Author Topic: Case Study - 55+ FIRE - OMY or 2?  (Read 4440 times)

FIREstache

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Case Study - 55+ FIRE - OMY or 2?
« on: April 20, 2019, 07:21:51 PM »
I'm loosely planning to retire May 2020
« Last Edit: July 14, 2019, 03:25:55 PM by FIREstache »

Freedomin5

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #1 on: April 21, 2019, 01:02:09 AM »
In your position, it looks like you donít really have a pressing reason to FIRE ASAP, and you donít have a pressing reason not to FIRE ASAP. I think either OMY or 2MY is fine.

I would probably work the extra year to: 1) Fund the upcoming major expenses, and 2) Build up a cash cushion to minimize sequence of returns risk. Especially since it sounds like you enjoy your work and because youíre unlikely to get a similar position once you FIRE, if you ever do need to return to work.

happy

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #2 on: April 21, 2019, 05:42:27 AM »
On the other hand at 54, there is the pressing issue of TIME, and declining physical prowess. Don't wait too long.

Freedomin5

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #3 on: April 21, 2019, 09:37:13 PM »
Does it make a significant difference to what you're doing this year, whether you decide to retire at 55 or 56? Would it be okay to work OMY until 55, and then decide whether you want to do another OMY to 56?

BicycleB

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #4 on: April 21, 2019, 10:00:16 PM »
Financially you could FIRE this second. But since you haven't tested your desired lifestyle enough to know whether your expected spend will max out your happiness, you have uncertainty. Balanced against it is the likelihood of never again earning so much money so easily and pleasantly. Undecidables vs each other.

You could test out your expense rate as much as possible before retiring, maybe. I did a thing once where I gave myself an amount to spend on pleasure and went out to have as much fun with it as possible. Never spent the full budget - just discovered that it was more than I needed at the time to be happy, so money hasn't felt like a real limit on my happiness since then. Also, I did several other previous experiences with testing whether a big spend added happiness, and how it compared with my guess as to what I'd like. Is there any similar calibration that you can do?

Absent a "yes", my guess is that you should go for it ASAP due to the time factor. But I understand the income thing too. At some point, you just decide. You've entered the freedom zone.

PS. I had a friend who enjoyed life along the way, liked working and always said he never really wanted a long life. A couple days after his most exciting promotion, he died in his sleep. He was in his 40s. 

Enjoy whatever you do; good luck.
« Last Edit: April 21, 2019, 10:03:11 PM by BicycleB »

CrazyIT

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #5 on: April 22, 2019, 12:20:09 PM »
You are good to go any time.  You mention owning a house but didn't include that in your asset mix.  At some point you will probably sell and rent so you will have that monies to invest also.  Remember the lower you AGI the more the ACH is subsidised.

I am the same age as you and similar financial situation with a cushy IT job.  Its hard to break the OMY thing floating around in my head too. 

Good luck!

Nick_Miller

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #6 on: April 22, 2019, 03:05:08 PM »
To be honest, if I were you, I would be out of there tomorrow and never look back.

With $1.4M AND a paid for house, AND no dependents, AND living in a LCOL community, I'd want to take full advantage of that extra "healthy year" (this year!) and DEFINITELY the next "healthy year" (next year!) to do whatever I want. There are lots of things you can do now that you can't do in your 70s.

MrThatsDifferent

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #7 on: April 22, 2019, 03:26:46 PM »
To be honest, if I were you, I would be out of there tomorrow and never look back.

With $1.4M AND a paid for house, AND no dependents, AND living in a LCOL community, I'd want to take full advantage of that extra "healthy year" (this year!) and DEFINITELY the next "healthy year" (next year!) to do whatever I want. There are lots of things you can do now that you can't do in your 70s.

+1

Youíve done great! Congrats. You have more than enough. Remember, your worst case scenario is simply to not use all of the $25k extra your first couple of years. Maybe from that list you can choose a couple things to focus on for the first two years and thatís where you spend your money? For example, year one is eating out, but year two is travel and you donít eat out as much? You should read Go Curry Cracker. Heís written on the power of spending less your first couple years of retirement so you can spend whatever the subsequent years. And thatís if youíre conservative. Your fine.

Classical_Liberal

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #8 on: April 23, 2019, 03:40:44 AM »
First off, I really think that more than doubling your spending for "discretionary" is not going to be that easy for you to do.  Sure, maybe for a year or two, but once those expensive things are checked off your bucket list I think a frugal person will be hard pressed to spend so liberally, particularly with all that extra time (ie opposed to your thoughts that extra time will cause you to spend more).  I'm not sure what you plan to spend an extra 2K a month on, but most things are actually cheaper when you have the luxury of time.  For example, you can golf on the deal days, or travel with less of a strict timeline and take advantage of discounts, cook more at home, etc.  Frugality is in your nature, you're not going to be able to pay triple cost for these things when you have the luxury of time, at least that's my bet.

I think your biggest issue here is going to be a mental one.  Seriously, the OMY or Two is all dependent on when you can get stuff straight in your head and accept your FI situation.  This is the most ignored issue in the FI blogoshpere and one you are going to have to come to terms with before you can enjoy the fruits of your labor.
« Last Edit: April 23, 2019, 03:43:11 AM by Classical_Liberal »

JSMustachian

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #9 on: April 24, 2019, 01:10:16 PM »
Your base expenses plus the discretionary spending is roughly $50,000. 4% withdraw on 1.4 million is $56,000. I would be putting in my two week notice today.

ericrugiero

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #10 on: April 24, 2019, 06:56:24 PM »
4% with half your income being discretionary is still pretty conservative.  If the market tanks and you need to stretch things a little you can just cut out the travel and you are at 2% for that year.  Or, use credit card rewards, look for deals, travel to low cost areas, etc to make it 3%. 

4% for you is much more conservative than someone who can't really cut back much. 

mistymoney

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #11 on: May 05, 2019, 07:20:18 AM »
You are good to go any time.  You mention owning a house but didn't include that in your asset mix.  At some point you will probably sell and rent so you will have that monies to invest also.  Remember the lower you AGI the more the ACH is subsidised.

I am the same age as you and similar financial situation with a cushy IT job.  Its hard to break the OMY thing floating around in my head too. 

Good luck!

this is a good point.

How are you all balancing the super-low overhead to get to FIRE with utilizing your vacation time and living a little now in regards to vacations and going out, etc? Specifically in those cases in which you rather enjoy the day job?

OP is opening up his discretionary spending by 25k after FIRE - what about a nice vacation if you do go 2MY?

2Birds1Stone

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #12 on: May 05, 2019, 08:39:48 AM »
I would seriously consider downshifting now, you aren't getting any younger....who knows what pops up in the next few years.

I find this tool VERY useful. Would be surprised if your success rate is anything less than 99%
https://engaging-data.com/will-money-last-retire-early/

soccerluvof4

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #13 on: May 07, 2019, 03:40:51 AM »
I'm you age and I fire'd 4 years ago. I as others have said would get out now. 50's while still young things seemingly start to go so enjoy as much as the good years as you can. Looking back I wish i would of Fire'd at 45. Your in great shape to do so, congratulations on that!

SunnyDays

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #14 on: May 07, 2019, 01:09:43 PM »
Split the difference and work 6 additional months?

spartana

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #15 on: May 07, 2019, 01:33:59 PM »
I'm in the retire now camp. From my perspective you are financially set and I don't really see any monetary benefit for working longer. I retired over a decade ago and have zero regrets (other than wishing I did it earlier at 38 as planned) and my experiences have shown that I need less money than I thought I did but am able to have just as many of the same experiences as I originally planned. Time waits for no man and, to quote @arebelspy, it's later then you think.

ericrugiero

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #16 on: May 07, 2019, 02:59:17 PM »
At this point you really don't have much to lose by asking for a part time position.  I'd personally start there.  If they fire you (worst case) you are FIRE.  That could end up best case. 

Your fixed expenses being so low will give you lots of flexibility.  If the market tanks you could be a little more frugal while stock values are down.  That flexibility would have a huge impact in maintaining your wealth. 

It's really a matter of how safe you want to be and how much extra spending you want.  As mentioned above, don't forget to account for the risk of "wasting" the best health you have left. 

jeroly

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #17 on: May 11, 2019, 04:51:24 AM »
1. Even if you meet your discretionary spending goals you have enough savings to meet your budgetary requirements, even allowing for end of life expenses. In other words, you've won the game. Quit now if you want to, work one or two more years or more if you find it interesting/rewarding for nonmonetary reasons.

2. I think you'll find it a big challenge to upscale your discretionary spending on such a big scale.

Classical_Liberal

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #18 on: May 12, 2019, 03:17:48 AM »
[https://forum.mrmoneymustache.com/post-fire/cheapskate-to-spendypants-in-fire/

Thanks for starting that thread, it's interesting.  I have to say, It's mostly what I expected.  Nice confirmation bias if nothing else :)

jeroly

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Re: Case Study - 55+ FIRE - OMY or 2?
« Reply #19 on: May 13, 2019, 10:20:30 AM »
1. Even if you meet your discretionary spending goals you have enough savings to meet your budgetary requirements, even allowing for end of life expenses. In other words, you've won the game. Quit now if you want to, work one or two more years or more if you find it interesting/rewarding for nonmonetary reasons.

2. I think you'll find it a big challenge to upscale your discretionary spending on such a big scale.

Thanks for the response.  I'm using 4 weeks of vacation days spread out over the summer, with the last days in Sept., so I figure about 4 months later, I'll put in a 2 month notice, just like the guy I work with who recently put in his retirement notice.

You could be right about me not scaling up my discretionary spending so much.  I started a thread about that a while back asking if others have.

https://forum.mrmoneymustache.com/post-fire/cheapskate-to-spendypants-in-fire/

There were a couple respondents that ratcheted up the discretionary spending quite a bit, in both cases because of travel.  So, I think that will be the primary determining factor for me also, whether I will begin traveling regularly, the type of travel, and whether I will continue that from year year.  I haven't done enough traveling in my life to really know, but it's something I look forward to doing.  If I end up not enjoying traveling much, it's hard to imagine spending anywhere near $25K on other types of entertainment and misc. discretionary.

I'm traveling for 15 weeks this year, to six different countries in four continents, and it's hard to imagine traveling more without selling or storing my possessions and hitting the road full time. Without doing much travel hacking, or even much economizing, and not considering the amount I am saving from my at-home food, entertainment, and transportation budgets, I'm only spending about $15K. Unless I started buying first class plane tickets I couldn't see myself being able to spend $25k on travel, and to me, buying first class tickets is like lighting cigars with $100 bills.