Author Topic: Can I be FI without taking ER?  (Read 3585 times)

MIstache

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Can I be FI without taking ER?
« on: May 29, 2016, 08:11:33 PM »
Hi,

I'm 45, married, husband w defined benefit pension, $1.5M NW, no mortgage. I just quit a (poorly paid, "half-time") job to focus on starting up a new project in part because I was pretty sure I could, fairly shortly, earn as much that way as I was in the job. Then yesterday I ran all our personal finance numbers and realized - I actually can take ER.

The thing is, I don't want to be retired. I'm fairly young, I love what I do, I am pretty good at it (despite last job which is a long story) and I am excited for a new adventure.

The other thing is that I am in the non-profit field. I find myself thinking that now, I should work for free... but I don't want to. I would rather earn more money and give it away than give away my time. I feel guilty about that, but when I look at everyone else in my field making good money, I don't know why I wouldn't aim for that also.

Discovering that earning money is now optional has seriously messed with my head. How do I think about work going forward? Is it ok to work and get paid even though I don't have to?

MDM

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Re: Can I be FI without taking ER?
« Reply #1 on: May 29, 2016, 08:21:31 PM »
How do I think about work going forward?
However you want to.  A nice thing about being FI is you no longer have to do something just to please an employer/client.

Quote
Is it ok to work and get paid even though I don't have to?
Of course it is!

Enjoy!

frugaldrummer

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Re: Can I be FI without taking ER?
« Reply #2 on: May 29, 2016, 09:51:43 PM »
Just one consideration for your calculations:

Run one extra calculation to figure out what your FIRE status would be if your husband suddenly up and left you for a younger woman.  I hope you never face such a scenario, but it's not a rare event for a man (or a woman for that matter) to have a midlife crisis around age 50.  And just because you believe you have a strong marriage is no guarantee that it won't happen to you.  It happened to me after 24 years of a mostly happy and enviable marriage.

What did I learn?  That defined benefit pension is probably written in such a way as to favor your husband.  For instance: my husband's pension accrued at 2% of his final salary per year for the first 20 years, then 1%/yr after, up to a max of 50%.  Since we were married the first 20 years, I should have been entitled to 1/2 of the 40% of his salary benefit that was earned during those 20 years.  But the formulas used in divorce court don't account for that, and I actually will only get 17% instead of 20%. 

The home equity may be split, but if you're not earning much you might have trouble getting a new mortgage.  My friend missed out on a chunk of the equity in her marital home because her husband owned it for a few years before they married. The house appreciated quite a bit during the first few years they were married, but she wasn't credited with half of that - only starting when they refinanced after 5 years and her name was put on it.  This, even though we live in a community property state.

Anyway - hopefully NONE of this will happen to you, but just be sure that whatever you calculate, you also run the scenario for a runaway spouse.  Make sure you'll be good either way.

PhysicianOnFIRE

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Re: Can I be FI without taking ER?
« Reply #3 on: May 29, 2016, 10:04:14 PM »
Sure, why not?

I am FI, but haven't yet RE.

It sounds like you've got some good reasons to continue working, and you've got the freedom to do whatever you want. If you love the non-profit work that you do, and you're good at it, why not continue to work? If you don't want all the earnings, you can always give some away. I favor a donor advised fund for charitable giving.

I'll probably retire from clinical medicine when I'm closer to 2x FI. I like the idea of a bigger cushion, and like you, I mostly like my job and feel I'm reasonably good at it. At age 40, I also feel too young to walk away for good.

Best,
-PoF

mxt0133

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Re: Can I be FI without taking ER?
« Reply #4 on: May 29, 2016, 10:12:52 PM »
They way I look at working for money even if you don't need it is a measure of how much your work is valued.  Most people and organizations don't really value free labor well.  In my experience of volunteering, you get the crap jobs because they can't count on you coming back.  They are hesitant to train you and give you long term projects for the same reason.  I can't tell you how many times I have given people financial advice when asked but never taken seriously because I didn't charge them for it.  Then have those same people implement the advice after paying someone else to give them said advice.

Our society is wired to associate cost with value, it's just the way most of us do things.  So unless you find a position that is really meaningful to you and the organization values your skills and utilizes them, you will probably be looking for paid positions to find interesting work.

MIstache

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Re: Can I be FI without taking ER?
« Reply #5 on: May 30, 2016, 05:17:38 AM »
Thanks for replies!
Just one consideration for your calculations:

Run one extra calculation to figure out what your FIRE status would be if your husband suddenly up and left you for a younger woman.  I hope you never face such a scenario, but it's not a rare event for a man (or a woman for that matter) to have a midlife crisis around age 50.  And just because you believe you have a strong marriage is no guarantee that it won't happen to you.

You are right! We had a really rocky beginning of our marriage (16 years ago) and I have always figured that since we survived that we could survive anything. But there is no way to know for sure! I need to do a more serious calculation, but worst case scenario I think I would be single and $700K NW which is still not terrible if I keep growing that figure.

Our society is wired to associate cost with value, it's just the way most of us do things. 

YES! This is why I want to be paid to work. If I do stuff for free (which I have done plenty of in the past), no matter how good I am, the work does not get the respect it deserves.

Sure, why not?

I am FI, but haven't yet RE.

It sounds like you've got some good reasons to continue working, and you've got the freedom to do whatever you want. If you love the non-profit work that you do, and you're good at it, why not continue to work? If you don't want all the earnings, you can always give some away. I favor a donor advised fund for charitable giving.

I'll probably retire from clinical medicine when I'm closer to 2x FI. I like the idea of a bigger cushion, and like you, I mostly like my job and feel I'm reasonably good at it. At age 40, I also feel too young to walk away for good.

So glad to know I am not alone with this. I guess I have had the mindset that the whole point of being FI is so you can RE - starting from when I read Your Money or Your Life way back in the early 90's.

How do I think about work going forward?
However you want to.  A nice thing about being FI is you no longer have to do something just to please an employer/client.

This is exactly why I quit my last job - I had too much invested in making things work well for the organization vs what they were paying me. And basically I've done that in every job - taken on too much. At one job when I left they hired the next person to do 1/3 of my position (for the same salary I had received). My new strategy was "I'll work for myself now" which I still want to do. Some part of me just wants to see how I do if I work for myself vs somebody else, because I have been consistently frustrated working for other people in the past. The thing is, I have to figure out a way to measure that which is not solely dependent on money because I think my motivation for working for money just took a severe hit when I realized that getting more money is nice but not absolutely, vitally necessary!


tobitonic

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Re: Can I be FI without taking ER?
« Reply #6 on: May 30, 2016, 08:25:19 AM »
Discovering that earning money is now optional has seriously messed with my head. How do I think about work going forward? Is it ok to work and get paid even though I don't have to?

I'd recommend doing some reading on happiness and longevity. Statistically, the happiest people aren't the ones who retire early; they're usually the people who have a strong sense of purpose and connection to others. You can get those without a day job, but if you have a job that gives you those, you might be in for a shock if you leave it because MMM convinced you to. Heck, you'll note that MMM himself is FI, but isn't retired in any reality-based sense of the word (he runs a blog generating 400k a year full time, he has a construction business, etc). He's FI and self-employed.

Cassie

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Re: Can I be FI without taking ER?
« Reply #7 on: May 30, 2016, 02:36:31 PM »
Even at 53 & 58 my DH and i did not like being fully retired. WE each do p.t. consulting in our fields. I once volunteered to do what I do for a living for free with a non-profit that was just starting up which would save them a ton of $. I was told to come to the volunteer meeting and they would assign me what they wanted me to do. Ugh! No!!

csprof

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Re: Can I be FI without taking ER?
« Reply #8 on: May 30, 2016, 04:39:37 PM »
Discovering that earning money is now optional has seriously messed with my head. How do I think about work going forward? Is it ok to work and get paid even though I don't have to?

I'd recommend doing some reading on happiness and longevity. Statistically, the happiest people aren't the ones who retire early; they're usually the people who have a strong sense of purpose and connection to others. You can get those without a day job, but if you have a job that gives you those, you might be in for a shock if you leave it because MMM convinced you to. Heck, you'll note that MMM himself is FI, but isn't retired in any reality-based sense of the word (he runs a blog generating 400k a year full time, he has a construction business, etc). He's FI and self-employed.

OP - http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-vs-the-internet-retirement-police/

There are a lot of folks here for whom FI means some combination of safety net, flexibility, and a guarantee that they don't have to take any, er, excrement, in their job-related decisions.  I love what I do and don't plan to fully retire ever, but oh my goodness, do I want to have the luxury of being able to at a moment's notice if I ever sour on it. :)  (And I'm pretty sure that 20-30 hours per week, mixed in with a lot of hiking, could be very fun some day once I'm done working 50-60.)

NextTime

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Re: Can I be FI without taking ER?
« Reply #9 on: May 31, 2016, 08:57:50 AM »
Sure, why not?

I am FI, but haven't yet RE.

It sounds like you've got some good reasons to continue working, and you've got the freedom to do whatever you want. If you love the non-profit work that you do, and you're good at it, why not continue to work? If you don't want all the earnings, you can always give some away. I favor a donor advised fund for charitable giving.

I'll probably retire from clinical medicine when I'm closer to 2x FI. I like the idea of a bigger cushion, and like you, I mostly like my job and feel I'm reasonably good at it. At age 40, I also feel too young to walk away for good.

Best,
-PoF


We also have a shortage of doctors, so I'm glad you have continued to keep working even though you don't need to. I hope you continue to enjoy your job for years to come.

PhysicianOnFIRE

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Re: Can I be FI without taking ER?
« Reply #10 on: May 31, 2016, 04:53:54 PM »
Sure, why not?

I am FI, but haven't yet RE.

It sounds like you've got some good reasons to continue working, and you've got the freedom to do whatever you want. If you love the non-profit work that you do, and you're good at it, why not continue to work? If you don't want all the earnings, you can always give some away. I favor a donor advised fund for charitable giving.

I'll probably retire from clinical medicine when I'm closer to 2x FI. I like the idea of a bigger cushion, and like you, I mostly like my job and feel I'm reasonably good at it. At age 40, I also feel too young to walk away for good.

Best,
-PoF


We also have a shortage of doctors, so I'm glad you have continued to keep working even though you don't need to. I hope you continue to enjoy your job for years to come.

Thanks!  Work's not my favorite thing in the world, but as far as jobs go, I mostly enjoy it.