FIRE on the mountain (2024 - two year upate)

[weebs]

Life Situation: 49 year old DINKs.  Possible FIRE at 52.

Gross Salary: 300K annually (base and bonuses).

Current monthly expenses: $3000

Assets:

Primary residence (paid for, no mortgage) - $900K
Vehicles (all paid for) - 2016 Toyota 4Runner (40k miles), 2019 Audi S3 (10k miles), 2005 Honda S2000 (50k miles)

401k/403b - $1.3M (70/30 diversified stock/bond allocation)
Brokerage - $400K (same ratio as above, less diverse)
Cash      - $225K
Pension   - $24k/yr, payout starting at age 65 (see below for details)


Liabilities:

The world's most medically challenged Labrador Retriever.  Eventually, the German car. 


Situation:

I'm a software engineer/architect who's been at it for 27 years.  My lovely bride is a project manager.  We're both high performers who get great reviews, but neither one of us is in love with our work.  I'm seriously considering working full time for another 3 years and then transitioning to part time gig work.  Mrs. Weebs is undecided.  She'll definitely work full time for the next three of years, but she's unsure of the plan after that.  I've been at my current employer long enough to get a pension.  My wife works for the same employer and her pension will vest in another year.  Assuming we stay another three years, we'll get ~ $2k/month total when we turn 65.  It's not a lot, but it will help.  I could claim the pension earlier if I stuck around for another 8 years and officially retired at 57, but I'm not sure I want to go that route.  We're maxing out our pre-tax retirement contributions and our employer is contributing a 5% match on top of that. We're putting ~9K/month into savings above and beyond pre-tax retirement contributions.  Prior to this year, some of that 10K was getting funnelled into a brokerage account, but we're a bit spooked by the current market and it's all going into savings (for now).

Unlike our dog, we're both healthy (knocks on wood).  I researched health care (https://planfinder.connectforhealthco.com) and found affordable plans similar to what we're getting through work.

We live in a relatively HCOL area (Evergreen/Conifer, CO), but the house is paid for and we've put A LOT of work into it over the last five years - new kitchen, roof, master bath, floors, landscaping, etc.  We both love the outdoors and this area is ideal for the activies we enjoy.  In addition to contract work and volunteering, I plan on spending my time doing the things I already enjoy - gardening, hiking, biking, paddle boarding and kayaking in the summer and yoga, snowshoeing, snowboarding and house/car projects in the winter. 

Conclusion:

Based on the above, I think we can step away from our full time jobs in 3 years.  The current economy scares me a bit, but we have enough cash to weather a downturn without tapping the brokerage or retirement accounts.  What says the group?

[RWD]

What's wrong with retiring now?

[iluvzbeach]

Financially, you have more than enough to fully retire now. Any specific reason you want to hang on longer? I can understand your wife wanting to wait to vest in her pension but you can more than afford to retire now and, your wife, any time she wants after her pension vests.

[314159]

You already have 1300k+400k+225k = 1.925m in liquid assets. By the 4% rule you can sustain 77k of annual expenses  on just those. If you think 4% is too high, fine, use a 3% rule: 58k. This is *before* your pension(s) and Social Security.

Yet you report monthly expenses of 3k, so 36k per annum!

Serious question: what are you saving for?

[weebs]

Thanks for the feedback.

What's wrong with retiring now?

Any specific reason you want to hang on longer?

I sense a theme.  ;)  Some of it is psychological, some of it is practical.  I may not love my gig, but it's relatively low stress and the pay and benefits are good.  I'd like to take the next 3 years to transition into a retirement frame of mind - backing down the pace at work, using all of my PTO, etc, while still drawing a paycheck and padding our savings while closing the gap to when we can access our retirement accounts without penalty.  We turn 50 next year and plan on taking a couple trips outside of the country, which will be expensive.  Finally, my parents just recently retired (Mom in 2020, Dad last week).  I'd like to live vicariously through them for a couple years and learn from their experiences before I pull the plug.

Serious question: what are you saving for?

No one has ever asked me that question and it's surprisingly jarring (in a good way).  Both my wife and I grew up in low income households.  My parents were teenagers when they had me.  Hers were divorced hippies who made it work by working multiple side hustles.  Failure was always an option.  We're saving to put as much distance between ourselves and the financial reality of our childhood experiences as possible.

[LifeHappens]

You've got the money part figured out. Next up is the psychology. Setting yourself a 3 year deadline is a good start if you really do plan to address you and your DW's psychology around money.

[zolotiyeruki]

My BIL retired a year or two ago.  He put it like so:

"In order to retire, you have to answer these three questions:
1) Do you have enough (money)?
2) Have you had enough? (i.e. are you emotionally ready to leave work?)
3) Will you have enough to do?"

You are waaaaaay past "yes" on #1.  It doesn't sound like you've addressed #2 very well, while #3 might be covered by your love of outdoor activities.

I have a whole laundry list of things I want to do once I retire.  DW also has a laundry list of things for me to do once I retire :)

Just to hammer the point home on finances, you have more than twice as much money as you need to retire, right now.  Just your brokerage account by itself should easily be enough to get you to age 59.5, even without a Roth pipeline (which I would still highly recommend, and is even better if we hit a downturn!).  You are swimming in money, and doubly so once you start getting pension and SS income, which will once again cover more than your expected expenses.

Here's another way to put it:  your current savings can give you nearly $80k/year of income.  You currently spend less than half of that.  How do you plan to spend the other $44k every year? You could give a $100 bill to a random stranger every day (pick me! pick me!), and still have more than enough for your own lifestyle.  Take the pension in three years, and now you have* to figure out how to give away $200 every. single. day. in order to

Keep in mind that the 4% rule is also very, very conservative.  It gives 100% success under the worst market events in the last century and a half, i.e. if you retired the day before Black Tuesday and never adjusted your spending or earned any side income, you'd still be fine with a 4% rule.

And then SS kicks in ten years later, and you could literally give away the entire sum of your brokerage, savings account, and 401k/403b accounts, and still be ok.

*  Sure, you don't *have* to spend it, but what else are ya gonna do with it?

[former player]

Others have weighed in (correctly, according to the numbers) on the finances.  I just want to highlight this:

In addition to contract work and volunteering, I plan on spending my time doing the things I already enjoy - gardening, hiking, biking, paddle boarding and kayaking in the summer and yoga, snowshoeing, snowboarding and house/car projects in the winter. 

I retired at 50 in good health and am now 62.  Fortunately I am still in good health but I'm starting to find a number of these activities (or my equivalents of them: not much snowshoeing round here) harder than they used to be and I'm less inclined than I was to take off on a several day hike.  You need to know that your good years for doing these things are now, not later.

[weebs]

Again, thanks for the feedback everyone. 

You are waaaaaay past "yes" on #1.  It doesn't sound like you've addressed #2 very well, while #3 might be covered by your love of outdoor activities.

You're spot on.  We definitely need to work on #2.  Our house sits on a couple of treed acres, so #3 will never be a problem.  There's ALWAYS something that needs to be done around here. :-)

Take the pension in three years...

It probabaly wasn't clear in my original post, but I'd need to work for another 8 years to be given the pension on the day I retire.  If I leave any time before that, I won't be able to access it until I turn 65. 

You need to know that your good years for doing these things are now, not later.

Great point and this has become painfully clear (pun intended) over the last couple of years. 

[zolotiyeruki]

Take the pension in three years...

It probabaly wasn't clear in my original post, but I'd need to work for another 8 years to be given the pension on the day I retire.  If I leave any time before that, I won't be able to access it until I turn 65. 

Ah, thanks for the clarification, I had missed that.  Fine, you only have 2.3x as much as you need to retire, instead of 2.6x. :D

[weebs]

It's hard to believe a year has passed since the original post, but here we are.  2023 update:

Gross Salary: 300K base + bonuses

Current monthly expenses: $4000

Assets:

Primary residence (paid for, no mortgage) - $820K
Vehicles (all paid for) - 2016 Toyota 4Runner, 2021 Toyota Tacoma, 2005 Honda S2000

401k/403b - $1.13M (65/35 diversified stock/bond allocation)
Brokerage - $500K (VMFXX Admiral Shares)
Cash      - $200K
Pension   - $24k/yr, payout starting at age 65

We're down ~100K from this time last year.  It sucks, but could be worse.  We were down ~200K at one point, but our retirement accounts recovered a bit in Q1.  Our monthly expenses went up $1000 due primarily to increases in insurance (home and auto), groceries and property taxes.  DW got a 9% raise (yay!), which offset our increased expenses.  I'm at the top of my band and my motiviation is skimming along the bottom, so I got the perfunctory 2%.  Whatever.  We traded the Audi for a Tacoma, which will be my retirement chariot.

2022 was a tough year.  We lost our lab (mentioned in the original post) to cancer, almost lost DW's mom to a pulminary embolism and my dad was diagnosed with cancer.  Fortunately, my mother-in-law is recovering well and they caught my dad's cancer early and the prognosis is good.  Knock on wood, both DW and I remain healthy.

Regarding finances, last year was educational.  It was a reality check to see our account balances fall and recover over the year and made me realize a couple things:

* I'm waaaay too emotional about money.
* It's important to have a cash buffer.
* What goes down will eventually come back up and your cash buffer will get you through in the interim (see above bullet).
* We're at a point where our net worth is impacted more by market gyrations than our pre and post tax contributions.

DW's job continues to be stressful, but manageable.  There's much more BS in my gig.  I had very direct conversation with my boss regarding a certain project.  I made it clear that it was something that I didn't want to do.  He kept pushing me, so I finally said that I'd resign if it was made a condition of my employment.  He said that he heard me and understands my position, but stopped short of saying I was off the hook for the project.  I'm ~90% sure he won't force the issue, but we'll see.  I went on a nice long mountain bike ride the day before that conversation and made peace with leaving my gig.  DW would rather I stay for the next two years to pad our stash (as was the plan), but is OK with me leaving if it really starts to suck.  Meh...I'll find something to keep me off the streets.

[zolotiyeruki]

So even with the market down 20% from its peak, you still have 1.8x what you need to retire if you follow a 4% WR (which is itself, a conservative approach).  You're not enjoying your job, and DW is stressed by work.

Tell me again why you're still working?

[314159]

You're still working?? Have you made any progress on the question I asked a year ago, "what are you saving for?"

YOU HAVE ENOUGH MONEY. More than enough! Stop thinking about money! Think about why you are working instead, and what you are going to do when you're not working.

If you decide that paid work is something you want to do in order to live your best life—that's fine, but it's clear that this job is not filling that niche.

All this goes for both you and your wife.

[weebs]

Have you made any progress on the question I asked a year ago, "what are you saving for?"

Absolutely.  I've thought about it quite a bit and realize that I've saved enough to stop working and spend more time doing the things I love.   This leads into the next talking point...

YOU HAVE ENOUGH MONEY. More than enough! Stop thinking about money! Think about why you are working instead, and what you are going to do when you're not working.

Once more for the cheap seats!  ;)  All kidding aside, I'm not worried about the money anymore and have even pulled in my target date from 09/25 to 04/25.  I've run the numbers and vetted the plan with multiple sources.  I've seriously backed off my pace at work and said 'no' for the first time in my career (as described above).  As Metalcat said, it was a serious Red Pill Moment.  At this point, I'm working to preserve domestic harmony and provide a net while I practice the whole RE thing by living on 1/3 of my take home pay.  The money saved is a bonus, not the goal.  That being said, seeing that paycheck deposited every two weeks REALLY helped offset the stress of watching our investments decrease and reduced the temptation to move money around in the retirement accounts - we just let it ride.

DW has decided (for now) that she wants to work until 55.  I've run the numbers multiple times and explained that it's not necessary, but she wants to keep going and I'm done discussing it.  She's more comfortable with me working for the next two years, but is OK with me leaving if it really sucks.  Otherwise, I'll use the time to continue experimenting and pad the stash.  Domestic harmony trumps retiring now and I'm ok with that.

I can think of many, many things to do when I'm not working.  I picked up a split board for the backcountry this year and the numerous trees marked by the fire department on our property aren't going to cut themselves down.  The blue dots are beginning to bug me, so I'll start with the ones I can see from my office.  ;-)

Tell me again why you're still working?

See above.  :)

Thanks for taking the time to respond, guys.  I really appreciate it.

[FireLane]

Just my own perspective:

You have a higher NW than I do, plus you're nine years older than me, so that's nine years less your money has to last.

You also have a pension, which I don't have, and your wife wants to keep working until 55.

I retired two years ago. Why are you still working?

There's no need to wait until 2025. You can claim your freedom today, if you want it, and start in on those many projects you mentioned. You've won the game already. You're set for life and then some, even if you never earn another dollar. More likely, your biggest problem is going to be giving away the giant pile of money you're going to have in your old age.

If your wife would prefer that you keep working for the sake of a little extra security, why not go part-time at the very least?

[weebs]

Just my own perspective:

You have a higher NW than I do, plus you're nine years older than me, so that's nine years less your money has to last.

You also have a pension, which I don't have, and your wife wants to keep working until 55.

I retired two years ago. Why are you still working?

There's no need to wait until 2025. You can claim your freedom today, if you want it, and start in on those many projects you mentioned. You've won the game already. You're set for life and then some, even if you never earn another dollar. More likely, your biggest problem is going to be giving away the giant pile of money you're going to have in your old age.

If your wife would prefer that you keep working for the sake of a little extra security, why not go part-time at the very least?

Thanks for the perspective.  The last two weeks have been interesting.  My Dad unretired last week and it really made me think about my reasons and my goals for working.  He said he's going back for the money, but it's more about his mental well being.  He just can't handle time alone with his thoughts.  I've spent the the last week off work and visiting my mom and grandmother in northeast Florida.  It took me the whole damn week to unwind.  I'm an early riser who doesn't get much sleep, so I've had some time to myself to ponder why I'm still working.

I'll spare everyone the sordid family history, but it's about safety.  It smacked me in the face during a particularly candid conversation with my mom.  Neither of us felt safe with our early family life and we're still working through that now.  I deeply value my marriage and have leaned heavily on that relationship as a source of safety that I didn't have growing up.  Introducing conflict into that relationship is scary and I'd rather work a little longer to avoid doing so.  I've been honest with my wife about how I feel.  As I mentioned before, she's fine with me leaving if it becomes a quality of life issue. 

That being said, I want to exhaust all of my options before pulling the plug early on the plan.  My job has been 50% fun stuff and 50% bullshit lately, which is why I told my boss that I wasn't interested in the BS project.  A 1:1 fun/BS ratio sucks and that needs to change if I'm going to stay.  I'd have zero regrets resigning if it doesn't.  Your point about part time work is also good.  I started shaking down a former manager about working part time.  Unfortunately, it's not an easy thing to make happen and may not be a viable option in our org.  Ironically, my wife and I ran into a former co-worker while skiing on a Monday earlier this year.  His current (my former) employer offered him the ability to work 3 days a week (at 60% pay) when he said he was going to retire.  Those roles are available, it's just a matter of finding some place that's willing to play ball.

Thanks again for the input everyone.  I'm getting there.

[Holocene]

I started shaking down a former manager about working part time.  Unfortunately, it's not an easy thing to make happen and may not be a viable option in our org.  Ironically, my wife and I ran into a former co-worker while skiing on a Monday earlier this year.  His current (my former) employer offered him the ability to work 3 days a week (at 60% pay) when he said he was going to retire.  Those roles are available, it's just a matter of finding some place that's willing to play ball.

You'd be amazed at what's a viable option when their only other option is losing you completely.  Your former coworker proves that.  It's a matter of figuring out what you really want.  If you're truly willing to walk away, you have all the leverage here.

I was planning to leave my job last year.  I actually went as far as to resign.  After talking with my boss, I ended up proposing a 6 month sabbatical and a 20 hour week part-time job doing something new when I came back.  This idea literally did not occur to me until after I talked to my boss to resign.  I really thought I was done.  So I don't know if resigning first was a necessary step or not.  I like to think they would've made it happen either way.  It was honestly a lot to ask, but they did make it happen.  At that point, they knew I was leaving if they didn't.  I guess they thought I was valuable enough to keep around.  Part-time is not unheard of at my megacorp, but certainly not common in my type of role.  But I asked for what I needed in order to stay, and they were able to give it to me.  Part-time is WAY better than full-time and my new role is much more of what I like and less BS.  But I still miss my time when I was completely off, so not sure how long I'll keep this up.  Having complete freedom of my days for 6 months sort of shifted my mindset.

I'm with everyone else here in agreement that you'd be fine retiring now.  I understand the mental aspect of retiring early can be a lot harder than the financials.  Maybe another option is a sabbatical?  Just be prepared that you might not want to go back... But that could be a good thing.

Sorry about your tough year and the loss of your dog.  I'm glad your parents are ok after their health scares.  These are all reminders that life is short.  Another 2 years of work will bring minimal extra value to your life in the form of a tiny bit of extra financial security.  Whereas you could be spending those 2 years living life to it's fullest, spending time with those you love while you can, doing activities you love, and making memories.  It's one thing if you really enjoy your job.  If you don't (and you seem not to at least 50% of the time), that seems like a big waste of your time at this point.  But only you can decide that.

[weebs]

@Holocene - thanks for the condolences.  Losing Wilson in October was the roughest part of a not-so-good year.  Thankfully our parents are doing well.  It's a bummer that my dad unretired, especially considering his cancer diagnosis, but he and I have always seen life through different lenses. 

A 20 hr/week part time gig like yours would be ideal for the next couple years.  It's great that they think you're valuable enough to keep around.  I thought about a sabbatical, but doubt I'd go back.  :-)  I hear you about the shifted mindset - I took 6 months in 2008-2009 to be a ski bum.  We weren't financially independent at the time, so I alternated between loving the freedom and being freaked out about not having a job.  Things are different now and me leaving work will be like a zoo animal seeing a hole in the fence - gone, baby, gone.

The time I spent with my mom reinforced that I'll have no problem with an open schedule.  Our time was filled with walking the dog in the morning, running errands and meeting up with friends for lunch in the afternoon, pet sitting a friend's cat, biking and goofing off at the beach.  I can get used to that (substitute mountains for beach).  I'm an animal lover, so pet sitting could be a fun side hustle if I wanted to bring in some grocery money.

[iluvzbeach]

I’m another one who submitted my notice to resign/FIRE and my employer said they’d do anything to work with me to get me to stay. We ended up settling on working three days per week at 75% pay, full benefits & RSU vesting. I took them up on the offer and it was fantastic. I’ve subsequently FIREd for real and it happens to be even more fantastic.

FWIW, for a few years prior to submitting my notice I’d told my manager that I’d really love a part-time schedule, only to be told it wasn’t possible. When push came to shove & I submitted formal notice, their tune changed completely.

[weebs]

I’m another one who submitted my notice to resign/FIRE and my employer said they’d do anything to work with me to get me to stay. We ended up settling on working three days per week at 75% pay, full benefits & RSU vesting.

Nicely done, that was a stellar deal.  I'd love to go part time for the next couple years, but the dust hasn't completely settled on my ultimatum and I don't want to push my luck...yet.  I'll settle for backing down the pace and using all of my banked PTO.

[clarkfan1979]

I’m another one who submitted my notice to resign/FIRE and my employer said they’d do anything to work with me to get me to stay. We ended up settling on working three days per week at 75% pay, full benefits & RSU vesting.

Nicely done, that was a stellar deal.  I'd love to go part time for the next couple years, but the dust hasn't completely settled on my ultimatum and I don't want to push my luck...yet.  I'll settle for backing down the pace and using all of my banked PTO.

If everything else fails, just go splitboarding. I'm pretty sure that is the answer.

[weebs]

If everything else fails, just go splitboarding. I'm pretty sure that is the answer.

I like the cut of your jib.  :thumbs up:

[weebs]

2024 update (mostly for posterity):

Gross Salary: 320K base + bonuses

Current monthly expenses: $4000

Assets:

Primary residence (paid for, no mortgage) - $915K
Vehicles (all paid for) - 2016 Toyota 4Runner, 2021 Toyota Tacoma, 2005 Honda S2000

401k/403b - $1.45M (65/35 diversified stock/bond allocation)
Brokerage - $807K (VMFXX, VDADX, VTSAX)
Cash      - $60K
Pension   - $42k/yr, payout starting at age 65

Last year was good to us.  Our expenses stayed the same while our LNW increased from 1.8M to 2.3M. I re-ran our pension estimates and the updated estimate is ~1.7x of the original.  Given those data points, this should be my final pre-FIRE update.  Unless my current employer agrees to a part-time schedule (unlikely), I’m out late spring or early summer of next year.  DW settled into a rhythm in her job and is doing well.  As such, she wants keep working until 2028 to take advantage of the rule of 55.

I’m still working to pay for a large house project, preserve domestic harmony and learn as much as I can before pulling the plug next year.  I’m a good saver, but not a savvy investor and still have a lot to learn before retiring early.  That being said, I’m much more confident based on the research I’ve done over the last couple of years.  Case in point – I’ve nailed down likely withdrawal methods and come up reasonable estimates regarding how much we’ll pay in taxes and health insurance.   This forum has been an invaluable resource and I appreciate the collective wisdom.

I’ve gone from being the “car guy” to the “money guy” in our family, which is scary.  My canned response to finance questions is “I can’t tell you what to do, but this is what I’ve read…” followed by “…and this is how I screwed up.”  Kinda like the saying – “If you can’t be a good role model, at least serve as an example of what not to do.”

Speaking of which, there were two main takeaways from last year.  The first was “don’t try to time the market”.  Like many, I assumed we’d fall into a recession this year and stuck a good portion of my brokerage account into 1 year CDs that matured in May of this year.  That turned out to be a lousy bet and I missed out on some big gains.  Fortunately, we let our retirement funds ride and were rewarded there.  The second lesson was "just keep buying".  In addition to not messing with the AA in our retirement accounts, we continue to max out our contributions.

On the family front, Dad walked from his contracting gig and retired for good.  My stepmom retired early-ish (59) to spend time with him and live it up.  Good for them.  My mom is living solely on her SS income and is afraid to spend the considerable sum she’s saved.  Sigh…that’s a topic for another post.

[mistymoney]

woohoo!

congrats!!

but why wait?

[ScreamingHeadGuy]

Looks like your numbers all work out.  Now you can use the time until RE to get mentally and physically ready for the life change.

[weebs]

woohoo!

congrats!!

but why wait?

Thanks!  I'm hanging on for a couple reasons.  We have a big house project coming up and I need to get to the bottom of some physical issues (hopefully minor).  Recent policy changes at work coupled with hitting a milestone will give me two more weeks of PTO, which makes it easier to stick around another year.  More importantly, work is so much less stressful when you don't NEED to do it.  :-)

Looks like your numbers all work out.  Now you can use the time until RE to get mentally and physically ready for the life change.

Yep.  The next year will be 90% mental and 10% physical prep.  We're pretty active and I'd like to stay that way.