulations, DoubleDown!
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Awesome! Good for you. You've definitely earned it!
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congratulations! Enjoy your free time and please keep us updated about how it is going. I have really enjoyed this thread.
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Just saw this thread today and noticed the date so I read with anticipation to discover what the current status was. I was happy to find that you did it!!! When you mentioned enjoying some breakfast and watching the neighbor head off to work, it made me smile.
True Inspiration, Brother!!! Rock on.
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Congratulations. Happy days:) Enjoy that marguerite.
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Divorce scenarios make me seethe with resentment and anger whenever I hear of them -- because I think, "what if it happens to me?" The idea of giving up so much of what I worked so hard for makes my blood boil.
Like DD, my wife does not yet share my enthusiasm for FIRE (though she has softened her position somewhat). She commented that she's always just accepted that she has to work until 65. Well, good for her, but that is NOT my plan. And the way I see it, if I can bring in enough in ER to cover the same share of the expenses that my current salary provides, then her objections have no merit. She's not the one who commutes 2+ hours/day!
An FYI for the pre-nup advocates, if what you are trying to protect is a pension that you expect to receive, your future spouse cannot waive her rights to that pension under ERISA laws. Only a "spouse" can waive ERISA benefits. So you could, in theory, set up an agreement pre-marriage for her to sign off on those benefits once you've said "I do," but I don't know if it would hold up in court. And you would likely need lawyers involved to make anything stick, otherwise it could look like coercion.
Women now make up more than half the workforce, and earn well more than half the college degrees conferred in the U.S. every year. It is high time that the archaic divorce laws of the past get tossed in the trash heap of other discarded anachronisms.
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Congrats, Doubledown. Welcome to the Club.
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Just saw this thread today and noticed the date so I read with anticipation to discover what the current status was. I was happy to find that you did it!!! When you mentioned enjoying some breakfast and watching the neighbor head off to work, it made me smile.
True Inspiration, Brother!!! Rock on.
I too joined this thread late and read it with hope of success. CONGRATS!!!
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Hope you are enjoying your first full day of retirement!
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I retired on Friday!
!!!!!Congratulations!!!!!
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I think each couple has to work it out together. Generally, my opinion is that if generally equal ages, then it seems reasonable both should be able to FIRE together. One shouldn't FIRE before another simply because they earn more, because both parties contribute to the marriage in different ways - by supporting each other, taking on household/family chores, in addition to bringing home paychecks.
Agree, IF the partners are equal ages. I am 7 years older than my wife, and had a much harder path in life to get where I am now. As an only child of two working parents, she pretty much had everything handed to her -- new cars, education paid for, debts paid off by parents, etc.. I don't begrudge her that, but I had to bootstrap my way out of a lower middle class existence to where I am now, and I see FIRE as the reward for MY efforts and choices. I also earn a lot more than she does. We could not both RE on my anticipated RE date on my pension/401k -- so she will need to continue working and contributing to her 401k for 7 more years. But she will still be able to RE at around 55 (the same age at which I hope to RE in about 7 years). That seems like a fair arrangement to me.
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OP, congrats! Did you work things out with your wife?
Women now make up more than half the workforce, and earn well more than half the college degrees conferred in the U.S. every year. It is high time that the archaic divorce laws of the past get tossed in the trash heap of other discarded anachronisms.
Probably need to revise the child care provisions in this country at the same time. Women still are the ones who take time out from careers to be at home with young kids the majority of the time. (And still earn less than men at comparable jobs.)
I think each couple has to work it out together. Generally, my opinion is that if generally equal ages, then it seems reasonable both should be able to FIRE together. One shouldn't FIRE before another simply because they earn more, because both parties contribute to the marriage in different ways - by supporting each other, taking on household/family chores, in addition to bringing home paychecks.
Agree, IF the partners are equal ages. I am 7 years older than my wife, and had a much harder path in life to get where I am now. As an only child of two working parents, she pretty much had everything handed to her -- new cars, education paid for, debts paid off by parents, etc.. I don't begrudge her that, but I had to bootstrap my way out of a lower middle class existence to where I am now, and I see FIRE as the reward for MY efforts and choices. I also earn a lot more than she does. We could not both RE on my anticipated RE date on my pension/401k -- so she will need to continue working and contributing to her 401k for 7 more years. But she will still be able to RE at around 55 (the same age at which I hope to RE in about 7 years). That seems like a fair arrangement to me.
Yup, that's why I put the age bit in there. My husband is 4 yrs older than me. I anticipate working a bit longer than him as a result (although I'll note we have equal time in the actual workforce due to his graduate degree taking 7.5 years and my two taking 3). Also bc he hates working - not that I like it, but I'm not depressed.
That said, I don't really think whether one party had things handed to them or not ought to really matter. In that if she had it handed to her and reversed the scenario so she saved (rather than spending) the benefit, I wouldn't say that she ought to retire sooner, or you in this case. The earning a lot more, as I said, I particularly disagree with. Maybe it's bc my husband and I have flipped at times who that is. But more I think it's because money shouldn't be held as a lever in a marriage, whether it's "well I make more than you so I decide that we buy X car or fancy toy" or it's "well I make more than you so I get to retire when I want." It also discounts non-monetary contributions to the relationship.
All this of course is my opinion on how to do things. As long as the parties in the relationship are happy and agree, then these ideas don't matter.
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OP, congrats! Did you work things out with your wife?
Women now make up more than half the workforce, and earn well more than half the college degrees conferred in the U.S. every year. It is high time that the archaic divorce laws of the past get tossed in the trash heap of other discarded anachronisms.
Probably need to revise the child care provisions in this country at the same time. Women still are the ones who take time out from careers to be at home with young kids the majority of the time. (And still earn less than men at comparable jobs.)
I think each couple has to work it out together. Generally, my opinion is that if generally equal ages, then it seems reasonable both should be able to FIRE together. One shouldn't FIRE before another simply because they earn more, because both parties contribute to the marriage in different ways - by supporting each other, taking on household/family chores, in addition to bringing home paychecks.
Agree, IF the partners are equal ages. I am 7 years older than my wife, and had a much harder path in life to get where I am now. As an only child of two working parents, she pretty much had everything handed to her -- new cars, education paid for, debts paid off by parents, etc.. I don't begrudge her that, but I had to bootstrap my way out of a lower middle class existence to where I am now, and I see FIRE as the reward for MY efforts and choices. I also earn a lot more than she does. We could not both RE on my anticipated RE date on my pension/401k -- so she will need to continue working and contributing to her 401k for 7 more years. But she will still be able to RE at around 55 (the same age at which I hope to RE in about 7 years). That seems like a fair arrangement to me.
Yup, that's why I put the age bit in there. My husband is 4 yrs older than me. I anticipate working a bit longer than him as a result (although I'll note we have equal time in the actual workforce due to his graduate degree taking 7.5 years and my two taking 3). Also bc he hates working - not that I like it, but I'm not depressed.
That said, I don't really think whether one party had things handed to them or not ought to really matter. In that if she had it handed to her and reversed the scenario so she saved (rather than spending) the benefit, I wouldn't say that she ought to retire sooner, or you in this case. The earning a lot more, as I said, I particularly disagree with. Maybe it's bc my husband and I have flipped at times who that is. But more I think it's because money shouldn't be held as a lever in a marriage, whether it's "well I make more than you so I decide that we buy X car or fancy toy" or it's "well I make more than you so I get to retire when I want." It also discounts non-monetary contributions to the relationship.
All this of course is my opinion on how to do things. As long as the parties in the relationship are happy and agree, then these ideas don't matter.
I would agree that age matters - it doesn't always, but being younger does often mean a later career start. My husband is 3 years younger than I am. I plan to leave the work force in ~10years at the age of 45, but he will continue working for at least 4 more years maybe longer. First because he still isn't convinced there will be enough money for the amount of travel he wants to do, but mainly because he works for the government and it would be silly to leave 4 years before he becomes eligible for his pension (barring of course any future changes). He started working later than I did, so he isn't eligible for future benefits at the same time I am.
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I would agree that age matters - it doesn't always, but being younger does often mean a later career start. My husband is 3 years younger than I am. I plan to leave the work force in ~10years at the age of 45, but he will continue working for at least 4 more years maybe longer. First because he still isn't convinced there will be enough money for the amount of travel he wants to do, but mainly because he works for the government and it would be silly to leave 4 years before he becomes eligible for his pension (barring of course any future changes). He started working later than I did, so he isn't eligible for future benefits at the same time I am.
My wife and I are in the opposite position -- I have 5 years to go until I'm pension eligible, and I'm the older one. She mostly enjoys her job and doesn't have any reservations about working longer. But from her initial reaction to my floating the idea of retiring at 55, I suspect she's concerned about what I will be doing with my free time, and I think she has it in her mind that I will be taking off for days or weeks at a time to pursue my recreational passions. To be fair, it's not an entirely unfounded fear on her part! I would love to take off for days at a time to do the things I love (she doesn't share many of the interests that I'd be pursuing), but I realize that's not feasible or a responsible way to treat our relationship. So I intend to find a middle ground, hopefully making a small living locally doing what I love to do. She's slowly warming to the idea, but I realize I have to approach it with a great deal of tact and with assurances that I'm not planning to just disappear while she continues working.
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That said, I don't really think whether one party had things handed to them or not ought to really matter. In that if she had it handed to her and reversed the scenario so she saved (rather than spending) the benefit, I wouldn't say that she ought to retire sooner, or you in this case. The earning a lot more, as I said, I particularly disagree with. Maybe it's bc my husband and I have flipped at times who that is. But more I think it's because money shouldn't be held as a lever in a marriage, whether it's "well I make more than you so I decide that we buy X car or fancy toy" or it's "well I make more than you so I get to retire when I want." It also discounts non-monetary contributions to the relationship.
All this of course is my opinion on how to do things. As long as the parties in the relationship are happy and agree, then these ideas don't matter.
I get where you're coming from CommonCents, but from my vantage point, I worked a lot harder and sacrificed a whole lot more to get within arm's reach of FIRE, despite my wife's spendy habits and total lack of financial common sense, so I deserve to reap the benefits of early retirement. Particularly where, like DoubleDown, I can replace my working life income (or at least a significant percentage of it) in retirement, AND she will be able to retire early at around the same age I did.
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Wow, thank you all so much for the very kind thoughts! You guys are awesome.
I wish everyone who's still working toward FIRE was joining me right now. I have to say, so far it's been everything I hoped. MMM's and others' descriptions have been accurate, and they were right that it's great. I've enjoyed being able to go grocery shopping when it's not crowded, and generally do whatever the hell I please. It still hasn't quite sunk in though -- I still have that lingering feeling like I have deadlines at work, a meeting to go to, or that I should be somewhere doing something specific. But I'm sure that will pass soon enough.
Although I haven't done any radical, exciting things so far like a backpacking trip through the Appalachians, I love ER so far. And honestly no radical things have been even planned, as I have young kids at home. Lord willing, there should be plenty of opportunities like that soon enough, and I'm sure we'll do some cool things this summer when the kids are off school.
OP, congrats! Did you work things out with your wife?
Yes, we essentially reached a common understanding. I'd say she still is not favorable towards my retiring, but she has accepted it. For her part, she's willing to see how things go and hopefully over time her fears of us running out of money, or me becoming a lazy bum that is the subject of all kinds of gossip, will subside. I've been taking care of some chores around the house and having some dinners ready, so that's helped.
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OP, congrats! Did you work things out with your wife?
Yes, we essentially reached a common understanding. I'd say she still is not favorable towards my retiring, but she has accepted it. For her part, she's willing to see how things go and hopefully over time her fears of us running out of money, or me becoming a lazy bum that is the subject of all kinds of gossip, will subside. I've been taking care of some chores around the house and having some dinners ready, so that's helped.
That's great. I think agreeing to take it one step at a time can be helpful - it's much easier for her to agree to that and see how things go, whether better than expected (chores! dinner! time with kids!) or worse, than to feel you've locked in a major life decision and can't go back if it's not working - whether because you hate retirement or because your house fell into a sinkhole uninsured and you need more money.
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So you took the leap and retired...how's it going? Is your wife still worried about what to say that you do? Is she more tempted to consider ER herself? What did you end up working out about the housework?
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Yes, DoubleDown, it's been more than a few months since you retired. Can you bring us up to date on how it's been? Any particularly difficult or spectacularly enjoyable adjustments, for you or your family?
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So you took the leap and retired...how's it going? Is your wife still worried about what to say that you do? Is she more tempted to consider ER herself? What did you end up working out about the housework?
Yes, DoubleDown, it's been more than a few months since you retired. Can you bring us up to date on how it's been? Any particularly difficult or spectacularly enjoyable adjustments, for you or your family?
First of all, thanks for asking! FIRE has been awesome, I seriously cannot think of a single downside so far. The only part that still gnaws at me is the large paychecks no longer coming in. It's definitely weird going from a 20-year mindset of saving to one of spending with no more accumulation. Thankfully there have been no market crashes or black swan events since I FIRE'd; the markets have been very boring overall, which is okay with me.
I'd say my wife's overall attitude has not changed much. I've picked up more of the housework and some cooking, haven't heard too many complaints on that front (other than I'm not much of a gourmet cook and have no interest in becoming one).
My wife just is, by her nature, extremely skeptical in life. If she won the lottery or some other amazing windfall, she'd immediately be waiting for calamity or the (unknown) "strings attached" to destroy everything. It's really almost impossible for her to accept something good as just that -- she'll always think that life is playing a cruel joke on her and setting her up for a bigger fall right around the corner. I'd say that mindset is pretty antithetical to FIRE, since we have to take a fairly large leap of faith into this unorthodox approach of quitting work so early and putting faith in our stash lasting 50+ years. So, I'd say it's unlikely she will ever accept this decision or lifestyle as anything she'd seek out on her own.
She's also a heavy on-the-go person, always wants to be doing something active. She just can't fathom having any large stretch of unstructured time, so she's still in the mindset of wondering what I could possibly do with all this free time. This does still give her angst in telling people what I "do." I suggested she tell them I'm writing a book (true), but even this seemed weird to her because I'm not Stephen King.
I asked her, isn't writing a book "enough" of a thing? I mean there are lots of writers, people don't generally look down on them. She said, "Yeah, but they make lots of money at it." I said, does that mean I would be unsuccessful as a writer if I didn't make a lot of money, even though we don't need the money? She said yes. I said, "Then what does define success as a writer. Do I have to make the NY Times Top 20 Bestsellers List to qualify as successful? She said "Yes." I said, "And anything less than the Top 20 is unsuccessful?" Again the answer was "Yes."
Tough crowd.
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I asked her, isn't writing a book "enough" of a thing? I mean there are lots of writers, people don't generally look down on them. She said, "Yeah, but they make lots of money at it." I said, does that mean I would be unsuccessful as a writer if I didn't make a lot of money, even though we don't need the money? She said yes. I said, "Then what does define success as a writer. Do I have to make the NY Times Top 20 Bestsellers List to qualify as successful? She said "Yes." I said, "And anything less than the Top 20 is unsuccessful?" Again the answer was "Yes."
Tough crowd.
Damn. This reminds me of the Mexican fisherman parable (http://financialmentor.com/true-wealth/the-parable-of-the-mexican-fisherman-and-investment-banker/2422). It makes me want to ask "and then what?" over and over.
Glad to hear you're enjoying your retirement, despite your lack of "success".
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I asked her, isn't writing a book "enough" of a thing? I mean there are lots of writers, people don't generally look down on them. She said, "Yeah, but they make lots of money at it." I said, does that mean I would be unsuccessful as a writer if I didn't make a lot of money, even though we don't need the money? She said yes. I said, "Then what does define success as a writer. Do I have to make the NY Times Top 20 Bestsellers List to qualify as successful? She said "Yes." I said, "And anything less than the Top 20 is unsuccessful?" Again the answer was "Yes."
Tough crowd.
Damn. This reminds me of the Mexican fisherman parable (http://financialmentor.com/true-wealth/the-parable-of-the-mexican-fisherman-and-investment-banker/2422). It makes me want to ask "and then what?" over and over.
Glad to hear you're enjoying your retirement, despite your lack of "success".
Ha, thanks. And that is a great comparison to the Mexican fisherman. I've tried understanding my wife's views on this (the definition of "success") and similar quandaries, but mostly without success. But then, she is a woman, and I'm a Spock-like robot.
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Ha ha, definitely a tough crowd. At least you don't let her negativity and high demands for your legitimacy slow you down too much. Good for you for taking on the book writing. Fiction or non? (Writing will be my primary activity when I'm ready to RE.) Do you have the support of a local writing group or some such? That can be a big help, as however "Spock-like" you are, writing can be a fairly isolating as well as demanding process. I'm really happy that you've found your ER such an overwhelmingly positive development... your experience gives me confidence that we can know ourselves well enough to make the best moves for ourselves, even when what's positive for us is seemingly unsupported by the culture at large. If you feel at all better knowing that at least one person is immensely jealous of your situation, you should feel great because I am! Thanks for the update.
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Not to get too psychological here, but I think I have an idea of why your wife is feeling this way.
The whole "what can I tell other members of society you do" is part of a much larger philosophical question. When you stop working, its almost like you stop participating in society, economically speaking. Your role in society has fundamentally changed. You no longer spend your days serving some members of society to everyones' mutual benefit. Not to mention the fact that you made a nice income - that signals that you are man among men, a very talented individual of great worth to society.
And, since you're clearly a very capable person, you're capable of doing something that is VERY appreciated by other members in your community. Volunteering might leave something to be desired if you weren't able to use your talent - who knows if you'll be as "successful" with writing as you were in your career - but your wife still wants to see you as the great man she married, and my opinion is that all women to a certain degree are influenced by society in how they value men. That's why GQ always shows men in suits - you think any actors/athletes ever need to wear suits?? They can wear sweatpants all day if they want. GQ dresses them up in suits because people tend to think of a man in a suit as important and valuable, and consequently more desirable to the opposite sex.
By all means you should explore your interests. Hopefully you end up super talented in one of them!
It's funny, Napoleon Dynamite was right on when he said that women are looking for a guy with skills.
Enjoy your journey and thanks for the inspiration.
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I asked her, isn't writing a book "enough" of a thing? I mean there are lots of writers, people don't generally look down on them. She said, "Yeah, but they make lots of money at it." I said, does that mean I would be unsuccessful as a writer if I didn't make a lot of money, even though we don't need the money? She said yes. I said, "Then what does define success as a writer. Do I have to make the NY Times Top 20 Bestsellers List to qualify as successful? She said "Yes." I said, "And anything less than the Top 20 is unsuccessful?" Again the answer was "Yes."
Tough crowd.
Damn! Tough crowd indeed. Somehow though, I think you'll manage through it just fine!
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This is a great thread. I'm 41, and could easily FIRE right now and not have to work thanks to recent inheritance. One of my biggest stumbling blocks is how my parents would react. I work in the medical field so I couldn't say I was just working from home. I guess I need to get more comfortable with the fact that I'll just have to own up to it and tell people my plans for an early retirement.
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This is a great thread. I'm 41, and could easily FIRE right now and not have to work thanks to recent inheritance. One of my biggest stumbling blocks is how my parents would react. I work in the medical field so I couldn't say I was just working from home. I guess I need to get more comfortable with the fact that I'll just have to own up to it and tell people my plans for an early retirement.
Just say you got burnt out (not too much of a stretch in the medical field I'm sure), and are taking a break living off savings until you have to go back. Eventually they'll start asking 'isn't it time to go back to work?' and you can keep stringing them along 'yea I will probably have to soon but right now I'm having too much fun doing X and Y'.