Author Topic: Retire or Rich  (Read 7244 times)

Buck

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Re: Retire or Rich
« Reply #50 on: January 05, 2018, 07:19:51 AM »
Recently did that math as well. Could FIRE in less than 10 years, but the wife and I are young and don't have kids yet so that could eventually keep us in one place for 18+ years with traditional schooling. Eventually starting/running a business sounds like a path we will likely explore instead of working for others for X number of years. We have very expensive hobbies (boating, offshore fishing, scuba, wine/scotch, and travel to foreign countries) and the idea of retiring early just to sit around and twiddle thumbs, bike everywhere, eat beans and live like a penny pincher sounds mediocre, regardless of all the extra "freedom" we could enjoy.  If you're doing life right, you're having so much fun on the weekends that a few days of work in between isn't bad. So I'm now leaning towards the crew that thinks working 5-10 more years to not have to worry about expenses and keep living the lifestyle you currently enjoy (or a better lifestyle) would be worth it. We all have one shot a life, so make yours the best you can imagine.

Malkynn

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Re: Retire or Rich
« Reply #51 on: January 05, 2018, 07:54:36 AM »
I wonder if a healthy respect for (or preoccupation with?) one's own mortality is a unifying characteristic of MMM types.  Though I didn't have any significant loss early in my life, I've always felt I was more acutely aware of my mortality than others. Like, I'm very aware that I could be hit by a bus at any time.  Or have a heart attack. Or get cancer.

Rather than being depressed, I've found this feeling makes me braver.  I'm already risking death everyday by just being a person walking around, so doing "scary" things isn't really all that scary.  If it goes wrong, I'll be just as dead as if I were hit by that bus.

To me, MMM is really about using your resources in a way that allows you to maximize meaning in your life.  Once you've hit FI, material needs are satisfied, so you can keep climbing Maslow's hierarchy.  And you get to decide what adds meaning to your life--your paying job, your family, your passion projects, a combination thereof.  Not to get schmaltzy about it, but it's kind of profound.  We're talking about the meaning of life, guys--crazy!

I do feel sorry for people who are stuck in cyclical poverty and have a very steep climb to get out.  I'm also feel somewhat sorry for and am very confused by people who have plenty of resources but think they could never consider retiring.  Or people who mindlessly spend their resources on things that don't really give them meaning and, in fact, actively prevent them from ever finding meaning.  The unexamined life, I guess.

PS--Thanks for the kudos on my last post.  :)

Hmm, an acute awareness of mortality is actually what made me stop caring about FIRE and be unwilling to wait until I had some arbitrary amount of money saved before I could start living my best life. I don’t think it takes reaching FI to have material needs met, I think that’s overkill.

Yes, debt is an emergency and needs to be dealt with urgently, but reaching FI is not urgent or necessary to start living each day to the fullest. Plenty of people start living their best lives when they have no wealth and manage just fine financially. Living life to its fullest can be shockingly profitable.

DH and I both got sucked into the living for FI kind of thinking. I was burning out at a very high paying very demanding job and he was burning out working his demanding full time job, but also carrying all of the housework responsibilities because his job wasn’t nearly as punishing as mine.
But we “knew” the early retirement was “worth it”.

LOL, then we both got diagnosed with cancer.
I’m not even kidding.

We had been married for less than a year, and we both had skin cancer that was found because we had really thorough medical examinations for insurance policies that we wanted to invest in.
Mine was no big deal, his was the deadliest form of melanoma. Had it been left another year, he wouldn’t have survived. It looked like nothing. Even his doctor wasn’t concerned about it, he was sent to the dermatologist to have a different mole checked.

We would have been married for only a few years at most, and those years would have consisted of us both working way too hard and then him dying horribly of cancer. We were living for a future that we wouldn’t have had.

Mortality makes us live for now.
Not for more years of retirement, for now.
Surprisingly, two years later, major career downshifts, and we’re both actually more successful in our careers now than we were when we were hitting them full tilt.

Backing off our careers, focusing on each other, and our happiness actually made us much more selective about where we put our energy, which meant that we have a lot more time and energy to explore opportunities and are much more judicious about what opportunities we choose to put our energy into. This means that we’re more often in the right place at the right time meeting the right people and getting the right opportunities.

I have stumbled face first into more brilliant opportunities in the past 2 years than I ever could have created by working harder my job. And our marriage is a lot of fun now. We’re both a lot more interesting to talk to, whereas before it was more like we would each take our turn at the end of the day to vent about our jobs while the other vaguely listened.

So yeah, mortality is a huge factor in our life choices. 





MrMoneyMullet

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Re: Retire or Rich
« Reply #52 on: January 05, 2018, 08:58:29 AM »

Yes, debt is an emergency and needs to be dealt with urgently, but reaching FI is not urgent or necessary to start living each day to the fullest. Plenty of people start living their best lives when they have no wealth and manage just fine financially. Living life to its fullest can be shockingly profitable.

DH and I both got sucked into the living for FI kind of thinking. I was burning out at a very high paying very demanding job and he was burning out working his demanding full time job, but also carrying all of the housework responsibilities because his job wasn’t nearly as punishing as mine.
But we “knew” the early retirement was “worth it”.

LOL, then we both got diagnosed with cancer.
I’m not even kidding.


Wow Malkynn, thanks for sharing. Did you downshift by quitting and 'detoxing' from work for a while? Or did you both find lower-stress FT jobs? Or both find PT jobs or start your own thing?
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Aelias

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Re: Retire or Rich
« Reply #53 on: January 05, 2018, 09:21:35 AM »
Damn, Malkynn.  Incredible story. Glad you and your husband are doing well now.  Thanks for sharing.

I think a lot this comes down to: is your current situation satisfying? If it's deeply unsatisfying, then by all means, GTFO and FIRE as soon as possible. Or find a new paying job. Or do whatever you can to make the current situation better.

If your current job is completely satisfying and you love it with your entire being, then by all means, work until you die.

But for myself (and it seems a lot of folks on this board), the current situation is mostly satisfying, which is why I'd even consider working longer, though I don't see myself working past 50 in any event.  But there's still a little itch, a little restlessness.  I imagine that will grow over time.

I believe my current job is probably the last "job" job I'll ever have because it's damn near perfect.  But it's still a job.  When it becomes unsatisfying, I'll need to find something totally different to do.


Jrr85

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Re: Retire or Rich
« Reply #54 on: January 05, 2018, 09:23:57 AM »

Kids are the driver for sure.  If I didn't have kids, I certainly could have retired earlier and not relied on my military pension.  My goal is to get the kids out of college with zero debt hanging over their heads. 

I have used Coverdell accounts (better than 529s for my specific situation) since they were each born, contributed the max each year, and plan to use my GI bill for their education (I'm done going to college).  The oldest will likely start in '21, and right now there is enough to cover 3.3 years of her school.

I'm always shocked at the lack of discussion of setting up kids on this forum.  It's probably more healthy to not feel like you have to set your kids up. I don't know why I feel compelled to provide my kids more than my parents provided me, but there's a decent chance when I get to the FI part, I will keep working until "normal" retirement age to maximize what I can do for them, either help while I'm still living or as an inheritance.  The only semi-rational justification is that I want them to have the option to devote much more time to their children than we were able to devote to them, and since we will not be FI before that window where they are jumping up and down excited when we get home, it makes sense for us to try to help them be FI in time for that with their children. 

All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that. 

Retire-Canada

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Re: Retire or Rich
« Reply #55 on: January 05, 2018, 09:33:36 AM »
All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that.

Most people retiring with a 4%WR will see their portfolios grow based on historical data and they'll be able to leave their kids a fine inheritance if they want to. Aside from that I think there are many ways to help kids get a solid start on life that don't involve writing them fat cheques. Of the kids I know personally the ones that get everything handed to them are in far poorer shape as people than the ones that have to work for their money. So personally I don't think firing money at kids is actually helpful as a general rule.

Malkynn

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Re: Retire or Rich
« Reply #56 on: January 05, 2018, 09:40:53 AM »

Yes, debt is an emergency and needs to be dealt with urgently, but reaching FI is not urgent or necessary to start living each day to the fullest. Plenty of people start living their best lives when they have no wealth and manage just fine financially. Living life to its fullest can be shockingly profitable.

DH and I both got sucked into the living for FI kind of thinking. I was burning out at a very high paying very demanding job and he was burning out working his demanding full time job, but also carrying all of the housework responsibilities because his job wasn’t nearly as punishing as mine.
But we “knew” the early retirement was “worth it”.

LOL, then we both got diagnosed with cancer.
I’m not even kidding.


Wow Malkynn, thanks for sharing. Did you downshift by quitting and 'detoxing' from work for a while? Or did you both find lower-stress FT jobs? Or both find PT jobs or start your own thing?

DH is very happy in his job, he was just burnt out on managing everything at home.
I quit my job and took a less stressful job working half the hours. However, it’s actually turned out to be a step up in my career as I’m doing a much higher quality of work and rapidly gaining a reputation for it. I couldn’t do that at my last job because in my industry higher quality work actually hurts the bottom line.
I’ve also taken on a pile of fun projects, which will likely result in being more profitable than even my original day job because they’re actually scalable.

Now that I have more time off, I’m managing most of the house stuff and I’m far more efficient and effective at it, plus I enjoy it. DH just focuses on work and fitness, so he’s super mellow now.

boarder42

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Re: Retire or Rich
« Reply #57 on: January 05, 2018, 09:56:29 AM »
Rich! But that needs defining for this thread.
I am comfortable with the 4% rule.
I would not feel comfortable retiring with an income of $25,000.
I would not feel comfortable retiring with an income of $40,000.
 When I'm up around $50,000 plus that seems like a resonable income
to live on. That number also puts you in the middle of US household
income. 50% of households make more 50% make less.
 I think we all would agree $50,000 of yearly income does not
make you rich, but not having to work for the $50,000 does.
That may be the median US household income, but the median household is presumably having to pay rent/mortgage and save for retirement out of that.  If you have that income without those big ticket costs you are going to look pretty rich to a very large percentage of the population.

a smart mustachian would keep their mortgage - but not include it in the 4% calc. 

on the topic of retire or rich -

I think this is very personal and it will likely change as you get closer to FIRE.  1 more year for me is equal to over 12k a year in spending then 1 more year  is 13k more making it 25k then if i decide to stick it out til 40 it would add over 50% to our retirment allowable spending for 3 short years.  then where do you stop if we work 3 more years we could spend over 110% more than our current spending levels.  and none of this really accounts for the effects of inflation on our current mortgage payment over these years.  which will increase further discresionary spending.

add to that the fact that its likely you'll die stupid rich anyways sticking cold turkey to the 50% SWR.  most here are going to be very wealthy regardless of if they quit when they hit 25x or work a couple extra years. 

To @Retire-Canada 's point above - once you get past 50 your chances of death increase so much i think OMY is a very risky business for those of us yunguns shooting for 30s or 40s the risk is much lower and could allow for increased charitable contributions etc. in FIRE

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Jrr85

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Re: Retire or Rich
« Reply #58 on: January 05, 2018, 10:00:23 AM »
Most people retiring with a 4%WR will see their portfolios grow based on historical data and they'll be able to leave their kids a fine inheritance if they want to. Aside from that I think there are many ways to help kids get a solid start on life that don't involve writing them fat cheques. Of the kids I know personally the ones that get everything handed to them are in far poorer shape as people than the ones that have to work for their money. So personally I don't think firing money at kids is actually helpful as a general rule.

I used to more or less believe this, but now that I have a little more awareness as to how many people receive help (because of some of my work), I realize that's not true at all.  Yes, the kids that have everything given to them and more importantly, are shielded from all consequences of their actions, tend to have   bad results.  But those are the exceptions; everybody is just aware of them because they tend to be visible and memorable.  Lots more people from affluent family get help on things from down payments, daycare/private school tuition for kids, or even just bringing the kids and grandkids on vacation that simply reduce stress and/or free the kids up to be less worried about income when planning their career without any noticeable negative effects. 

Also, while people retiring with a 4% withdrawal rate will likely eventually leave their children a decent inheritance, barring an untimely death of both my spouse and me, any inheritance will be more for potential grandkids than for our children, as our children should likely be close to if not at financial independence by the time we both pass away.  Again, there's nothing wrong with that and feeling that I should do more for them and it would be somewhat selfish for me to stop earning in my prime years so I can "quit" is probably less healthy than feeling like they are grownups and are on their own financially barring extraordinary circumstances.  But nonetheless, even though I intellectually realize that, emotionally I still find it a little off. 

boarder42

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Re: Retire or Rich
« Reply #59 on: January 05, 2018, 10:04:24 AM »
Most people retiring with a 4%WR will see their portfolios grow based on historical data and they'll be able to leave their kids a fine inheritance if they want to. Aside from that I think there are many ways to help kids get a solid start on life that don't involve writing them fat cheques. Of the kids I know personally the ones that get everything handed to them are in far poorer shape as people than the ones that have to work for their money. So personally I don't think firing money at kids is actually helpful as a general rule.

I used to more or less believe this, but now that I have a little more awareness as to how many people receive help (because of some of my work), I realize that's not true at all.  Yes, the kids that have everything given to them and more importantly, are shielded from all consequences of their actions, tend to have   bad results.  But those are the exceptions; everybody is just aware of them because they tend to be visible and memorable.  Lots more people from affluent family get help on things from down payments, daycare/private school tuition for kids, or even just bringing the kids and grandkids on vacation that simply reduce stress and/or free the kids up to be less worried about income when planning their career without any noticeable negative effects. 

Also, while people retiring with a 4% withdrawal rate will likely eventually leave their children a decent inheritance, barring an untimely death of both my spouse and me, any inheritance will be more for potential grandkids than for our children, as our children should likely be close to if not at financial independence by the time we both pass away.  Again, there's nothing wrong with that and feeling that I should do more for them and it would be somewhat selfish for me to stop earning in my prime years so I can "quit" is probably less healthy than feeling like they are grownups and are on their own financially barring extraordinary circumstances.  But nonetheless, even though I intellectually realize that, emotionally I still find it a little off.

you can gift your kids money -  my parents gift us money now vs leaving us a lump sum at death.  they'd prefer they see us enjoy it - which in our case is buying more VTSAX which my frugal parents like.  my brother doesnt have near the income so they are able to help him with his downpayment and then he is slowly increasing his retirment stach as well. 
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Jrr85

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Re: Retire or Rich
« Reply #60 on: January 05, 2018, 10:05:06 AM »

a smart mustachian would keep their mortgage - but not include it in the 4% calc. 


Somewhat of a hijack, but I think I've been convinced by "Big Ern" at EarlyRetirementNow that keeping the mortgage during retirement is a mistake and the equity glidepath is the right way to approach the initial years of retirement.  I guess the younger you retire and the easier it would be to go back to work in 5-10 years, the less it matters, but if you are in a career where you probably can't just hop back in in 10 years and your annual spend is such that you can't cover it with a relatively middling paying job, waiting until you can manage an equity glidepath is the better approach.   

hoping2retire35

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Re: Retire or Rich
« Reply #61 on: January 05, 2018, 10:07:50 AM »
My three issues are;

1. Kid schedules. However even if I work a few extra years it still wouldn't be beyond their college years.

2. Pension. I am in the state system so when I am FI I can work 8-10 more years and pay into a 'early' retirement program and get a pension worth(using 4%, annual pension X 25=) over $1mil roughly when kids are done with college or can cash out at FI for ~$100k. Chump change. ugh...decisions.

3. Philanthropy. Helping family and others nearby, I don't think I really will ever be so rich to make a difference in another country. Beyond family I might do something along the lines of foster care or something to help others, which it would be nice if there was extra money in the bank for that. If I can get by and be FIRE'd I would really feel like I could have done more, I think I would just feel too guilty if I retired early without some other part of life, other than being in the woods, telling me it is time to quit.

boarder42

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Re: Retire or Rich
« Reply #62 on: January 05, 2018, 10:09:11 AM »

a smart mustachian would keep their mortgage - but not include it in the 4% calc. 


Somewhat of a hijack, but I think I've been convinced by "Big Ern" at EarlyRetirementNow that keeping the mortgage during retirement is a mistake and the equity glidepath is the right way to approach the initial years of retirement.  I guess the younger you retire and the easier it would be to go back to work in 5-10 years, the less it matters, but if you are in a career where you probably can't just hop back in in 10 years and your annual spend is such that you can't cover it with a relatively middling paying job, waiting until you can manage an equity glidepath is the better approach.

most have fluff in their budget and variable with drawal if you can cut around 5-10k or earn 5-10k extra early on your money will histrically last forever as well - and you'll likely get there at a similar time to the person who chose to pay of a mortgage and do an equity glide path.
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boarder42

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Re: Retire or Rich
« Reply #63 on: January 05, 2018, 10:13:07 AM »
My three issues are;

1. Kid schedules. However even if I work a few extra years it still wouldn't be beyond their college years.

2. Pension. I am in the state system so when I am FI I can work 8-10 more years and pay into a 'early' retirement program and get a pension worth(using 4%, annual pension X 25=) over $1mil roughly when kids are done with college or can cash out at FI for ~$100k. Chump change. ugh...decisions.

3. Philanthropy. Helping family and others nearby, I don't think I really will ever be so rich to make a difference in another country. Beyond family I might do something along the lines of foster care or something to help others, which it would be nice if there was extra money in the bank for that. If I can get by and be FIRE'd I would really feel like I could have done more, I think I would just feel too guilty if I retired early without some other part of life, other than being in the woods, telling me it is time to quit.

3 is my biggest thing.  i was given a gift of growing up in an upper middle class white american family and being born a male.  you cant beat much of that.  then i was given the gift of a high IQ and having frugal parents who let me start trading stocks at 10(took me 17 years to learn that lesson but much better then than 17 years after i graduate college) - so to throw away a high 100k paycheck b/c i'm done vs working to give back to those who need it will likely be my biggest struggle come 5-6 years from now.
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Retire-Canada

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Re: Retire or Rich
« Reply #64 on: January 05, 2018, 10:25:43 AM »
I used to more or less believe this, but now that I have a little more awareness as to how many people receive help (because of some of my work), I realize that's not true at all. 

I'm basing my opinion on the kids I know well enough to understand how much help their parents are giving them financially. And I am not saying giving your kids any help ever is a bad thing. You can do the later without working extra and amassing extra millions.

Retire-Canada

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Re: Retire or Rich
« Reply #65 on: January 05, 2018, 10:28:22 AM »
Here's the thing...everybody has been programmed by society to work and make money their whole lives. I think people vastly underestimate the power of this programming and how hard it is to break free. I suspect that most of the OMYing that's going on is not done for the state reasons [ie. kids, charity, etc...]. It's done because it provides a handy excuse to keep working and follow the decades of programming you've been force fed.

Jrr85

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Re: Retire or Rich
« Reply #66 on: January 05, 2018, 10:53:41 AM »

Also, while people retiring with a 4% withdrawal rate will likely eventually leave their children a decent inheritance, barring an untimely death of both my spouse and me, any inheritance will be more for potential grandkids than for our children, as our children should likely be close to if not at financial independence by the time we both pass away.  Again, there's nothing wrong with that and feeling that I should do more for them and it would be somewhat selfish for me to stop earning in my prime years so I can "quit" is probably less healthy than feeling like they are grownups and are on their own financially barring extraordinary circumstances.  But nonetheless, even though I intellectually realize that, emotionally I still find it a little off.

you can gift your kids money -  my parents gift us money now vs leaving us a lump sum at death.  they'd prefer they see us enjoy it - which in our case is buying more VTSAX which my frugal parents like.  my brother doesnt have near the income so they are able to help him with his downpayment and then he is slowly increasing his retirment stach as well.

I get that, but if I retire at the 4%, and sequence of returns aren't kind to me, I won't be able to meaningfully help my kids without risking running out of money and burdening them later on. 





Retire-Canada

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Re: Retire or Rich
« Reply #67 on: January 05, 2018, 10:57:41 AM »
I get that, but if I retire at the 4%, and sequence of returns aren't kind to me, I won't be able to meaningfully help my kids without risking running out of money and burdening them later on.

If you have to chase down every small risk in life you better just keep working because the "what ifs?" are literally endless.

Lan Mandragoran

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Re: Retire or Rich
« Reply #68 on: January 05, 2018, 11:06:40 AM »
Meh, no need to be "rich" by most peoples definitions (idk, in the midwest that would probably be like spending 100k+ or something)

Just want to be able to travel a bit, ride a bunch of mountain bikes, ski, etc. All relatively inexpensive things in the grand scheme. So I'll hit my Bare Bones fire # and then work enough that we dont have to stress about 3-5k extra a year.

The weird thing about all of this, is at the end OMY syndrome is probably really easy to fall to, at the start of all of this your pulling yourself up a small fraction of what you are at the end of your fire journey, so its probably pretty tempting to just keep throwing 100k+ a year in because of how easy it is to grow your networth. Hard to quit when every single month changes your life style noticeably.
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Jrr85

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Re: Retire or Rich
« Reply #69 on: January 05, 2018, 11:10:00 AM »
Here's the thing...everybody has been programmed by society to work and make money their whole lives. I think people vastly underestimate the power of this programming and how hard it is to break free. I suspect that most of the OMYing that's going on is not done for the state reasons [ie. kids, charity, etc...]. It's done because it provides a handy excuse to keep working and follow the decades of programming you've been force fed.

I kind of doubt that for most people, unless you are referring to being programmed to want to consume more and more.  Judging by how little most people I see care for their jobs, I don't think they'd be scared to quit if they really believed they had enough money and/or knew they could be happy without ever increasing consumption. 


Jrr85

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Re: Retire or Rich
« Reply #70 on: January 05, 2018, 11:13:11 AM »
I get that, but if I retire at the 4%, and sequence of returns aren't kind to me, I won't be able to meaningfully help my kids without risking running out of money and burdening them later on.

If you have to chase down every small risk in life you better just keep working because the "what ifs?" are literally endless.

That's not a "small" risk if you are talking about likelihood and magnitude (the risk of giving and then running out of money; not the risk of not being able to give your kids money). 




Retire-Canada

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Re: Retire or Rich
« Reply #71 on: January 05, 2018, 11:14:21 AM »
I kind of doubt that for most people, unless you are referring to being programmed to want to consume more and more.  Judging by how little most people I see care for their jobs, I don't think they'd be scared to quit if they really believed they had enough money and/or knew they could be happy without ever increasing consumption.

Just look at all the OMYing going on in this forum with people that are sitting on shit tons of money. I think you are underestimating how powerful decades of societal programming are. You aren't being programmed to love your job. You are being programmed to keep working for [insert convenient excuse here]. You are also being programmed to consume, but in theory you can quite working with a fat stash and still consume a lot.

Lan Mandragoran

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Re: Retire or Rich
« Reply #72 on: January 05, 2018, 11:17:58 AM »
Recently did that math as well. Could FIRE in less than 10 years, but the wife and I are young and don't have kids yet so that could eventually keep us in one place for 18+ years with traditional schooling. Eventually starting/running a business sounds like a path we will likely explore instead of working for others for X number of years. We have very expensive hobbies (boating, offshore fishing, scuba, wine/scotch, and travel to foreign countries) and the idea of retiring early just to sit around and twiddle thumbs, bike everywhere, eat beans and live like a penny pincher sounds mediocre, regardless of all the extra "freedom" we could enjoy.  If you're doing life right, you're having so much fun on the weekends that a few days of work in between isn't bad. So I'm now leaning towards the crew that thinks working 5-10 more years to not have to worry about expenses and keep living the lifestyle you currently enjoy (or a better lifestyle) would be worth it. We all have one shot a life, so make yours the best you can imagine.

Guess I'm doing life wrong then :P. More like the opposite for myself. Having so much "fun" that 2 days doesn't even seem noticeable next to 5 days of worrying about problems that dont really matter to me.  Thats overstated maybe, I don't hate my job... however I (and I suspect many others here) dont like it near as much as I enjoy working on my own projects or hanging out with my own friends/family =].
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boarder42

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Re: Retire or Rich
« Reply #73 on: January 05, 2018, 11:23:11 AM »
Recently did that math as well. Could FIRE in less than 10 years, but the wife and I are young and don't have kids yet so that could eventually keep us in one place for 18+ years with traditional schooling. Eventually starting/running a business sounds like a path we will likely explore instead of working for others for X number of years. We have very expensive hobbies (boating, offshore fishing, scuba, wine/scotch, and travel to foreign countries) and the idea of retiring early just to sit around and twiddle thumbs, bike everywhere, eat beans and live like a penny pincher sounds mediocre, regardless of all the extra "freedom" we could enjoy.  If you're doing life right, you're having so much fun on the weekends that a few days of work in between isn't bad. So I'm now leaning towards the crew that thinks working 5-10 more years to not have to worry about expenses and keep living the lifestyle you currently enjoy (or a better lifestyle) would be worth it. We all have one shot a life, so make yours the best you can imagine.

i lead this lifestyle you speak of and will still be done in around 10-12 years of working not 18+ years.
 
we own a boat - live on a lake and wakeboard/surf 3-4 times a week for 7 months of the year
we go scuba diving - dont live near an ocean so its not often
we drink wine and bourbon and craft beer - can be done affordably
we travel the world - (travel hacking you get huge bang for you buck)

you dont have to live like a miser to quit working - this is a poor attitude in my opinion.  Optimize your spending for what you dont enjoy then optimize it for what you enjoy and that dollar can go way farther.
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Re: Retire or Rich
« Reply #74 on: January 05, 2018, 01:05:49 PM »

Kids are the driver for sure.  If I didn't have kids, I certainly could have retired earlier and not relied on my military pension.  My goal is to get the kids out of college with zero debt hanging over their heads. 

I have used Coverdell accounts (better than 529s for my specific situation) since they were each born, contributed the max each year, and plan to use my GI bill for their education (I'm done going to college).  The oldest will likely start in '21, and right now there is enough to cover 3.3 years of her school.

I'm always shocked at the lack of discussion of setting up kids on this forum.  It's probably more healthy to not feel like you have to set your kids up. I don't know why I feel compelled to provide my kids more than my parents provided me, but there's a decent chance when I get to the FI part, I will keep working until "normal" retirement age to maximize what I can do for them, either help while I'm still living or as an inheritance.  The only semi-rational justification is that I want them to have the option to devote much more time to their children than we were able to devote to them, and since we will not be FI before that window where they are jumping up and down excited when we get home, it makes sense for us to try to help them be FI in time for that with their children. 

All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that.
Mini mustache is the place to discuss this. However, lots of thought has been put into this by many people. I've spent a massive amount of time setting up education funds and determining withdrawal strategies from those funds. You don't see it unless you look for it on the forum, unless you have kids you wouldn't have seen any evidence at all (self selection, people without kids tend to avoid boring conversations about university education plans).

Everyone's situation is different, we all fit on a continuum but you've only addressed the 2 extremes and not the middle part. You can add many more scenarios in between full FIRE and full working, I started with the basics.
1) some will go full FIRE with their kids - ARS, MMM
2) Some will have a SAHP and delay FIRE.
3) Some will reduce working hours, delay FIRE, and spend more time with kids. - We're currently here on the continuum, wife at 60% by choice.
4) Some will work - the majority

boarder42

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Re: Retire or Rich
« Reply #75 on: January 05, 2018, 01:50:32 PM »

Kids are the driver for sure.  If I didn't have kids, I certainly could have retired earlier and not relied on my military pension.  My goal is to get the kids out of college with zero debt hanging over their heads. 

I have used Coverdell accounts (better than 529s for my specific situation) since they were each born, contributed the max each year, and plan to use my GI bill for their education (I'm done going to college).  The oldest will likely start in '21, and right now there is enough to cover 3.3 years of her school.

I'm always shocked at the lack of discussion of setting up kids on this forum.  It's probably more healthy to not feel like you have to set your kids up. I don't know why I feel compelled to provide my kids more than my parents provided me, but there's a decent chance when I get to the FI part, I will keep working until "normal" retirement age to maximize what I can do for them, either help while I'm still living or as an inheritance.  The only semi-rational justification is that I want them to have the option to devote much more time to their children than we were able to devote to them, and since we will not be FI before that window where they are jumping up and down excited when we get home, it makes sense for us to try to help them be FI in time for that with their children. 

All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that.
Mini mustache is the place to discuss this. However, lots of thought has been put into this by many people. I've spent a massive amount of time setting up education funds and determining withdrawal strategies from those funds. You don't see it unless you look for it on the forum, unless you have kids you wouldn't have seen any evidence at all (self selection, people without kids tend to avoid boring conversations about university education plans).

Everyone's situation is different, we all fit on a continuum but you've only addressed the 2 extremes and not the middle part. You can add many more scenarios in between full FIRE and full working, I started with the basics.
1) some will go full FIRE with their kids - ARS, MMM
2) Some will have a SAHP and delay FIRE.
3) Some will reduce working hours, delay FIRE, and spend more time with kids. - We're currently here on the continuum, wife at 60% by choice.
4) Some will work - the majority

i dont think a majority will work the entirity of their childs home life.  i think a majority will be at full fire sometime in the life of their kids with a mix between the 2. 

People later in their life and with older children have to do much more planning around education.  Also i tend to see people who had to pay for their education lean towards paying for their childs education.  for those doing what i'll call 5

5) Work til FIRE then retire before the kids hit double digit ages - the likelihood is that by the time the kids are in college you'll have more money if you wanted to pay for it than otherwise. 

Retiring greater than 10 years before college hits for your kids greatly changes the need for specialty savings for college - if its even necessary at all- i personally believe the future will dynamically be different on a college front than we have now - technology will change how we learn, it already has and it will continue to. 

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Re: Retire or Rich
« Reply #76 on: January 05, 2018, 02:00:32 PM »
I kind of doubt that for most people, unless you are referring to being programmed to want to consume more and more.  Judging by how little most people I see care for their jobs, I don't think they'd be scared to quit if they really believed they had enough money and/or knew they could be happy without ever increasing consumption.

Just look at all the OMYing going on in this forum with people that are sitting on shit tons of money. I think you are underestimating how powerful decades of societal programming are. You aren't being programmed to love your job. You are being programmed to keep working for [insert convenient excuse here]. You are also being programmed to consume, but in theory you can quite working with a fat stash and still consume a lot.

I'm pretty sure I'm moving my OMY out to at least 2MY.  Maybe longer. 
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Bateaux

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Re: Retire or Rich
« Reply #77 on: January 05, 2018, 02:16:04 PM »
I talked to the retirement guru of New Orleans last night on his radio show.  Told him all my numbers and asked about the 4% rule.  Told him we could pool 2MM in investments and have zero debts. Currently 49 and want to retire at 50 in 2019.  He said he could recommend 3.5 to 4% if over 60, but not at 50.  He said we do not want to go more than 3%.  He did say with favorable portfolio appreciation I could slowly move towards 4% spending by social security age.  He said not to look at social security as a boost in income but as an offset to higher medical costs when reaching that age.  It was free advice and they didn't even try to sell me on having them manage my wealth.  So I guess the advice is worth what I paid for it.   Which was nothing.
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tooqk4u22

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Re: Retire or Rich
« Reply #78 on: January 05, 2018, 02:24:30 PM »
All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that.

Most people retiring with a 4%WR will see their portfolios grow based on historical data and they'll be able to leave their kids a fine inheritance if they want to. Aside from that I think there are many ways to help kids get a solid start on life that don't involve writing them fat cheques. Of the kids I know personally the ones that get everything handed to them are in far poorer shape as people than the ones that have to work for their money. So personally I don't think firing money at kids is actually helpful as a general rule.

I agree with that sentiment and have seen similar things as your anecdote (not fact) but more often in the professional world (not that that's for everyone) there tends to be more people that had these advantages and I think that allows them to focus on work, connections, networking, etc.  Also, there is a difference between providing advantages and "writing them fat cheques."  MMM had school paid for, that is a an advantage, had he not he might not have been able to move to the states or might have been stressed more about money distracting him from doing good work or turning to partying more for outlets.  The opposite is true of course as well. 

But when I was younger and had student debts, needed to get a car, or came up with a down payment I can tell you it did distract at times compared to others that didn't have those worries/needs. Might have been nice to not have to work through college, but a lot of things might have been nice. 
 Plus not having those to worry about things allows to take risks or maybe jobs you wouldn't otherwise. I got my first "career" job simply because I needed money and had bills to pay.

I have mixed feelings about all of this because all of my history as led me to who and where I am - and its not bad so far, heck its pretty good, so I really don't ever look back with regret or wishes of doing things differently bc who knows how any one choice would end result in things being same, better or worse.

But there is something I, and most parents, can't help the pull of your kids and things you can do for them. I struggle but I do have a tipping point.
« Last Edit: January 05, 2018, 02:41:15 PM by tooqk4u22 »

Retire-Canada

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Re: Retire or Rich
« Reply #79 on: January 05, 2018, 03:57:23 PM »
Also, there is a difference between providing advantages and "writing them fat cheques."  MMM had school paid for, that is a an advantage, had he not he might not have been able to move to the states or might have been stressed more about money distracting him from doing good work or turning to partying more for outlets.  The opposite is true of course as well.

I agree with the main thrust of what you are saying. I think the MMM approach to supporting kids is reasonable:

- free accommodation/meals at home while they go to a local school
- free tuition to a local school
- let them drive the family car a bit
- lots of great life advice and role modelling

Thing is this ^^ doesn't require a ton of extra work to afford to support your kids and it lets them get started without any debt.

BTDretire

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Re: Retire or Rich
« Reply #80 on: January 05, 2018, 04:51:10 PM »

Kids are the driver for sure.  If I didn't have kids, I certainly could have retired earlier and not relied on my military pension.  My goal is to get the kids out of college with zero debt hanging over their heads. 

I have used Coverdell accounts (better than 529s for my specific situation) since they were each born, contributed the max each year, and plan to use my GI bill for their education (I'm done going to college).  The oldest will likely start in '21, and right now there is enough to cover 3.3 years of her school.

I'm always shocked at the lack of discussion of setting up kids on this forum.  It's probably more healthy to not feel like you have to set your kids up. I don't know why I feel compelled to provide my kids more than my parents provided me, but there's a decent chance when I get to the FI part, I will keep working until "normal" retirement age to maximize what I can do for them, either help while I'm still living or as an inheritance.  The only semi-rational justification is that I want them to have the option to devote much more time to their children than we were able to devote to them, and since we will not be FI before that window where they are jumping up and down excited when we get home, it makes sense for us to try to help them be FI in time for that with their children. 

All that said, it still seems weird to me that it's not a bigger concern on this forum.  I guess self selection and all that.
I'm certainly planing how to leave the most to my kids. I'm funding their Roth IRAs while they are in college. They work enough to max it out. Earlier today I was trying to come up with an incentive to get them saving more, by matching what the invest in a Roth or even a regular mutual fund. Still need to get a good understanding of what heirs inherit at todays cost, and what is inherited at original cost and how RMDs affect all this.
 Yes, it's not discussed much and many say they aren't doing anything for the kids.

boarder42

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Re: Retire or Rich
« Reply #81 on: January 05, 2018, 04:54:49 PM »
Roth matching is awesome my parents did it for us. Great way to instigate saving and understand matching
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Re: Retire or Rich
« Reply #82 on: January 06, 2018, 12:07:50 PM »
Roth matching is awesome my parents did it for us. Great way to instigate saving and understand matching

 At this time they are both in college, so I tell them to work enough so that I can fully fund their Roth. Once they are out of college I'll change that.

gerardc

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Re: Retire or Rich
« Reply #83 on: January 06, 2018, 03:46:51 PM »
Somewhere in between. Downshifting may help to find that trade-off.

JSMustachian

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Re: Retire or Rich
« Reply #84 on: January 08, 2018, 11:29:32 AM »
I plan to follow most of MMM's principles like keeping expenses very low, investing over half of your income until I am able to replace 90-100% of my current income with the 4% rule. This will leave me with plenty of room for unplanned emergencies and travel during retirement. I would still be FIRE'd at 47.

« Last Edit: January 08, 2018, 11:33:09 AM by JSMustachian »

Livingthedream55

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Re: Retire or Rich
« Reply #85 on: January 08, 2018, 11:47:50 AM »

I am only 44 but I think about my mortality all the time. Per the Social Security Administration, I am currently expected to have 37.9 years left on the planet, dying at age 82. If I live that long, and I further assume that the last 12 years are somewhat sucky because of health issues, that means I have a grand total of 26 "good years" left. And I'm nowhere near FIRE.

So I am focusing on "how much is a 'good year' worth to me?"  And I wonder how much it's worth to others. I see my parents and my in-laws all currently working FT in their mid 60s. They are run-down, and frankly old. I'm not sure they have many, if any, "good years" left.

So how much money would you trade a "good year" for? If you could trade away half of your "good year" allotment in exchange for being rich, is that a good trade? People will disagree.

The mortality factor is a big one for me in pulling the plug next year.  I've had cancer, and once you've been through that -- time becomes so much more precious.  Especially good time, as Nick_Miller wisely points out.

+1 I had cancer at age 22! And it was a very life threatening type and stage. I am so grateful for every year since then (I'm 58!) and I don't take my actuarial longevity as a guarantee.



spartana

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Re: Retire or Rich
« Reply #86 on: January 08, 2018, 12:14:05 PM »
I wonder if a healthy respect for (or preoccupation with?) one's own mortality is a unifying characteristic of MMM types.  Though I didn't have any significant loss early in my life, I've always felt I was more acutely aware of my mortality than others. Like, I'm very aware that I could be hit by a bus at any time.  Or have a heart attack. Or get cancer.

Rather than being depressed, I've found this feeling makes me braver.  I'm already risking death everyday by just being a person walking around, so doing "scary" things isn't really all that scary.  If it goes wrong, I'll be just as dead as if I were hit by that bus.


My guiding motto is 'Accept it. Get over it. Move on.' I don't mean it in a flippant way and I accept that each step is sometimes difficult and/or protracted. A lot of people find the concept of death to be frightening or morbid, but having got to the 'move on' stage regarding my eventual demise, I too find the concept freeing... and I can't wait to get to RE, to free up my time for having fun.


Yes -- this exactly captures the mortality aspect of it for me.  It's not about depression or morbid dwelling.   Once you've worked through the issues of your mortality -- which can take a while -- there is a tremendous sense of freedom and lightness on the other side.   Once you have faced those issues, not much else in life will feel hard by comparison.  I feel braver and more at peace than ever.   I feel like I could fly.         


Mortality is inevitable we all know that so I dont dwell on it to much but occasionally when someone passes BUT I do concern myslf more with quality of life. While I am for the most part in good health (you never know what could be lurking) and need knee replacements for me having not taken care of sport injuries I feel I need to do alot of things now then wait till I am in my 60's or 70's.
This^. For me FIREing at 42 was less about mortality and more about ability. I left work mainly so I could do harder core physical activities while younger rather then put them off until an older age when my ability to do them at a higher level (or at all due to age, injury or illness) might not exist. Having an additional 25 years in relative youth and fitness compared to a normal aged retiree to do things was my biggest motivator to FIRE. While I did those things while working (and even took a 2 year sabbatical mid career to do them) its a totally different experience in ER.

So for me the answer is retire rather than rich. Maybe I'll go back to work at 65 when the knees get creaky ;-)
Retired at 42

Mika M

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Re: Retire or Rich
« Reply #87 on: February 13, 2018, 10:39:44 AM »
Retire. I've thought about this a lot. I think DH could keep working for the extra security and money, but if I were sitting at my desk tallying our net worth and suddenly it's the top end of our ER-range (about 1.5m) it'd probably be followed by a me-shaped hole in the office wall.

If it reaches the no-less-than number (about 1.2m), whether or not to leave work will be weighing heavy at the front of my mind.
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PizzaSteve

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Re: Retire or Rich
« Reply #88 on: February 13, 2018, 11:48:55 AM »
I've tried to figure out how people can spend $100k a year. The usual suspects of new cars every couple years, way too big houses, and constantly upgrading gadgets is about the only thing I can come up with. And even then, I don't get that high of spending.

Heck, just the other day my wife and I were talking about how we can't figure out anything we'd want to buy with $100 cash that relatives give us for Christmas.

So no, I don't see any reason to continue working. OMY or part time work to make sure sequence of returns doesn't bite us? Sure. Another decade so that our SWR ends up being enough to cover six figures? Absolutely not. I just don't know what I'd do with that kind of money.
Since my wife and I wanted to continue live in a HCOL area and travel a lot, with property taxes it required a pretty big minimum income generating stash.  I wanted close to zero failure risk and liked my last job, so we put in an extra 3-5 years and didnt regret it.
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Slow&Steady

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Re: Retire or Rich
« Reply #89 on: February 13, 2018, 01:05:50 PM »
I have done this math and refuse to make a concrete decision right now.  However, I love to read others perspectives and to put down my thought process because it is such a great thinking exercise. 

We are currently expecting our 2nd (and last) child, this baby should graduate high school a couple years before I turn 55.  I do not currently plan to retire before she finishes high school but if I work until 55 we should have plenty to retire.

Could we retire earlier than that, probably but that would require some lifestyle changes, specifically working more, that we aren't really interested in.  We also had a health wake up when DH was dx'd with MS 1 month after he turned 30.  By the time we had our 1st child a couple years later it was very apparent that his work was making his health worse.  We chose to have him take a step back, become more available for kid schedule stuff and potentially work on creating a business that wouldn't have a negative impact on his health.  Going down to basically 1 income for the last 4 years while still paying for daycare has dramatically slowed down where we could have been BUT when he goes for his semi-annual specialist visits to the doctor and is told he is the healthiest patient they have with MS, or we take a step back and look at the bond he has with our oldest, or he gets excited about his business growing (with out the negative health impacts) we know we made the right choice.  Due to his health we also choose to spend more on activities/conveniences now than most MMMers and have accepted that this choice could result in a later retirement than what we had originally hoped.

What about retiring after 55?  With the complete unknown of what the insurance landscape will look like in 20 years this something that might actually need to happen.  If it does happen though and my calculations are even remotely close, we will retire with more money than we actually ever spend. 

So as it sits right now, we are aiming for a sweet spot of 0-2 years after our youngest graduates high school.  This should be right around 4% for a very cushy yearly budget or less than 4% for a realistic budget.  If his health takes a nose dive I might work longer to afford luxuries that will meet his specialized needs or we might decide that we have plenty to live life and just enjoy our time together with less travel/luxuries.

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Re: Retire or Rich
« Reply #90 on: February 13, 2018, 01:36:28 PM »
Retire. Your wealth is in the time you have to accomplish the things you've always wanted to do but never had time for while working. We FIRE'd four years ago and totally overthought the process. Looking back, we could have and should have FIRE'd several years earlier and essentially wasted a few good years of enjoying life.
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NorthernBlitz

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Re: Retire or Rich
« Reply #91 on: February 13, 2018, 01:54:52 PM »
I have done this math and refuse to make a concrete decision right now.  However, I love to read others perspectives and to put down my thought process because it is such a great thinking exercise. 

We are currently expecting our 2nd (and last) child, this baby should graduate high school a couple years before I turn 55.  I do not currently plan to retire before she finishes high school but if I work until 55 we should have plenty to retire.

Could we retire earlier than that, probably but that would require some lifestyle changes, specifically working more, that we aren't really interested in.  We also had a health wake up when DH was dx'd with MS 1 month after he turned 30.  By the time we had our 1st child a couple years later it was very apparent that his work was making his health worse.  We chose to have him take a step back, become more available for kid schedule stuff and potentially work on creating a business that wouldn't have a negative impact on his health.  Going down to basically 1 income for the last 4 years while still paying for daycare has dramatically slowed down where we could have been BUT when he goes for his semi-annual specialist visits to the doctor and is told he is the healthiest patient they have with MS, or we take a step back and look at the bond he has with our oldest, or he gets excited about his business growing (with out the negative health impacts) we know we made the right choice.  Due to his health we also choose to spend more on activities/conveniences now than most MMMers and have accepted that this choice could result in a later retirement than what we had originally hoped.

What about retiring after 55?  With the complete unknown of what the insurance landscape will look like in 20 years this something that might actually need to happen.  If it does happen though and my calculations are even remotely close, we will retire with more money than we actually ever spend. 

So as it sits right now, we are aiming for a sweet spot of 0-2 years after our youngest graduates high school.  This should be right around 4% for a very cushy yearly budget or less than 4% for a realistic budget.  If his health takes a nose dive I might work longer to afford luxuries that will meet his specialized needs or we might decide that we have plenty to live life and just enjoy our time together with less travel/luxuries.

I think that I'll be retiring at a similar age (55-57).

Currently, my employer (a University) provides (at least) three pretty amazing benefits that will act as golden handcuffs:
1) Full college tuition for children at a select network of schools (currently a tax free benefit),
2) ability to buy into the group health insurance plan if retiring at 55 or greater, and
3) ability to move to half time for up to 2 years after 55 before retirement (get half salary, but full benefits including the tuition benefit above)

If they are "on time", the youngest of my 3 children should graduate when I'm 57.

If these benefits are all still around when I get to 55 (assuming that I get tenure), there is a big opportunity cost for retiring before 55. Helps the kids out a ton and dramatically reduces risk of failure due to health issues with my wife and I. Also, the ability to transition to retirement while receiving full benefits is pretty attractive (but my understanding is that it can only start at 55...so I can't use it to go from 53-55).